Don't Mess With Taxes

On Sunday, Oct. 1, grocery bills in South Carolina will be a bit smaller.

That day, the state's sales tax on food items will drop from 5 percent to 3 percent.

But what state lawmakers give, they also take away. In June 2007, South Carolina's state sales tax on all other items will increase by a penny to 6 percent.

Some homeowners, though, will see their property tax bills, which will be arriving in the next couple of months, cut in half. The decrease is possible thanks in part to the coming state sales tax hike.

And when the big post-Thanksgiving shopping event arrives this November, South Carolina bargain hunters will get a bonus. The state won't collect state sales tax on any products purchased on Friday, Nov. 24, and Saturday, Nov. 25.

Whew! Looks like some Palmetto State residents are going to get tax whiplash dealing with all these tax changes.

Not everyone was happy with the tax changes. Opponents of the state sales tax hike said it will hurt lower-income South Carolinians, who also are less likely to recoup any property tax relief.

And while the reduction of sales tax on grocery items will provide some tax help to less wealthy South Carolinians, by next summer they, along with everyone else in the state, will be paying higher taxes on all other purchases.

Gobbling up sales tax savings: The addition of a second sales tax holiday wasn't as controversial, even though the South Carolina coffer will definitely take a hit.

Unlike the annual August tax holiday, which is billed as a back-to-school event and waives state sales taxes only on school-related purchases, the two November tax-free days eliminate sales tax collection on every item bought. Local sales taxes, however, will still apply.

The Friday and Saturday after Thanksgiving are traditionally among the busiest shopping days of the year. With this year's added no-tax component, even more South Carolina shoppers are likely to be out in force at the state's shopping centers.

But those more crowded malls on Nov. 24-25 won't do the South Carolina treasury any good, a trend that the state tax collector is getting used to. According to the SC Department of Revenue, the August tax-free weekend has become the third busiest shopping weekend of the year, behind the Thanksgiving weekend and the weekend before Christmas.

Hmmm. Weekend before Christmas. Maybe next year, it'll get its own sales tax holiday, too.