South Carolina lawmakers considering bill that would exempt military retirees from paying state income taxes
COLUMBIA, S.C. (WIS) - Corporal Steven Diaz proudly calls South Carolina home.
The United States Marine Corps veteran said some veterans are passing up on the Palmetto State when they retire from the military. "A lot of them do enjoy South Carolina. Because of the retirement pay getting taxed, a lot of them choose to go to states like North Carolina," Diaz said.
Right now, in South Carolina, military retirees under the age of 65 can claim state tax exemptions of up to $14,600. Retirees who are over 65, can claim an exemption of up to $27,000.
This could change under the Workforce Enhancement and Military Recognition Act (H.3135).
The legislation would allow an individual tax payer who has military retirement income each year to deduct an amount of their South Carolina earned income from South Carolina taxable income equal to the amount of military retirement income.
Essentially, veterans would not have to pay state taxes on their retirement income. A handful of states have made this change like North Carolina and Florida.
"With us being able to change something like that it's going to increase the number of veterans and their families to South Carolina, it's going to have a huge economic impact ," Diaz said.
There are some concerns the state would miss out on millions of dollars of state income tax revenue but supporters of the legislation believe the economic impact of more veterans in the state will make up for it.
Diaz said other than just the financial side of things, veterans can be good role models. "Your veteran is your ultimate leader. We need more of that in South Carolina."
The Workforce Enhancement and Military Recognition Act passed the House earlier this year by 106-0 vote. It is currently in committee in the Senate.
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