Subcommittee advances bill to prevent sales tax on foods removed during USDA demonstration

A legislative subcommittee voted to give bill 5208 a favorable report to the full committee after hearing that the bill would keep certain unprepared foods exempt from sales tax while they are temporarily unavailable for purchase with food coupons under a U.S. Department of Agriculture demonstration project.

Staff told the panel the bill amends the existing exemption in section 12 36 21 20 to specify that foods removed from SNAP purchases for a limited time because they are demonstration products under USDA regulations remain exempt from sales tax.

Jay Hicks, president of the South Carolina Beverage Association, told the committee the governor’s office supports the measure and warned of an unintended consequence without the change: "Without making this, this would be a tax increase on everyone," Hicks said, arguing that products temporarily removed from SNAP purchase lists during the two‑year waiver period could otherwise become subject to sales tax paid by all consumers.

The chair asked a clarifying question — "So you're telling me if we don't pass this bill, they're gonna start taxing my Coca Colas?" — and Hicks replied, "Yes, sir." With no extended discussion, the subcommittee proceeded to a roll‑call vote and gave the bill a favorable report (four ayes).

The measure now goes to the full committee; sponsors and staff said the bill is intended to preserve the status quo during the USDA demonstration and avoid an incidental tax on consumers while the demonstration is underway.