This history of South Carolina's state and local revenue system traces the evolution of the system from colonial days to the present. Until 1920 all levels of government in the state relied almost completely on taxation of personal and real property. By 1951, South Carolina made changes in its revenue system that produced its current state tax structure of fees and excise taxes, personal and corporate income taxes, and a sales and use tax. By the 1940s the property tax became the main source of support for county and municipal governments and school districts.

The influence of social, political, and economic changes in South Carolina on the evolution of the revenue system are placed in historical context. From 1920 to 1990 a series of independent tax study commissions and studies provided guidance and recommendations to policymakers. These groups provided the kind of in-depth information that was needed to help the General Assembly to produce a system that today is characterized as equitable and balanced -- an income tax and sales and use tax at the state level and the property tax at the local level. The contributions of these study commissions and consultants to the evolution of the system are detailed in the paper.

However, South Carolina's revenue system is under stress today. The revenue structure has been significantly altered in the past 20 years in response to various interest groups seeking tax relief from income taxes and property taxes. The authors close their report with the observation that so many piecemeal changes have been made to the revenue system since 1990 that its equity and balance and ability to provide sufficient revenue are in jeopardy. Since it was at just such times in the past that the South Carolina legislature turned to study commissions to make comprehensive assessments of its revenue system, the authors suggest that it may now be time to reinstate the historical tax study commission model. That model focused on maintaining a balanced and equitable revenue system which provided adequate revenue to meet state and local needs while also ensuring that the revenue system was not out of line with the systems of other southern states.

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