COLUMBIA, S.C. (AP) - A law that takes effect July 1 will eventually provide more than $600 million annually toward fixing South Carolina’s crumbling roadways and cut taxes by $105 million. The House and Senate easily overrode Gov. Henry McMaster’s veto on Wednesday. Here’s a look at the law:
A breakdown of the money to be raised:
-The state’s per-gallon gas tax will increase by 12 cents over six years, to 28.75 cents in 2022. The first 2-cent increment will take effect July 1.
-The sales tax cap on vehicles will rise from $300 to $500, starting July 1. That means anyone who buys a vehicle worth at least $10,000 will pay $500.
-People moving to South Carolina will pay $250 to newly register their vehicle bought in another state.
-Drivers’ biennial vehicle registration fee will increase by $16. Currently, the fee is $20 to $30.
-Commercial truckers licensed with out-of-state fleets will pay a fee based on the miles they drive annually passing through South Carolina. Truckers already are federally mandated to track miles traveled in every state for other fees and taxes.
-Drivers of hybrids and electric vehicles will pay new fees of $60 and $120, respectively, every other year.
How the rebate will work:
-South Carolina drivers can recoup extra money paid at the pump. The cumulative cap will rise from $40 million the first year to $114 million in year six, then sunset. Technically, drivers will be reimbursed for maintaining their vehicles, up to 100 percent of their added gas taxes. The rebate could be claimed by itemizing gas and service costs on income tax returns, starting next year.
For example, drivers who put 300 gallons of gas in their vehicle between July 1 and Dec. 31 could get a $6 refund next year to offset the cost of oil changes, new tires or other maintenance. Taxpayers could claim two vehicles per return and would be asked to keep track of their gas fill-ups and service receipts.
A breakdown of the proposed tax cuts:
-Low-wage workers can claim a new state income tax credit equal to 125 percent of the federal credit. They are expected to save $43 million once the credit is fully phased in over six years.
-Property taxes paid by manufacturers will decline from 10.5 percent to 9 percent over six years, cutting those taxes by $36 million in 2023.
-An income tax credit for married couples filing jointly will rise from the current cap of $210 to $350 over six years. To qualify, both spouses must work in South Carolina. In 2015, nearly 370,000 taxpayers saved $50 million through current credits. The new law is expected to provide an additional $19 million in tax relief by 2023.
-Tax credits for college tuition, whether for a two- or four-year school, will rise to a $1,500 cap. It has been $850 for four-year schools and $350 for two-year schools. The expansion is expected to save tax filers an additional $7 million.
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