South Carolina Passes Tax Cuts, Lawmaker Pay Raise, and School Bathroom Law

The South Carolina General Assembly concluded its 2026 session on May 14 after five months of debate. Lawmakers worked late to pass bills before adjournment, clearing measures on taxes, compensation, school policy, and transportation. Several proposals, including hemp regulation and abortion changes, did not survive the final day.

- The income tax now has two brackets: earnings up to $30,000 are taxed at 1.99%; earnings above $30,000 face a 5.21% rate with a $966 deduction. - Legislators’ base salary will increase from $22,400 to $47,500 for members elected to the 128th General Assembly in 2028, with future adjustments capped at 5% every two years. - School districts that fail to require students to use bathrooms matching their biological sex may lose as much as 25% of state funding until they comply; the law also mandates a single‑user facility as an accommodation.

Taxpayers earning less than $30,000 will see a modest reduction in their state tax bill, while higher earners will pay a slightly higher marginal rate offset by the deduction. The pay raise more than doubles lawmakers’ base compensation, aligning it with inflation and cost‑of‑living increases noted in prior budget discussions.