MILITARY TASK FORCE LEADERS RALLY RETIREMENT PAY EXEMPTION SUPPORT

By January 24, 2019Economic Impact

 Economic Study Shows Benefits To State With Positive Revenue Impact

Columbia, SC, Jan. 24, 2019: The state’s Military Base Task Force Chairman Bill Bethea, Columbia Military Affairs Chairman Dan Beatty, and retired MG J.B. Burns, today presented to members of the state Sales & Use and Income Tax Legislative Subcommittee to support the military retirement pay exemptions proposed in H.3135, the Workforce Enhancement and Military Recognition Act of 2019. The bill amends Act 272 of 2016 and converts to a full military retirement income exemption starting in tax year 2021.

“This bill is a vital recruitment tool for our state,” said Bill Bethea. “Our manufacturers and technology companies are desperate for skilled workers, and the retired military represent precisely the type of experienced, dedicated professionals they seek. South Carolina is a wonderful state for these military families—we have a superior quality of life, low cost of living, and abundant job opportunities, but we compete against 30 states that exempt military retirement pay from income taxes. Full exemption of military retirement pay will make our state an even more desirable choice for the service members who retire from our Armed Services.”

“One recruiter at our quarterly Columbia Military Outreach meeting this week expressed that they are looking to hire 500 experienced workers for a company,” said Dan Beatty. “Those jobs are attractive to retirees from Fort Jackson and Shaw AFB, but the taxation of retirement income becomes a huge factor that these retirees avoid by moving to states like Alabama, Texas, or Florida. Those states have similar job opportunities but no taxation on military retirement pay.”

One concern expressed by opponents of the bill is the loss of revenue from the retirees that live here now. “Our economic analysis conducted by Clemson University economists indicates a projected loss of tax revenue of approximately $10.62 million against the total military retirement income coming into the state of approximately $1.532 Billion,” said Bethea. “The study concludes that the tax exemption on military pensions has a positive overall economic effect, and more retired military service personnel who migrate to South Carolina will add to the positive economic impact.”

The Clemson study is found here.