We need your help! The Senate Finance Committee met Wednesday, September 26, 2018 to adopt legislation on tax conformity. The full Senate will convene into special session on Tuesday, October 02, 2018 to take up this important legislation.
Conformity on the state level to the changes under the new federal law (Tax Cuts and Jobs Act of 2017) is critical for your business, your clients, and you personally!
With the massive overhauls to the federal tax law, simply conforming the state’s tax code to federal tax law, as routinely done by the General Assembly, would result in South Carolinians paying millions of additional dollars in taxes next year.
H.5341, as amended by the Senate Finance Committee, aligns with the federal code, adds personal exemptions that Congress rolled into the larger standard federal deduction, and incorporates rate reductions into state law.
Without the passage of this legislation, taxpayers will no longer be able use their federal taxable income to calculate their state taxes, meaning South Carolinians would need to file two federal tax returns each year (an actual return to report federal income taxes and a dummy federal income tax return for use solely in reporting South Carolina income tax).
Aside from ensuring simplicity regarding income tax returns, the legislation protects capping business interest expense at 30% of the adjusted taxable income and more importantly, protects the provision that allows certain pass-throughs to businesses to deduct as much as 20% of their business income.
Keeping our tax code simplified will benefit the businesses and the consumers of South Carolina by minimizing unnecessary confusion and expenses going forward into the new tax year.
If the General Assembly does not act now and conform before the year’s end, South Carolina’s tax system will go from one of the simplest to one of the most complex in the United States.
Please ACT NOW to ensure passage of this important legislation!