Lower TAX Bills Coming Soon!

Lower tax bills are coming soon to a mailbox near you! In June 2006, Governor Mark Sanford signed into law a bill passed by the Legislature that was designed to lower residential property taxes. The law made other changes including: reduced the sales tax on groceries to 3% and capped reassessment increases of taxable value on all classes of property to 15% over a 5 year period. The property tax reduction applies ONLY to your primary residence (with a 4% tax assessment ratio).

Specifically, the new property tax law eliminates the school operating portion of property taxes on primary residences and replaces them with a one-cent statewide sales tax increase to 6% (was effective June 1, 2007).

Of course, if one tax (state sales tax) goes up and another(property tax) goes down, do you really save? Representative Nathan Ballentine explains this very well in a recent blog:
" Simply put here’s how it works:
* Let’s say your tax bill is $200 less this year. (That reduction right there “feels good”).
* If you pay less than $200 in extra sales tax this year on purchases, you came out ahead.
How much “stuff” would you have to purchase this year to pay $200 extra in sales tax (based off the 1% sales tax increase that was part of this legislation)? $20,000 of “stuff”. Think you’re going to do that? " (Thanks Nathan for that blog)

Well, the good news is that for the great majority of S.C. residents, there will be a significant tax reduction.

I analyzed five 2007 tax bills for Richland County and five 2007 tax bills for Lexington County and compared this to actual 2006 bills. The results...
Richland County bills LOWER 47.8% (A 2006 tax bill of $2587 drops to app. $1351 ON AVERAGE).
Lexington County bills LOWER 51.5% (A 2007 tax bill of $2814 drops to app. $1364 ON AVERAGE).
(Please note that my analysis is a random selection of just 5 residential homes in each county - millages, etc. may vary by area of county)

More information on the Internet:
South Carolina Tax Guide
Check Richland County taxes: be sure to click calculate (for 2007 bill) and also click legal residence
Check Lexington County taxes

A TIP from Mel Coker: Make sure when you receive your tax bill in November that you are getting the legal residence exemption (4% assessment ratio) if you own your primary residence.

More good news: A new tax bill passed in 2007 will eliminate grocery taxes all together effective November 1, 2007.