Three Things to Know: May 9th

This week's information compiled by your SC Chamber team includes: 
That’s a Wrap! 2025 Legislative Session Ends, SC Chamber Joins Letter to Congress on Preserving the B-SALT Deduction, Save the Dates for SC Chamber’s New Summer Webinar Series

 1. That’s a Wrap! 2025 Legislative Session Ends

At 5:00 p.m. on Thursday, the South Carolina General Assembly adjourned sine die, which means that, per this year’s sine die resolution, lawmakers can only return to Columbia to finalize the state’s FY2025-26 budget or to deal with any gubernatorial vetoes.

As is typical, this meant that this final week of session was hectic and full of interesting procedural motions as lawmakers raced to get their priorities across the finish line including a tort reform/liquor liability compromise (more below), a comprehensive energy bill (more below), and the House’s amended version of the state’s FY2025-26 budget. All told, 45 bills from this year's session have already been signed into law by Governor McMaster, with another 36 awaiting his signature. 

Overall, it was a good year for the business community with two of our top issues (tort reform and increasing energy generation) making it across the finish line in some capacity and another (income tax reform) being set up to be the top issue discussed in 2026. Check out SC Chamber President and CEO Mike Brenan’s statements on the passage of the tort reform compromise, the House’s passage of income tax reform, and the passage of the energy bill, here, here, and here.

Many business-friendly initiatives will also be included in the state’s FY2025-26 budget, such as continued tax reductions, infrastructure funding, teacher pay increases, and workforce scholarships. Notably, for the third year in a row, no anti-business bills were signed into law.

Thank you to all our members who engaged with lawmakers during this session - your voice made a difference. While a full recap of this year’s session is forthcoming, take a look at the status of a number of important bills the SC Chamber team tracked this year.

Pro-business bills that have passed the General Assembly and will be signed into law this year:

• Tort Reform/Liquor Liability (H.3430) – This compromise bill includes modest improvements to South Carolina’s joint and several liability laws by allowing juries to consider all parties involved in an accident when allocating fault, with some exceptions, and by eliminating the “gross negligence” and alcohol exceptions to modified joint and several liability (fifty percent threshold). The bill also provides relief to a hospitality industry struggling with increased liquor liability insurance rates by expanding insurance options, offering incentives to lower premiums for bars and restaurants that implement key safety measures, requiring server training, and establishing a “knowingly” standard that must be met for a bar or restaurant to be held civilly liable in alcohol related cases. A comprehensive summary of the compromise bill can be found here.
• South Carolina Energy Security Act (H.3309) – This bill aims to address the current and future energy needs of South Carolina by increasing generation capacity through an “all of the above” approach and through common sense regulatory and permitting reforms to maintain the state’s unprecedented economic growth.
• Credit for Prior Work Experience (S.78) – This bill aims to combat the state’s shortage of teachers by encouraging more nontraditional, mid-career professionals to join the teaching profession by allowing them to receive credit for prior work experience.
• Noncertified Teacher Pilot Program(S.79) – This bill would direct the S.C. Department of Education to establish a five-year pilot program for qualified schools to hire noncertified teachers in a ratio of up to 10% of its staff. Participation in the program by schools is optional.

Notable bills that just passed one legislative body:

• Income Tax Reform (H.4216) – The House has passed this historic income tax reform bill that aims to make South Carolina even more competitive in recruiting jobs and investment. The bill, which now sits in the Senate Finance Committee:
• Delivers $400 million in income tax relief.
• Immediately reduces the top income tax rate from 6.2% to 5.39% for filers with more than $30,000 in taxable income.
• Filers with taxable income of less than $30,000 would pay a rate of 1.99%.
• Annually cuts the top rate by $200 million until the rate ultimately hits 1.99%, upon which there will be just one tax rate for all filers, provided that state revenues grow each year by 5%. With continued revenue growth, the rate would eventually phase out to 0%.
• Shifts how the state calculates an individual's taxable income from “federal taxable income” to adjusted gross income (AGI).
• Small Business Regulatory Freedom Act (H.3021) – The House has passed a bill that aims to cut red tape for South Carolina’s job creators through numerous changes to the regulatory process including by requiring that for every proposed regulation a state agency proposes two to cut, prohibiting courts from showing deference to state agencies in legal disputes, a regulation shot clock, and more. The bill sits in the Senate Judiciary Committee.
• Manufacturing Property Tax Exemption Cap Increase (S.439) – The Senate has passed a bill that would increase the manufacturing property tax exemption cap enacted in the Comprehensive Tax Cut Act of 2022 from $170 million to $300 million. The Comprehensive Tax Cut Act of 2022 effectively reduced the manufacturing property tax rate from 9% to 6%, provided that the revenue loss to counties does not exceed $170 million. The cap increase is needed to ensure small to mid-size manufacturers do not experience a property tax hike in the coming years. A similar proviso may be included in the state’s FY2025-26 budget. The bill now sits in the House Ways and Means Committee.
• Angel Investor Tax Credit (H.4134) – The House has passed a bill to extend the Angel Investor Tax Credit for an additional ten years, until 2035. This credit allows for a 35% non-refundable tax credit to private individuals who invest their own capital in early-stage, high-growth companies. The bill now sits in the Senate Finance Committee.
• Ending Illegal Discrimination and Restoring Merit-Based Opportunity Act (H.3927) – The House has passed a bill that aims to restrict diversity, equity, and inclusion (DEI) programs and initiatives within state government, its political subdivisions, institutions of higher education, and public schools. DEI is defined as any preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, or requirements implemented by a public entity that constitute illegal discrimination on the basis of race, color, religion, sex, or national origin. The bill requires private sector entities that contract with or receive a grant from the state or its political subdivisions to certify that they do not operate any unlawful programs or have hiring practices that violate state or federal anti-discrimination laws. The bill sits in the Senate Judiciary Committee.

Notable bills that did not pass either legislative body:

• Business Personal Property Tax Relief (H.3358) – This bill, introduced by House Speaker Murrell Smith (R-Sumter), Assistant House Majority Leader Brandon Newton (R-Lancaster), Ways and Means Committee Chairman Bruce Bannister (R-Greenville), and others, would exempt the first $10,000 of a business’s personal property (BPP) from taxation and exempt small businesses with less than $10,000 in BPP from burdensome reporting requirements.
• Childcare Tax Credit Modernization (S.47) – This bill, introduced by Sen. Tom Davis (R-Beaufort), seeks to modernize the existing childcare tax credit available to South Carolina employers who offer on-site childcare or provide childcare benefits to their employees by increasing the credits and allowing the credits to be claimed against an employer’s withholding taxes. The bill also creates a new refundable income tax credit for individuals who are employed full-time as a childcare director or a worker in a childcare facility.

• Maximum Unemployment Benefits (H.3477) – This bill, introduced by Rep. Micah Caskey (R-Lexington), Ways and Means Committee Chairman Bruce Bannister (R-Greenville), House Speaker Murrell Smith (R-Sumter), and others, would accelerate the re-employment process of recently unemployed individuals across the state by indexing the duration of unemployment benefits to the unemployment rate so that in times of low unemployment, the maximum duration of benefits will be 12 weeks and in times of high unemployment, the maximum duration will be 20 weeks, ensuring that during times of low unemployment, individuals are not incentivized to stay on the sidelines and collect unemployment benefits when there are high-paying jobs going unfilled.
• NPDES Signs (H.4102) – This bill would require all entities who possess a National Pollutant Discharge Elimination System (NPDES) permit to discharge effluent into state waterways, to post a conspicuous and legible sign at the discharge outlet. Conservation groups have made this priority legislation.
• Medical Informed Consent Act (S.54) – This bill would prohibit all employers from mandating the receipt of “novel vaccines”, “gene therapy”, or “indemnified products” as a condition of employment, entry into buildings and grounds, attendance, participation, or the purchase or receipt of any products and services offered for employees, contractors, students, and patrons. Employers who mandate the receipt of “novel vaccines”, “gene therapy”, or “indemnified products” would be subject to criminal and civil penalties. Additionally, the bill amends various sections of the state code relating to emergency health powers to limit the powers of the Department of Public Health (DPH) in future public health crises. The bill sits on the Senate calendar.

2. SC Chamber Joins Letter to Congress on Preserving the B-SALT Deduction

This week, the SC Chamber joined a coalition of nearly 350 other national business associations and state and local chambers of commerce from across the United States in a letter to Congress asking them not to cap the Business State and Local Tax (B-SALT) deduction in any tax reform legislation Congress passes this year. The deduction was created in the Tax Cuts and Jobs Act (TCJA) passed in 2017, and the coalition asks Congress to make the deduction permanent.

The letter, led by the U.S. Chamber of Commerce, says, “We are concerned that some are now suggesting a policy that would weaken these pro-growth reforms by capping or otherwise limiting the deduction for state and local business taxes. Doing so would be a mistake. State and local business taxes are not optional; they are ordinary and necessary expenses incurred in carrying on a trade or business. As such, limiting the B-SALT deduction would lead to a massive tax increase on businesses of all sizes.”

According to the Tax Foundation, eliminating the deduction would:

• Raise the tax burden on pass-through entities such as S corporations and partnerships by $226 billion over the next ten years.
• Increase corporate taxes by $223 billion and corporate property taxes by $209 billion over the next ten years.

Altogether, it is estimated that eliminating the B-SALT deduction would lead to a tax increase of $600 billion on businesses of all sizes. The letter closes by saying, “This would cause lasting harm to the U.S. economy by depriving American businesses of the resources they need to invest, hire, and grow.

More information on how limiting the B-SALT deduction could lead to a significant tax increase can be found here.

3. Save the Dates for SC Chamber’s New Summer Webinar Series

The South Carolina Chamber of Commerce is excited to announce the launch of its Pilot Summer Webinar Series, a new initiative designed to deliver valuable content to both members and non-members throughout the summer months. This three-part series will highlight key topics impacting businesses across the state, featuring expert insights, practical guidance, and an opportunity for interactive dialogue.