South Carolina H 4603: Small Business Livable Wage Tax Credit Act

Bill Text

2025-2026 Bill 4603 Text of Previous Version (Dec. 17, 2025) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 4603

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS 
BY ENACTING THE "SMALL BUSINESS LIVABLE WAGE TAX CREDIT ACT" BY ADDING SECTION 
12-6-3830 SO AS TO PROVIDE FOR AN INCOME TAX CREDIT FOR CERTAIN QUALIFIED 
EMPLOYERS WHO PAY NONEXEMPT EMPLOYEES AT OR ABOVE THE LIVABLE WAGE.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 
1. This act may 
be cited as the "Small Business Livable Wage Tax Credit Act."

SECTION 2. The General Assembly finds 
that:

 (1) 
Small businesses employ approximately forty-three percent of South Carolina's 
workforce.

 (2) 
Small employers are the backbone of the state's economy and deserve support in 
remaining competitive.

 (3) 
Voluntary incentives, not mandates, are the most effective way to encourage 
free-market adoption of higher wages.

 (4) 
Employees who earn a livable wage contribute more in state and federal income 
taxes, strengthening the tax base and reducing reliance on public assistance.

 (5) 
A temporary, declining tax credit will allow small businesses time to adjust 
pricing, productivity, and operations while raising wages.

SECTION 3. Article 25, Chapter 6, Title 
12 of the S.C. Code is amended by adding:

 Section 
12-6-3830. (A) As used in this 
section:

 (1) "Qualified employer" means a 
business entity registered in this State that:

 (a) employs fewer than fifty 
employees;

 (b) is in good standing with the 
Secretary of State; and

 (c) elects to participate in this 
program voluntarily.

 (2) "Livable wage" means the hourly 
wage rate published annually by the MIT Living Wage Calculator, or a successor 
source approved by the Department of Employment and Workforce, specific to the 
county in which the employee works.

 (3) "Incremental wage cost" means the 
difference between the federal minimum wage and the livable wage, multiplied by 
the total hours worked by covered employees.

 (B)(1) A qualified employer may claim a 
credit against income or payroll taxes equal to the incremental wage cost of 
paying employees at or above the livable wage.

 (2) In the first year in which the 
credit is earned, the amount of the credit is one hundred percent of the 
incremental wage cost. Thereafter, the credit is seventy-five percent of 
incremental wage cost in the second year, fifty percent of incremental wage 
cost in the third year, and twenty-five percent of incremental wage cost in the 
fourth year. The credit may not be claimed beyond the fourth year.

 (3) Unused credit may be carried 
forward for two years.

 (C) To qualify for the credit, an 
employer must:

 (1) maintain or increase headcount 
relative to the previous tax year;

 (2) pay all nonexempt employees at or 
above the livable wage;

 (3) submit annual payroll verification 
to the Department of Revenue; and

 (4) remain current on all state tax 
obligations.

 (D) Participation in the tax credit is 
voluntary.

 (E)(1) The department shall promulgate 
regulations as necessary to implement the provisions of this section.

 (2) The department shall publish an 
annual summary report including:

 (a) number of participating employers;

 (b) number of employees paid livable 
wages;

 (c) total credits claimed; and

 (d) estimated increase in individual 
state income tax revenue from employees.

 (3) Individual employer payroll data 
may not be publicly disclosed.

SECTION 
4. This act takes effect upon approval by the Governor and first applies to 
income tax years after 2025. The provisions of Section 12-6-3830 are repealed 
on December 31, 2035. Any carryforward credits shall continue to be allowed 
until the two-year time period is completed.

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This web page was last updated on December 17, 2025 at 12:48 PM