S. 507 updates South Carolina’s income tax conformity statute to match the federal Internal Revenue Code as amended through December 31, 2024, instead of December 31, 2023. The bill also clarifies that if federal provisions adopted by South Carolina are extended by Congress after they would otherwise expire, those extensions will automatically apply for South Carolina income tax purposes as well, so long as the federal provisions are extended without other amendment.
In practical terms, the bill keeps state tax law aligned with federal tax law for the 2025 tax year and related filing periods. This reduces the need for separate state-level tax adjustments when Congress extends temporary federal tax provisions and helps preserve consistency for taxpayers, preparers, and the Department of Revenue. The act takes effect upon approval by the Governor.
Impact
The bill amends Section 12-6-40 of the South Carolina Code, which governs how the state incorporates the federal Internal Revenue Code into South Carolina tax law. Its main legal effect is to advance the state’s conformity date from December 31, 2023 to December 31, 2024 and to extend automatic conformity to certain federal provisions that Congress later extends during 2025. This affects South Carolina income tax administration, taxpayer calculations, and the scope of deductions, exclusions, credits, and other federal tax provisions that flow through to state law.
Sentiment
The bill appears to have been broadly supported and largely noncontroversial. It passed the Senate 39-0 on second reading and the House 108-2 on final passage, indicating strong bipartisan agreement. The committee report recommended that the bill do pass, and there is no recorded committee debate in the provided materials.
Contention
There is little visible contention in the available record, and no committee transcripts were provided. Any disagreement appears minimal, as reflected only by the two dissenting votes in the House. The likely policy question is whether South Carolina should automatically conform to the federal tax code update and future federal extensions, but the bill’s strong vote margins suggest most legislators favored conformity for administrative simplicity and taxpayer consistency.