Tax: SC Tax Update

South Carolina Update…

South Carolina Pledge Breakers Override Sanford’s Veto
Legislators Betray Constituents with a 700 percent Tax Increase

WASHINGTON, May 13, 2010 /PRNewswire-USNewswire/
The South Carolina legislature recently overrode Gov. Sanford’s veto on House Bill 3584, legislation that will increase the tax on cigarettes in South Carolina by more than 700 percent. Sanford’s veto was overridden by a vote of 90-29 in the House and 33-13 in the Senate. In casting “aye” votes, the following legislators broke a central campaign promise to their constituents to oppose any and all efforts to raise taxes:
Dick Elliott (S-28)
Michael Fair (S-6)
John Yancey McGill (S-32)
Nikki G. Setzler (S-26)
Jimmy Bales (H-80)
Bruce Bannister (H-24)
Kenneth A. Bingham (H-89)
Bill Bowers (H-120)
Joan Brady (H-78)
Marion Frye (H-39)
James Harrison (H-75)
Chip Huggins (H-85)
Lanny Littlejohn (H-33)
Jay Lucas (H-65)
James H. Merrill (H-99)
Rex Fontaine Rice (H-26)
Murrell Smith (H-67)
J. Roland Smith (H-84)
Annette Young (H-98)
“This vote for higher taxes at the state level comes at a time when South Carolina families and businesses are trying to cope with the $670 billion in higher taxes that have been passed out of Washington in just the past year,” said Grover Norquist, president of Americans for Tax Reform. “In light of this, and the fact that state government in Columbia has continued to increase spending while South Carolinians are making due with less and unemployment has skyrocketed, it’s unconscionable that South Carolina legislators find it acceptable to pile on with more job-killing tax increases at the state level.”
With this 700 percent tax increase, South Carolina’s cigarette excise tax is now higher than neighboring states of Georgia and North Carolina. Passage of HB 3584 represents the largest state tax increase South Carolina has seen in over a quarter century.
“This tax increase only serves to siphon more money from the economy and makes South Carolina increasingly dependent upon the federal government, which, in case anyone has missed, is over $12 trillion in debt,” added Norquist. “Fortunately, this being an election year, Palmetto State taxpayers won’t have to wait long to hold these elected officials accountable for going against their word.”
Americans for Tax Reform is a non-partisan coalition of taxpayers and taxpayer groups who oppose all tax increases. For more information or to arrange an interview please contact John Kartch at (202) 785-0266 or by email at
SOURCE Americans for Tax Reform

Senate overrides Sanford veto, raises cigarette tax
May 13, 2010
South Carolina lawmakers have overridden Gov. Mark Sanford’s veto and raised what was the nation’s lowest cigarette tax by 50 cents a pack.
Thursday’s vote raises the 7 cent tax to 57 cents a pack on July 1 and leave Missouri with the nation’s lowest tax at 17 cents.
The 33-13 vote in the Senate followed a 90-29 vote in the House on Wednesday after the Republican Sanford had said he wouldn’t allow a tax increase on cigarettes unless it was offset by some other tax decrease.
The measure raises nearly $125 million to cover the loss of federal bailout cash next year in Medicaid programs for the elderly, disabled and poor. It also is expected to generate $5 million each for cancer research and efforts to curb smoking and $1 million for agriculture marketing.

Budget debate turns to sales, cigarette taxes
March 17, 2010
South Carolina legislators expect to spend a chunk of the day debating higher sales and cigarette taxes.
Wednesday’s debate comes as legislators try to wrap up discussions on a $5 billion spending plan.
Already more than 30 proposals are up for debate to raise the state’s cigarette tax by as much as $1.10 cents a pack. The current tax of 7 cents a pack is the nation’s lowest.
Democrat state Rep. Anton Gunn of Columbia has proposed eliminating all sales tax exemptions in a proposal that would raise more than $1 billion

Senate passes cigarette-tax boost
Measure goes to Sanford; veto is expected
May 6, 2010
By Yvonne Wenger, The Post and Courier
The next move in the decades-long fight to increase the state’s cigarette tax belongs to Gov. Mark Sanford.
Sanford’s communications director Ben Fox said Wednesday that the governor will carefully review the bill to raise the tax by 50 cents on a pack of cigarettes. His comments came after the Senate voted 41-1 to give the bill final approval.
“We’ve repeatedly expressed grave concerns about raising the overall tax burden on South Carolinians without corresponding tax relief,” Fox said.
South Carolina has the lowest state cigarette tax in the nation at 7 cents a pack. The national average is $1.41 a pack.
Most of the $136 million raised would go toward future Medicaid expenses. About $10 million would be set aside for smoking cessation and prevention and cancer research at the Hollings Cancer Center at the Medical University of South Carolina for lung cancer research.
It also would give $1 million to marketing agriculture products.
Sanford is expected to veto the legislation, as he did two years ago. In May 2008 the House fell 20 votes short of the total needed to override a veto on a 50-cent increase.
The same could happen this year. The House showed lukewarm support for a 50-cent increase that eventually passed by a voice vote April 20. Many in the House pushed for a 30-cent increase, so it’s unclear if the House will have enough support to find the 83 members needed to override the expected veto.
House Ways and Means Committee Chairman Dan Cooper, R-Piedmont, said it was more likely that a veto could be overridden with a 30-cent tax, but polling showed a veto of a 50-cent increase might stand.
But the prospects may have brightened with legislators weary of annual battles on the issue. “People are tired of dealing with that issue in the Legislature and want to get it behind them” Cooper said.
The Senate’s vote on Wednesday shows enough support to overturn a veto. Sen. Lee Bright, R-Roebuck, was the only senator to vote against the bill.
Kelly J. Davis, spokeswoman for the South Carolina Tobacco Collaborative, said advocates are trying to build more support.
“Poll after poll over the years shows that the vast majority of South Carolinians would support a cigarette tax increase of $1 a pack,” Davis said. “The public support is there for this legislation.”
Research by the Campaign for Tobacco-Free Kids shows that a 50-cent cigarette tax increase would prevent 23,300 South Carolina children from becoming smokers and would prompt 12,800 adult smokers to quit, according to Davis.
Smoking has become more expensive around the nation, with the average smoker paying $5.28 a pack when taxes are included. South Carolina’s average price would be $4.28 a pack with the increase. The federal tax last year jumped 62 cents a pack to $1.01.
South Carolina’s 7-cent tax has been in place since 1977. If the increase becomes law, Missouri would then have the nation’s lowest tax at 17 cents a pack. Rhode Island’s tax is the highest at $3.46 per pack.

Firing up cigarette tax
Approval would save lives, money, officials say

March 9, 2010
By Prentiss Findlay , Yvonne Wenger, The Post and Courier

Raising the state’s cigarette tax would save lives, discourage children from taking up the habit and shift more of the estimated $1 billion in annual tobacco-related disease costs back to smokers while providing millions of dollars in new state revenue, officials said Monday.

“The higher the taxes, the more lives that we can save. It’s time for South Carolina to do what is right for our state,” said Dr. Charles P. Darby Jr., Medical University of South Carolina professor emeritus of pediatrics and executive director of the Children’s Hospital Center for Child Advocacy.

“Those of us who do not smoke pay higher health insurance premiums and taxes to subsidize the habit of smoking,” he said. “It is time the smoker pays for some of the cost.”

The state’s 7-cents-per-pack tax is the lowest in the nation. A 30-cent increase is before the House as part of the state budget, which will be debated on the floor beginning Monday.

The Senate has a 50-cent increase on the table that the House approved last year. The state has not raised cigarette taxes in more than 30 years.

“Every delay just allows more children to get hooked on cigarettes,” Darby said.

The state spends more than $393 million annually treating sick smokers covered under Medicaid, Darby said. He spoke at the MUSC Children’s Hospital during a news conference sponsored by the South Carolina Tobacco Collaborative, a statewide consortium of public health organizations, businesses and individuals working to reduce the toll of tobacco use in the state. Member organizations include the American Cancer Society, the American Heart Association and the American Lung Association.

Rep. Chip Limehouse, a Charleston Republican and a ranking member of the House Ways and Means Committee, made the proposal to get the 30-cent increase in the budget. He said a cigarette tax increase is about the only tax increase he could support and that it’s more important than ever to pass it now. New cash for Medicaid will free up money for schools, law enforcement and other priorities.

“I would like to see $1 per pack. Whatever we could get,” Limehouse said at the news conference. “Tell your friends to support the Limehouse amendment.”

In May 2008, the House was 20 votes short of the total needed to override a veto by Gov. Mark Sanford on a 50-cent increase. At that time, the House and Senate had agreed to use the cash on Medicaid expansions and helping lower-income workers buy health insurance, covering as many as 200,000 more South Carolinians.

The federal government last year raised its tax on a pack by 62 cents to $1.01. The extra money is being used to expand the State Children’s Health Insurance Program, which provides care for low-income children.

Sanford for years has pledged to veto any tax increase that does not come with a corresponding decrease.

The governor said again in his State of the State address in January that he wants a cigarette tax increase to be used to cut corporate income taxes to make the state more competitive.

“We’re very much of the same mind as we’ve been in years past — that being that we’d definitely be open to an increase in the cigarette tax if it was accompanied by a corresponding tax cut in some other area. In fact, we’ve proposed just such an action in years past,” Ben Fox, communications director for Sanford, said in an e-mail Monday.

The House on Thursday gave key approval to a plan that eliminates the corporate income tax, as a way to make the state more attractive to business, making a cigarette tax increase this year even more likely.

State revenues have plunged by more than $2 billion in the past three years. Spending is now about $5 billion. Money from the federal stimulus package will help the state continue to provide some services in the upcoming budget that starts July 1, but that money will be gone the following year.

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