Things at the State House have gotten off to a fast and productive start. In just the first two weeks of session, multiple bills with significant implications for the business community have begun moving through committees in both the House and Senate.

Below is a snapshot of the key legislation currently on the move:

• H.4216, an Income Tax Reduction bill passed the Senate Finance Committee. The bill has not changed since the House passed it last session. The proposal would create a two-bracket system, 1.99% on the first $30,000 of income and 5.39% on income above that. If the state continues its trend of 5% annual revenue growth, the top rate would drop by 0.2% each year. The revised plan decouples from the federal tax system and eases the tax burden for many, with 42% of residents expected to see lower taxes and about a third seeing no change. The ultimate goal is to reduce the states income tax to zero over time with triggers to get there.
  
• The Insurance Ad Hoc Committee bill has begun advancing through the House Labor Commerce and Industry committee. The bill aims to lower insurance rates by reducing the frequency and severity of claims and increasing competition in the insurance marketplace. The bill targets insurance fraud, strengthens enforcement coordination, expands mitigation incentives, modernizes the SC Safe Home Mitigation Grant Program and aligns South Carolina with proven models used in other states.
  
• The House SCDOT Ad Hoc Committee is finalizing recommendations ahead of introducing legislation in Ways and Means. The legislation, as drafted, includes a comprehensive modernization of South Carolina’s transportation governance and project delivery framework. It streamlines project planning and procurement, expands public-private partnership tools, accelerates project approvals and updates user fees (including EV fees) to support the State Highway Fund.
  
• The Senate has begun hearing testimony on SCDOT modernization.
  
• A business personal property tax bill is expected to be filed in the House by the end of the week and referred to Ways and Means. This legislation would exempt the first $10,000 of net depreciated business personal property from taxation for small businesses, defined as employers with 100 or fewer employees or $10 million or less in annual revenue, eliminating tax liability and filing requirements for businesses below the threshold. Businesses with larger asset bases would still benefit from excluding the first $10,000 from taxation, reducing compliance burdens and improving South Carolina’s competitiveness with neighboring states.
  
• A Senate subcommittee has begun hearing testimony on S.688, legislation aimed at ensuring the solvency of the unemployment trust fund. The bill alters the state unemployment insurance system by adjusting the look back period for calculating the benefit ratio, establishes a solvency target for the unemployment trust fund and adjusts tax rates for employers with delinquent tax reports or outstanding tax executions.

Looking Ahead

The Senate is expected to devote the next couple of weeks to DUI legislation, followed by consideration of charter school accountability and regulatory reform. The business community should also anticipate substantive discussions around tax reform.

“Wicked Wednesdays” will return in the House, with leadership aiming to take up two contested bills each week, likely leading to late nights. Meanwhile, House Ways and Means will continue working through budget subcommittees, with the goal of a full committee budget meeting on February 17 and House floor debate the week of March 9. Community investments, more commonly known as earmarks, are also expected to return.

We will continue to advocate for the business community at the Statehouse. If you have any questions throughout the legislative session, please reach out to bvincett@charlestonchamber.org.