NFIB, the nation’s leading small business advocacy organization, on May 7, 2025, praised the South Carolina House of Representatives for passing a tax reform bill that lays the groundwork for a simpler, fairer tax code — and a potential path to a 0% income tax rate.

House Bill 4216, passed this week, reduces the number of income tax brackets from three to two, establishing a 1.99 percent rate on income up to $30,000 and a 5.39 percent rate on income above that threshold.

The measure also sets a long-term path toward reducing and potentially eliminating the income tax rate over time as state revenues grow.

“This is a strong signal from the House that they are serious about pro-growth tax reform,” said NFIB State Director Ben Homeyer. “Small business owners have been asking for a simpler system that allows them to reinvest in their businesses, and House Bill 4216 is a major step in that direction.”

NFIB credited House leadership, especially Chairman Bruce Bannister and Rep. Brandon Newton, for championing the measure and keeping small business priorities front and center during tax negotiations.

The bill also maintains deductions for Social Security and military retirement income, helping ensure that retirees and working families continue to benefit from key exemptions.

In addition, officials said updated withholding tables are expected to reduce the state’s history of over-collecting from South Carolina workers’ paychecks.

The Senate is expected to consider similar tax reform legislation in the 2026 session.

“We applaud the House for moving boldly and responsibly to streamline South Carolina’s tax code,” Homeyer said. “This reform isn’t just good policy—it’s a down payment on a more competitive and opportunity-driven future for our state.”