Independent panel reviewing tax structure

Imagine paying less in sales taxes – especially now during these tough economic times.

Right now, South Carolina has more than 70 sales tax exemptions. If all these exemptions were eliminated, the state could lower the sales tax rate and still collect the same amount of revenue.

Such a move would slash the state sales tax rate from 6 percent to 3.4 percent – or nearly in half. Think of the savings. I’m sure the extra money could go to other priorities.

Back in Columbia, a group is examining the state’s tax structure to ensure it works best for you and businesses. The General Assembly created the South Carolina Taxation Realignment Commission, or TRAC, to assess the effectiveness of the current tax system.

The 11-member independent panel is charged with reviewing the tax structure with an eye toward “the systemic balance of the state's revenue structure from the standpoint of adequacy, equity, and efficiency and with the goal of maintaining and enhancing the State as an optimum competitor in efforts to attract businesses and individuals to locate, live, work, and invest.”

That task is assigned to some of the state’s top business and industry leaders who are working without pay to improve the quality of life for all South Carolinians. TRAC members will present their recommendations to legislators next year. Any changes in the tax system would have to be adopted by the General Assembly.

At present, TRAC members are reviewing the sales tax exemptions. Eliminating the exemptions could result in a reduced sales tax rate. That means, however, residents would pay taxes on more items.

For instance, eliminating all sales tax exemptions would result in farmers paying taxes on fertilizers, insecticides and other chemicals. Research institutions would have to pay sales taxes on some computer equipment. Electric power companies would have to pay taxes on the coal and other fuel they purchased.

For the rest of us, the elimination of all sales taxes would result in paying taxes on our utility and water bills, gas and medicine.

That’s why TRAC members are aiming for that “systemic balance,” trying to find the right mix to ease the tax burden for residents, create a prosperous climate for business and ensure state government can continue to provide essential programs and services.

The panel will receive information from experts and examine measures in place in other states before making its recommendations to the General Assembly. The group has a difficult task ahead. But, right now, everything looks to be right on TRAC.
Contact Sen. Williams at his Columbia office located at 602 Gressette Office Building at (803) 212-6008 or by fax at (803) 212-6011. His district office is located at 137 Airport Road, Suite J, Mullins, SC 29574, the phone number is (843) 423-8237 and the fax number is (843) 431-6049 or email WILLIAMSK@scsenate.org.
Sen. Williams’ business phone is (843) 423-3904.