South Carolina Weighs Potential Tax Code Reforms

Lawmakers are reviewing state property and sales tax policies that may eventually shift the tax burden for local households.

Updated on Oct. 21, 2026 in Taxes

South Carolina Weighs Potential Tax Code Reforms

Live Poll

Should states broaden their tax bases and eliminate exemptions to lower overall tax rates?

South Carolina lawmakers are weighing potential overhauls to the state tax code, including proposals to broaden the sales tax base and adjust property tax caps. The review follows ongoing concerns over the impacts of the 2006 property tax reform law.

Why it matters

Changes under consideration could eventually alter how homeowners and shoppers across South Carolina pay taxes. Lawmakers are investigating if current exemptions and caps, established nearly two decades ago, remain the most efficient way to manage state revenue and household tax burdens.

South Carolina currently manages 136 sales tax exemptions, with just five accounting for 70% of lost state revenue. The state sales tax rate sits at 6%, an increase from the 5% rate in place before 2006.

The players

Common Sense Tax Reform Special Subcommittee

A state Senate body evaluating potential revisions to South Carolina tax law.

The details

The subcommittee is exploring a transition from current property assessment caps, which limit valuation increases to 15% over five years, to soft levy limits linked to inflation and population growth. Experts also suggested that broadening the sales tax base—by reducing the current 136 exemptions—could potentially allow for lower overall sales tax rates. These discussions are aimed at addressing structural challenges introduced by Act 388 of 2006.

2006: Act 388 was enacted.
September 10, 2026: The subcommittee held its initial meeting.
October 7, 2026: The subcommittee hosted a second hearing with tax experts.
Early November 2026: The subcommittee is scheduled to hear public testimony.

Money Landscape

The current deliberations sit at the center of a long-term effort to address the structural effects of Act 388 of 2006. Lawmakers are attempting to balance state spending growth against the tax limits that have governed South Carolina finances for nearly 20 years.

Residents should track upcoming hearings as any shifts in sales tax exemptions or property assessment limits could directly impact their annual household tax obligations. You may wish to consult a tax professional to understand how potential changes in your county could affect your future property tax planning.

The takeaway

Legislators are signaling a possible shift in state tax strategy that could widen the base for sales tax while altering property valuation rules. Keep an eye on public testimony dates in November to see how these potential changes might affect your household budget.