Senator Paul Campbell

The General Assembly in January will decide how to handle the recommendations of a panel of business and tax experts. Lawmakers and the governor appointed this commission to give their expert opinion on how to fix the state’s tax system. One of the recommendations to lower the state sales tax by one cent, and to raise the gas tax by five cents. Berkeley Senator Paul Campbell has been keeping an eye on the work of the SC Tax Realignment Commission (TRAC) work to change the fuel taxes for the state.

The TRAC offers two options: a flat cent tax or a “floating” tax rate that changes with the price of gas. Campbell says it all would go back to improving road conditions:

All the money goes to the (SC) Department of Transportation to repair our roads and upgrade our roads. So, it’s a trade-off a little bit there. People will save money because they won’t be stuck in traffic jams, they won’t be tearing their cars up on highways.

Campbell, a Senate Republican, does have mixed feelings about who pays the tax. He says, “I hate to put it on gasoline, because it hits everybody, but it also hits our visitors that come through our state. So, it hits the trucks that gives us the cost of our goods.”Campbell says he expects a lot of tourists that drive through South Carolina will stop to get gas, and the extra tax, means more money to the state. He also suggests: 

We definitely need to fix our roads and we need to work on our Interstates to add that extra lane to try to take some of the load off of our people. We spend a lot of money on gasoline for our vehicles just sitting stopped, for no reason, when you have all that congestion. We would save enough money to probably pay the gasoline tax if we could keep moving.

The South Carolina Tax Realignment Commission was appointed by state government to study and make suggestions to improve a tax code that has been described as antiquated.

A group appointed to help fix the way the state taxes it citizens is getting closer to the end of its work. The South Carolina Tax Realignment Commission was appointed by state government to study and make suggestions to improve a tax code that has been described as antiquated.

Charles Way, a former South Carolina Secretary of Commerce and now a major resort developer, says he has been pleased with what TRAC has done so far. “I think we have tried to be very, very open and transparent and I think that we have been,” says Way.

At the meeting, Way told commissioners that he thought they would have heard from more of the industries to be affected by tax changes. He mentioned car dealers in particular as not having weighed in during this study committee process.

TRAC Commissioner Don Weaver, a realtor, says they did not hear from the service sector, who under their proposal, would be subject to taxes for the first time. Review list of services to be taxed

Weaver says, “I was a little disappointed that they (the subcommittee) had not heard testimony and that we, the whole committee had not heard from the service industries.”  He says if service providers mobilize a lobbying effort, it will most likely focus on legislators when the issue comes up in early 2011.

Weaver was the lone “no” vote on the sales tax plan, because of its taxes on residential utilities. “We are already taxing two necessities, groceries and gasoline and to add two more, water and electricity. That was my main concern,” he says.

The commission Thursday moved forward on approving a sales tax plan lowering the overall rate to five percent and eliminating sales tax exemptions on dozens of industries. The plan also puts back into place a grocery tax at 2.95 percent.

The commission passed two recommended options for a fuel tax: a general five cent increase or one that adjusts with the cost of fuel.  Both options will be capped, says Commissioner Kenneth Cosgrove, so that South Carolina’s rate would always be lower than North Carolina’s.  “So that no matter what the price of fuel does, we will not allow the tax to go over 29.9 cents and the key there is that it keep us underneath the floor of North Carolina’s tax,” Cosgrove explains.

The committee members also suggested, but did not formally recommend, that lawmakers look at ways to tax alternative fuel. Federal and state lawmakers, as well as business interests,  have been more outspoken in the past few weeks about the need for road repairs throughout South Carolina. The fuel tax would apply to those fixes.

TRAC next takes up individual income taxes and property taxes.

The state legislature will have consider the recommendations and decide how to act on them–when the new session begins in January. Even members of the commission say that major reform is not likely.

“They may do 20 percent of what we recommend,” says Weaver, “but that’s a start.”

Wilson applies graphics to his tour bus as part of “Joe Means Jobs” training.

Congressman Joe Wilson is ubiquitous as he campaigns daily around the state. He’s made arrangements to visit more than 30 businesses where he may be waiting tables or perhaps flipping pancakes.  You could possibly find him working the cash register at a video store.

It’s what Wilson does this time every year: a bus tour of the entire district. He’s taking the opportunity now to make his point about employment by shadowing employees at different jobs at local companies:

I was happy to be at a Tiger Express Quick Shop, helping behind the counter. I’ve helped lay bricks at the State Farmer’s Market. And each of these forms of employment are jobs. These are good jobs. These are very worthwhile and fulfilling jobs. And I want people to know that I appreciate what they do, but I want more jobs, and whatever I can do to create a more positive environment to create jobs.

Congressman Wilson believes that cutting taxes for individuals and businesses is the first step in helping put more people back to work.

…by cutting taxes across the board, five percent. Small businesses would right away, have the ability to hire new personnel. Then consumers would be able to have liquidity to buy product, which is the definition of how you grow a small business. They have to have sales. And so this is the way we should be growing the economy. It should be bi-partisan. This is what John Kennedy did in 1961, what Ronald Reagan did in 1981.

Wilson is running for re-election in the 2nd Congressional District against opponent Democratic candidate Rob Miller. Miller began running his ads on Wednesday, becoming the first candidate to begin advertising in the general election.

Social Security officially turns 75 Saturday August 14.

For 75 years, Social Security has provided a guaranteed inflation-protected retirement benefit Americans could count on. It also provides much needed assistance to spouses and children of deceased workers, and persons with disabilities. AARP South Carolina Senior Director Jane Wiley says while Social Security will remain solvent for a several more years some tweaking of the system has to be done before the program reaches its 100th anniversary.

Wiley says one of the popular tweaks being discussed is to raise the retirement age at which a persons can receive full Social Security benefits. If you were born after 1960, your retirement age is 67. Wiley surmises that bumping the retirement age to 70 would not go over well for people in their fifties who are planning to retire in the next few years. She says the option for some to take early retirement at 62 should be retained.

Wiley says an idea that is gaining steam is the option of raising the cap on wages that Social Security taxes are subject to.

Wiley says presently in South Carolina nearly a million people are receiving Social Security benefits. She points out that people should remember as they examine their respective financial situations, that Social Security was never designed to be a person’s sole or even main source of retirement income.  She says the key to securing your financial future as you move through the years toward retirement is developing a plan and sticking to it.

AUDIO: Jane Wiley-AARP South Carolina Dir. on future importance and role of Social Security 5:15

Republican Senator Jim DeMint says the federal tax cuts put in place under the Bush administration will expire in January and that’s making businesses large and small very uneasy. He says they’re not likely to make investments back into their businesses because they don’t feel supported by the Obama administration.

DeMint, a former small businessman himself, appeared on Columbia talk radio WVOC on the Keven Cohen Show.

Businesses don’t know what their taxes will be next year, their health care costs, their energy costs, they don’t know if they’ll be able to get credit. They’re just waiting to see if there’s a change in November that might put some checks and balances on what the Obama administration can do.

DeMint says Republicans don’t want to lower taxes; they just want to keep them where they are.

The Bush tax cuts are our current tax rates. We’re trying to stop the largest tax increase in history. Some folks are saying we’re trying to cut taxes. If you don’t do anything in the next four months, everyone’s taxes are going to go up.

DeMint says a lot of South Carolina residents will feel increased economic pressure next year if the tax cuts are allowed to expire.

A couple with a combined income of $80,000 is likely to pay $2,200 more in taxes next year. It’s hard to plan with that over your head. And dividends will go from 15 percent to 40 percent.

About the federal stimulus funds, DeMint says the American economy isn’t doing any better right now because you can’t stimulate an economy by growing government and debt.

Concerning the Medicaid bill that will save 2,600 teacher jobs in South Carolina–the measure that the president signed Tuesday, which DeMint voted against last week–DeMint says it’s just a bailout that requires borrowing more money. He says the country will just be in more debt next year.

The annual back-to-school sales tax holiday is underway in South Carolina Friday through Sunday.

South Carolina Department of Revenue spokesperson Adrienne Fairwell says the 11th annual tax-free weekend will give a break from the state’s sales tax on purchases of clothes, shoes, school supplies, book bags, computers and printers. “The list hasn’t changed in the last four or five years,” says Fairwell.

Fairwell says you can check out www.sctax.org for a complete listing of items included and those that are not. Once on the home page, scroll down to “What’s new.”

The state sales tax in South Carolina is 6 percent, but local taxes can push it to 8 percent in some locations.

Some neighboring states, including North Carolina and Tennessee will hold their tax-free weekends at the same time as South Carolina.  Georgia officials decided against the event this year due to recession pressure on state government.

Nearly half of all states are not measuring up in the fight against cancer. The report, developed by the American cancer Society Action Network, found that 23 states met the benchmark on only one or none of the six areas examined in the report.

South Carolina was one of seven states that did not reach any of the benchmarks in fighting cancer, which includes breast and cervical cancer early detection program funding, access to care for the uninsured, colorectal screening coverage laws, smoke-free laws, tobacco prevention program funding, and tobacco taxes. Suzanne Hyman, American Cancer Society Grassroots Manager for South Carolina says some progress was made with the state’s cigarette tax increase from the lowest in the nation seven cents to 42nd at 57 cents.

The tax increase will raise a projected $135 million annually to be spent on state-run health care programs. Supporters also say the tax increase will discourage young people from taking up the habit. Hyman points out that one of the benefits in the increase of the cigarette tax is the $5 million that will be used for tobacco prevention programs.

Hyman says efforts to get a statewide smoke-free law has fallen short, but grassroots efforts at the local level is steadily bearing fruit. Hyman says while progress has been made in the last few years in securing state funding for cancer prevention initiatives, with the budget slashing by the General Assembly this past session, the state has taken a step back. Hyman says the American Cancer Society in South Carolina will be communicating with state legislators during the next legislative session about the importance of increasing state funding for cancer prevention programs.

Hyman says in the area of health disparities, the American Cancer Society will continue to initiate partnerships with minority group organizations to develop more effective programs that emphasize lifestyle changes and early detection.

AUDIO: Suzanne Hyman- SC American Cancer Society 2:18

More than 88 percent of South Carolina small businesses with fewer than 25 employees will be eligible this year for tax credits to help pay the cost of employee health coverage, according to a new study.

The consumer health organization Families USA and the small business advocacy group called the  Small Business Majority say the tax credit program, a key element of the Patient Protection and Affordable Care Act, targets small employers with up to 25 workers.

Small Business Majority founder and CEO John Arnsmeyer says in South Carolina, this means 53,200 small businesses will qualify.  They’ll simply pay less in taxes if they help their employees with their insurance.  Arnsmeyer says employees benefit in the end.

AUDIO: Arnsmeyer on tax credits (1:57)

The report notes that 15,900 South Carolina small businesses will qualify for the maximum tax credit of 35 percent. Those are businesses that employ 10 or fewer workers who earn an average wage of less than $25,000 and traditionally have the most difficult time affording insurance.

Nationally, more than four million small businesses—83.7 percent—are eligible in 2010 for the credit.

Richland County House Member Anton Gunn, a Democrat and small business advocate, says, “Finally small businesses are getting some help so they can spend less money on health care and invest more in growing their businesses.” He says the Congressional Budget Office estimates the tax credit will save small businesses $40 billion by 2019.

To qualify, a small business must have less than the equivalent of 25 full time workers, pay average annual wages below $50,000, and cover at least half of the cost of health care coverage for their workers.

Starting in 2014, small employers will be able to purchase quality coverage with strong consumer protections through state-based health coverage marketplaces called “exchanges.” Small employers will be eligible for tax credits up to 50 percent, or 35 percent for nonprofits, to cover their workers with policies obtained through the state exchanges.

Also in 2014, insurers will be prohibited from charging small employers higher premiums based on their workers’ pre-existing conditions.

Ron Pollack, Executive Director of Families USA, says in 2008, employers with fewer than 10 workers had to pay on average nearly $350 more for each employee’s health insurance than firms with 50 or more workers. He says it’s no surprise that less than half of those smallest businesses offered coverage to their employees.

An appointed commission to review the state’s tax structure took its first vote today.

Burnie Maybank, former SC Department of Revenue director, chairs the commission

Realtor Don Weaver serves on the South Carolina Tax Realignment Commission, which was appointed by the legislature to review and make recommendations about the way the state taxes its citizens. Wednesday, the committee of  people well-versed in taxes and finances approved what amounts to a first reading to a report on sales and usage taxes. New taxes might be seen on groceries, utilities and drugs.

This was our first vote to accept a subcommittee report, which is progress because we’ve really just heard testimony up until this point. And I think you heard from several of the TRAC members some concerns that this be revenue-neutral.

Revenue neutral, in this application, means that more items may be taxed, but at a lower rate–which spreads out the tax base. Why is that better? Commission Chairman Burnie Maybank says,

In terms of the individual consumer, I’m sure some will pay more and some will pay less. In terms of the overall bill, the bill is designed to be revenue-neutral. SO as it repeals exemptions, it lowers the sales tax rate by a comparable amount.

Under the TRAC draft proposal, the average consumer will have groceries taxed, pay more sales tax on cars, and pay more on Internet product downloads. But Maybank says that there are other items, like appliances or electronics, that will have a lower tax rate. He says that the new tax structure would more truly reflect consumer spending habits.

But, he also admits that with an improving economy, the motivation and impetus pushing the state tax overall may be diminishing. “There’s probably a little more momentum behind this than most, though,” says Maybank.

Also at today’s meeting, local governments and education lobbyists once again asked that legislators look at the controverisal Act 388, which cut proterty tax and added sales tax statewide, but the TRAC commission is not allowed to consider revamping that law. A national education association economist told the TRAC commission that relying on sales taxes to pay the bills permanently damages the economy of rural communities.

Review latest sales and usage tax draft from SC TRAC

The South Carolina Department of Transportation would welcome more revenue in order to maintain the state’s roads and bridges.  However SCDOT Executive Director Buck Limehouse says given the condition of the state budget during this recession he doesn’t think there is much appetite in the state legislature for an increase in the gasoline tax, which funds road construction and maintenance.  

The state gasoline tax is currently 16 cents a gallon. The Tax Realignment Commission is set to recommend this fall a state gas tax increase of 10 cents a gallon that would be phased in over three years. Limehouse says the arguments for an increase are compelling, the most important being that many of the roads and bridges in the state are in dire need of repair.

Limehouse says he has seen indications that people are concerned about infrastructure improvements and are willing to help foot the bill for these improvements if the money is spent wisely. Limehouse says South Carolina is a donor state which means that the state pays more into the federal Highway Trust Fund than it receives. But he says the state has been successful in arguing for a fairer share of money from the trust fund, because the system is not as equitable as it should be.

AUDIO: Limehouse on possible gasoline tax increase 4:54

Those planning some back-to-school shopping may want to take note. South Carolina’s 11th annual back-to-school “Sales Tax Holiday” weekend has been scheduled between midnight Friday, August 6 and Sunday August 8. The state’s sales tax will be lifted on purchases of clothes, shoes, school supplies, book bags, as well computers and printers.

Department of Revenue Public Relations Director Adrienne Fairwell says the holiday will drop the six percent state sales tax as well as applicable local taxes.  South Carolina shoppers typically save about $2.8 million in sales tax during the event.

Fairwell says it’s usually the third busiest shopping period of the year in the Palmetto State, next to the weekend after Thanksgiving and the weekend before Christmas.

South Carolina adopted the sales tax holiday in 2000 and in following years, Georgia, North Carolina and Tennessee also implemented similar events.  This year, North Carolina and Tennessee will hold their tax-free weekends at the same time as South Carolina, but Georgia will not have one at all this year.

Fairwell says the list of tax-free items is the same as before.

AUDIO: Fairwell on tax holiday (:54)

Some members of the Lifetime series “Army Wives,” filmed in Charleston, rallied at a South Carolina Film Alliance meeting over the weekend and pushed for more incentives in the state’s film industry. Wendy Davis plays Lt. Colonel Joan Burton on “Army Wives” and says she doesn’t think people realize how much the film industry means for the state.

“The tax incentives are worth it. Look at how many people come here because they actually saw South Carolina on a television show or a movie, and they said, ‘Hey, wow, look at how beautiful that place is,’” says Davis.

That’s one reason why Davis, along with other cast members, from the series attended Sunday’s South Carolina Film Alliance meeting calling for lawmakers to step up. Davis says the cast should not have to ask for more incentives every year, considering how much the film and television industry does for the state’s economy. The meeting was to encourage other people in the state to push for more incentives, creating more stability for film to stay in South Carolina.

“There are other states that offer fabulous tax incentives,” says Davis.

The General Assembly did override the governor’s veto last month, keeping these tax incentives in the state.