August 21, 2014

Legislators vote to eliminate income tax on military retirees

State Rep. Murrell Smith (R-Sumter)

State Rep. Murrell Smith (R-Sumter)

Retired active duty military members could eventually no longer pay income tax on their retirement pay under a bill that cleared the South Carolina House of Representatives on Thursday.

The “Giving Back to Our Veterans Act” was approved in a unanimous vote that will send it to the state Senate on Friday.

“We’re the last state in the Southeast that does not do this, so it’s a priority with the Department of Commerce,” the bill’s sponsor State Rep. Murrell Smith, R-Sumter, said on the House floor shortly before the vote.

The legislation would phase out South Carolina’s income tax on active-duty retirement pay over the next three years. If approved, a retiree or their surviving spouse would be allowed to deduct 33 percent of military retirement benefits on their 2014 income and 67 percent on their 2015 income before the tax is eliminated entirely in 2016.

State lawmakers have passed several laws and policies in recent years aimed at making the state more “military-friendly.” Officials at the Statehouse, state Department of Commerce, and even the Governor’s Mansion have made no secret that the effort is aimed at better positioning South Carolina in the Pentagon’s eyes should base closures become a possibility again.

The South Carolina Military Base Task Force has outlined a list of priorities to make the state military-friendly, including better military-to-civilian job placement, easing some of the restrictions and bureaucracy for families that frequently move, and helping National Guard members keep their jobs once they return from deployment.

Keeping with that theme on Thursday, the South Carolina Department of Motor Vehicles announced it had eased requirements for former military personnel who are seeking a license to drive commercial trucks. DMV director Kevin Shwedo said that, beginning next week, military personnel who had operated certain heavy vehicles while in uniform would be able to exempt a required skills test for a commercial driver’s license (CDL). They would still have to pass a knowledge test and other federal regulations, he said.

“Having served in the military, I know that service members go through rigorous training to learn how to operate the military equivalent of commercial vehicles,” Shwedo, a retired Colonel, said in a statement. “This change will make it easier for soldiers leaving the service to qualify and find commercial driver positions in the public sector.”