Tax cuts will take effect in a number of states and localities on the first day of 2025. In North Carolina, for example, the state’s flat personal income tax rate drops from 4.5% to 4.25%. A New Year’s Day income tax cut is also taking effect next door in South Carolina. As the ball drops in Times Square, so too will the Palmetto State’s top marginal income tax rate, falling from 6.4% to 6.2%.
In accordance with a tax bill enacted in 2022, South Carolina’s top marginal rate is scheduled for two more annual drawdowns that will ultimately bring the top rate down to 6%. Leading South Carolina lawmakers, however, have made it clear they don’t want that to be the end of income tax rate reduction and that further tax relief is a top legislative priority in 2025.
“Number one for me is going to be tax relief,” South Carolina House Speaker Murrell Smith recently said of his 2025 priorities. In making the case for income tax rate reduction, Speaker Smith notes how much higher South Carolina’s top marginal rate is than those levied by competing states…