South Carolina Begins Comprehensive Tax Reform Review Ahead of 2027 Session

The South Carolina Senate has begun a comprehensive review of the state’s tax structure, signaling that tax reform could become a major issue during the 2027 legislative session. The Senate Finance Committee’s Common Sense Tax Reform Special Subcommittee held its first meeting September 10, with Chairman Sean Bennett emphasizing that the current process is focused on fact-finding and broader tax modernization rather than targeted exemptions or incremental changes.

Discussions centered on the interconnected nature of South Carolina’s income, sales and property tax systems, particularly as population growth, an aging workforce and changing consumer spending patterns place new pressures on state revenues. Senators are also expected to examine Act 388, the 2006 law that significantly reshaped property and school funding.

For the business community, property taxes could become one of the most consequential areas of discussion. Businesses currently generate more than 75% of South Carolina’s property-tax revenue, compared with approximately 54% nationally. The existing system provides substantial protections for owner-occupied residences while placing a greater share of the local tax burden on businesses, rental properties and other non-owner-occupied property.

Potential reform discussions could include the 4%/6% property assessment disparity, business personal property taxes, school operating taxes, sales-tax exemptions, corporate credits and broader sales-tax base expansion.

No legislation has been proposed. However, the subcommittee plans to continue meeting throughout the fall and gathering public input. For CRMCA members, the review will be important to monitor as lawmakers consider how to modernize South Carolina’s tax structure while balancing competitiveness, revenue needs and taxpayer impacts.