Don't monkey with tax laws until new review is finished

State lawmakers should not make any changes to current tax law until a new tax study commission finishes its work. That includes undoing the "point-of-sale" provision in the 2006 Property Tax Reform Act.

The unintended consequences of piecemeal tax law changes are exactly what the Taxation Realignment Commission was created to address. The legislature shouldn't add to the problem before the commission has a chance to do its job.

Real estate agents complain that putting property on the tax rolls at its new market value is hurting sales. They say buyers balk at the much higher tax bill they have to pay.

Many buyers have complained they were never told they would be facing a higher tax bill.

They may be legitimate concerns, but they should not be addressed outside a comprehensive study of our tax laws.

The law as it stands today requires property sold starting in 2007 to be immediately assessed at fair market value, usually its sales price. Property not sold or substantially improved is assessed once every five years. Increases in value for those properties are capped at 15 percent.

The new assessment offsets the revenue impact of the 15 percent cap for local governments, which also have to contend with a cap on the tax rate to raise money for operations.

A bill that has passed the House and is now in the Senate would put a 15 percent cap on the value of newly purchased property for assessment purposes. And that new value would be the starting point for the 15 percent cap when a county's five-year reassessment comes around.

Right now, the proposed new cap would apply to properties bought in 2009. It would not apply to properties purchased in 2007 and 2008.

The estimated statewide impact of the change is a $44 million loss in revenue for local governments. Beaufort County officials say they stand to lose about $8 million.

Our objection to the change isn't about money lost to local governments. It's about seeking a cohesive tax policy for South Carolina. No changes to tax law should be made until the Taxation Realignment Commission issues a report. It has a March 15 deadline.

Its charge includes this: "The commission's report must be a detailed, comprehensive, and careful evaluation of the state's tax system structure."

Many of the lawmakers who voted to create the tax study commission and who voted for this mandate for the committee are now pushing to revise this single provision in the Property Tax Reform Act.

If they want a comprehensive review of the state's tax laws, they must resist the temptation to continue to change a little bit here and a little bit there in the meantime.

It's bad enough that they took off the table for review the provision of the act that exempts resident homeowners from school operating taxes, leaving that tab to be picked up by nonresident and commercial property owners and a statewide sales tax.

It makes a joke of the idea of a "comprehensive" review.

Lawmakers should take a deep breath and wait for the commission to do its work and report back to them.