Eliminating some Sales Tax Exemptions
H.4227 would eliminate a number of sales tax exemptions and would direct the resultant revenue to the state’s general fund. Some of the items that would no longer be exempt from sales tax include: railroad cars, vessels and barges of more than 50 tons burden, petroleum asphalt products purchased in South Carolina but used out of state, seventy percent of the gross proceeds of the rental or lease of portable toilets, amusement park rides, and energy efficient products purchased for noncommercial home or personal use with a sales price of two thousand five hundred dollars per product or less.
The bill also creates new sales tax exemptions for respiratory syncytial virus medicines, and visosupplementaion therapies sales.
Finally, the bill reestablishes the Joint Committee on Taxation to conduct a cost benefit analysis on other sales tax exemptions.
South Carolina has an overly complicated tax code riddled with favors to select industries and special interests. In fact, state government currently exempts more in sales tax than it actually collects. That said, true tax reform must couple eliminating exemptions with a reduction in general tax rates. Eliminating exemptions without lowering general rates is little more than a tax increase.