Uncertainty still looms over if S.C. lawmakers will conform to federal tax code 

COLUMBIA, S.C. (WIS) - South Carolina House lawmakers are moving quickly to bring the state’s tax code in line with recent federal changes, but key differences between the House and Senate are casting uncertainty over whether conformity will happen this year.

The House Ways and Means Committee on Tuesday advanced a bill that would adopt several federal tax code updates. Lawmakers say the move would allow South Carolinians to claim additional federal deductions — including new deductions on tips and overtime — that currently do not apply to state returns.

“What this would do is basically make your refund larger,” said House Ways and Means Chairman Rep. Bruce Bannister, R‑Greenville.

South Carolina has not adopted new federal tax changes for the current filing season, creating discrepancies that lawmakers say are confusing taxpayers and affecting refunds.

“We’re at a critical point in South Carolina where people are trying to make decisions on what they’re going to do with filing income taxes,” said Rep. Steven Long, R‑Spartanburg. “People are seeing discrepancies between what the federal government is doing and what the state is doing. This [bill] is going to clean us up for tax year 2025.”

Democrats on the committee also voiced support, saying the additional savings would help families struggling with rising household costs.

“I think it would have a huge impact,” said Rep. Chandra Dillard, D‑Greenville. “People are having a hard time making ends meet now. They’re looking for every way to save money.”

The timing of the push for conformity is tied to a larger effort by legislative leaders to overhaul the state income tax system — a long‑term plan that includes phasing out the income tax and replacing it with a new “South Carolina income‑adjusted deduction.” That change would eventually separate the state from the federal tax code altogether. Bannister said that the overhaul has impacted the timing of the conformity bill.

The income tax overhaul bill passed by the House last year was recently passed by the Senate with changes last week, sending it back to the House.

“We’ve been hearing from a lot of folks — do it, don’t do it, do something,” Bannister said. “Someone has to act, so we’re moving forward with the idea we will conform. I know there are some folks in the Senate who say they don’t want to.”

Bannister also warned that if the bill passes, early filers may need to amend their state returns.

Opponents argue that conforming to 2025 tax rates could lead to higher taxes next year if the broader income tax overhaul passes — a top priority for leaders in both chambers.

If approved by the full House, the bill would move to the Senate. Senate leaders have signaled they currently have no plans to take up conformity this year, leaving the proposal’s future uncertain.

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