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COLUMBIA, S.C. (WACH, AP) -- The South Carolina House has approved two key tax reform bills Tuesday that could give SC taxpayers a break.

Legislators voted 104-3 on Tuesday to collapse the state's six individual tax brackets into three brackets and give all residents who pay taxes a modest break. Budget advisors expect it would reduce state revenues by $78 million.

The House also passed a bill with a 104-3 vote to cut the small business active income tax rate from 5 percent to 3 percent. That reduces revenue by $15 million in 2012-13 and $65 million annually when fully implemented.

The bills are part of a tax-cutting package introduced last month by House Republicans.

"Today, we took a significant step down the path that will lead to permanent comprehensive tax reform in our state.  We believe that working families in South Carolina deserve a tax code that is flatter, fairer and more competitive.  This will allow businesses to invest more of their resources into growing their business and creating jobs for our state.  Making individual income tax rates flatter and fair will not only simplify our tax code but will also give 4 out of 5 South Carolinians filing returns a tax cut," said House Speaker Bobby Harrell.

The measure received bipartisan approval after House Minority Leader Harry Ott put up an amendment delaying the cut until next year.

The St. Matthews Democrat told Republicans that otherwise the bill was sure to die in the Senate. He argued the House shouldn't create a $78 million hole in the budget it passed last month without identifying corresponding cuts.

The Senate Finance Committee is working this week on its 2012-13 budget.

(The Associated Press contributed to this report.)