For the first time in South Carolina history, multiple governments in the same county are proposing a penny tax to fix roads and other infrastructure.
The South Carolina General Assembly passed the Municipal Tax Relief Act in May, which allows cities to impose a 1% sales tax if approved by voters. Previously, only counties could propose such a tax. Only municipalities within a county that has not enacted a penny tax may impose their own if approved by voters.
South Carolina has three counties without a local sales tax: Greenville, Oconee and Beaufort. Greenville County most recently failed to pass a capital projects sales tax in the 2024 general election.
Greenville and Simpsonville city leaders are now actively exploring a penny tax to fund capital projects. Greenville County Council has also taken steps to put its own local sales tax referendum back on the ballot this November.
Qualifying purchases in those cities that levy a penny tax could potentially see a two cents per dollar sales tax if voters also approve the county referendum.
City of Greenville penny tax
The city of Greenville estimates that a 1% sales tax could generate about $400 million over the next eight years – approximately $50 million annually. State law requires that at least 20% of the tax revenue be used for property tax relief to owner-occupied homes in the city.
The remaining $320 million would go towards capital projects approved by the voters. Greenville City Council reviewed a preliminary list of projects during its June 22 work session. The presented list – which is subject to change – included streetscape enhancements, bridge replacements, sidewalk additions, sewer upgrades, stormwater improvements and other infrastructure projects.
“In 2024, we know (the county penny tax) was overwhelmingly supported by city voters. We believe that the city voters still very much would support this and want this now,” said Greenville City Councilmember Dorothy Dowe.
Governing bodies wishing to bring a local sales tax proposal before voters in November must approve an ordinance to submit a referendum to the Greenville County Voter Registration and Election Board by Aug. 17. Greenville City Council expects a first reading on an ordinance during its July 13 meeting, with a potential final reading on Aug. 10.
Simpsonville penny tax initiative
Simpsonville City Council also advanced an ordinance for a 1% local sales tax referendum during its Committee of the Whole meeting on June 23. Council’s first reading on this item is expected to be held on July 14, with a final reading on Aug. 11.
A penny tax in Simpsonville would generate approximately $60 million for the city over eight years. A $12 million property tax credit would be provided to property owners in the city limits.
City leaders plan to use the remaining $48 million to fund 138 infrastructure projects across more than 40 miles of city-owned streets. The projects include street resurfacing, drainage improvements, sidewalk enhancements and neighborhood safety improvements.
Greenville County began revisiting a local sales tax shortly after the passage of the Municipal Tax Relief Act. This time around, the county wants to impose a transportation sales tax to fund road projects.
“With the legislation currently in Columbia around the municipal penny, we know that this is about the last chance we’ll have for rural Greenville County to have a shot at having that additional revenue to get our roads up to date,” said Greenville County Council Chairman Benton Blount.
If approved by voters, the transportation sales tax would generate an estimated $1.1 billion over eight years for Greenville County. Approximately 90% of the generated tax revenue would go towards local road projects, 7% for greenbelts (land preservation, parks, trails initiatives) and 3% to Greenlink.
Greenville County Council advanced an amended ordinance to place a penny tax referendum on the November ballot during its June 16 meeting. A third and final reading on the item is expected to take place on July 21.
If placed on the ballot and approved by voters, the local sales taxes discussed by the municipalities and county would take effect on May 1, 2027, and remain in place for up to eight years.
Where governments in Greenville County stand on a penny tax
Updated July 15
Greenville County: County Council advanced an amended ordinance for a penny tax referendum at its June 16 meeting. A final reading is expected to take place on July 21 to put the referendum on the November ballot.
Greenville: City Council approved the first reading of an ordinance for a penny tax referendum at its July 13 meeting. The second reading of the ordinance is expected to take place on Aug. 10.
Simpsonville: City Council gave initial approval to an ordinance to include a penny tax referendum on the November ballot at its July 14 meeting. The item will go before City Council for final approval on Aug. 11.
Greer: City Administrator Andy Merriman briefly spoke to council about a penny tax during its June 23 meeting. He said this could be something council could explore for the next election cycle after 2026.
Mauldin: City Council will discuss the possibility of a penny tax during its July 20 meeting.
Fountain Inn: Council discussed the Municipal Tax Relief Act in executive session during a special called meeting on June 23. Fountain Inn City Administrator Shawn Bell said it is “extremely unlikely” the city will pursue a penny tax this year.
Travelers Rest: City Council approved first reading of a plan to ask voters to approve a penny tax during its July 14 meeting.
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Project example
A penny tax would allow the city of Greenville to fund capital projects that have been discussed for many years but lacked funding.
For example, the city plans to replace the 99-year-old bridge on Queen Street. The project was originally chosen to be funded through Greenville County’s capital projects sales tax program in 2024. However, that referendum was rejected by voters.
The city has now included the $11 million bridge replacement on its preliminary list of capital projects that would be funded by a 1% local sales tax if approved by voters in November.
