Bill would exempt tips from income taxes in South Carolina
COLUMBIA, S.C. (WRDW/WAGT) - Some workers in South Carolina might not have to pay taxes on a significant portion of their income if a bill filed at the State House becomes law.
The “no tax on tips” push took off during the last presidential election, becoming a popular promise of President Donald Trump’s campaign.
Now there is an effort to bring it to South Carolina.
“This bill is simply stolen from Donald Trump’s agenda,” Sen. Matt Leber, R – Charleston and the legislation’s lead sponsor, said.
S.C. House es budget with billions for tax cuts, bridge fixes, teacher pay raises
Billions of dollars in taxpayer money could go toward tax cuts, road improvements, and pay raises for teachers in the next year in South Carolina.
The bill would exclude money made in tips from someone’s individual income taxes, defining tips as “discretionary payments determined by a customer that an employee receives from the customer, including, but not limited to, cash tips received directly from the customer and tips from a customer through electronic settlement or payment.”
It has bipartisan in the Senate, and Leber said it’s a popular idea in his hospitality-heavy Lowcountry district.
Leber said people who rely on tips for their living might already be paying little to no income taxes.
“I’m a Republican, and I’ve never met a tax cut I don’t like,” he said during a Senate Finance subcommittee hearing on the bill this week.
MORE FROM NEWS 12
South Carolina: Latest from the State House
- Outside auditors testify again on S.C.’s $1.8B discrepancy
- S.C. Gov. Henry McMaster to speak at South by Southwest Festival
- SCDOT eyes law change that would impact how much EV drivers owe state
- Change in S.C. law could expand options for kids in foster system
- S.C. House es liquor liability law, but tort reform effort stalls
- New partnership aims to help human trafficking victims in South Carolina
But a fiscal impact study on the legislation determined implementing it could result in a $14 million dollar hit annually to state revenue.
“I’ve been here long enough that we’ve targeted certain people and sectors for tax cuts, and sometimes, it’s like squeezing a balloon: When you squeeze it on one area, it pops out on the other and can shift the burden to other people,” Sen. Tom Corbin, R – Greenville, said.
The bill would apply to anyone receiving tips, not just to those specifically in the service or hospitality industries.
Corbin raised some concerns about that broad language opening the door for people to take advantage of the tax exemption.
S.C., Ga. attorneys general fight Chinese cyberspying through AI app
The attorneys general of 21 states including South Carolina and Georgia are urging Congress to ban the Chinese DeepSeek AI software from government devices.
“If I were to perform a job for a customer and that job was typically going to be priced at $1,000, and I was friends with this customer and I said, ‘How about writing me a check for $500 and tip me the other $500,’ I wouldn’t have to pay taxes on the other half?” Corbin asked.
Senators said they plan to work on an amendment for this bill, to be taken up at a future meeting, to address those concerns.
Similar legislation has been proposed at the federal level and in nearly two dozen other states, including North Carolina and Georgia.
Copyright 2025 WRDW/WAGT. All rights reserved.
