S866 allows certain municipalities to ask voters to approve a local sales tax of up to one percent. At least 20 percent of the revenue must be used to reduce property taxes on owner-occupied homes, and the remainder may be used for specified municipal projects. The bill establishes procedures for approving, collecting, and administering the tax and calculating the property-tax credits.

The South Carolina State House of Representatives passed S866 on May 13, 2026 by a vote of 96 to 16. We have assigned pluses to the nays because this bill does not provide genuine tax relief, but instead authorizes municipalities to increase one tax in exchange for reducing another. The sales tax would allow municipal governments to spend even more taxpayer money on projects and activities that are not proper functions of government. Furthermore, the property-tax credits favor certain property owners over others, allowing government to pick winners and losers through the tax code rather than treating all property owners equally. Although reducing property taxes is commendable, only a minority of the sales-tax revenue would need to be used for this purpose, meaning the bill's net effect would expand taxes and government spending.