South Carolina Tax Rates

This post provides an overview of the primary taxes levied at the state level in South Carolina. The state is attractive due to its low property tax burden and tax-friendly environment for retirees, which features significant deductions for retirement income. The top individual income tax rate is also being phased down. For individuals or businesses seeking comprehensive support with tax filings, compliance, or strategic planning, indinero offers expert services. We encourage all who utilize this summary to explore the tailored tax support available through indinero.

Individual Income Tax

South Carolina utilizes a graduated state individual income tax system, with rates that are currently being phased down.

  • State Rates (2025): Rates range from 0.00% up to a top marginal rate of 6.0% (effective July 1, 2025, reduced from 6.2% in 2024). The zero percent bracket applies to the lowest segment of taxable income.
  • Retirement Income Exemption: South Carolina is very tax-friendly for retirees:
    • Social Security benefits are not taxable.
    • Individuals under 65 can deduct up to $3,000 of qualified retirement income.
    • Individuals 65 and older can deduct up to $10,000 of qualified retirement income (pensions, 401(k)s, IRAs, etc.).
    • Additionally, residents aged 65 and older are eligible for a $15,000 deduction on any source of income, which includes retirement income.
  • Local Income Tax: South Carolina does not impose a local or county income tax.

Sales and Use Tax

Sales tax combines a standard state rate with substantial local additions, resulting in a variable combined rate.

  • State Rate: The general state sales tax rate is a uniform 6.00% on the retail sale of most tangible personal property and certain services.
  • Local Taxes: Most counties impose an additional local option sales tax, which can range from 1.0% to 3.0%.
  • Combined Rate: The total combined state and local sales tax rate can reach up to 9.0% in the highest-taxed municipalities (e.g., Charleston, Richland/Columbia area) but averages around 7.49% statewide.
  • Tax on Groceries: Unprepared food (groceries) is exempt from the 6.00% state sales tax but is subject to a reduced 1.0% local tax rate in most counties.
  • Use Tax: A state use tax of 6.00% plus the applicable local rate applies to taxable items purchased outside of South Carolina but used, stored, or consumed in the state if state sales tax was not collected.

Property Tax (Ad Valorem Tax)

Property taxes in South Carolina are collected exclusively at the local level and are notable for being among the lowest in the U.S. for primary residences.

  • Assessment Ratios: Property is assessed at a fraction of its market value, with rates depending on the property type:
    • Owner-Occupied Primary Residence (4% Rule): 4.0% of fair market value.
    • Second Homes/Commercial Property: 6.0% of fair market value.
    • Personal Motor Vehicles: 6.0% of market value.
  • Homestead Exemption: Seniors aged 65 or older, blind, or permanently disabled homeowners who have been residents for at least one year are eligible for the Homestead Exemption, which exempts the first $50,000 of their primary residence’s fair market value from all local property taxes.
  • Appraisal Cap: Increases in a property’s market value due to reappraisal are capped at 15% every five years, unless the property is sold or improved.

Corporate Income and License Tax

South Carolina imposes a low, flat-rate corporate income tax.

  • Corporate Income Tax Rate: The corporate income tax rate is a flat 5.0% of the corporation’s South Carolina taxable net income. This is one of the lowest corporate rates in the Southeast.
  • Apportionment: For multi-state corporations, South Carolina uses a single sales factor apportionment method.
  • Corporate License Fee: C Corporations must also pay an annual License Fee of 0.1% of capital and paid-in surplus, plus a $15 annual fee, with a minimum fee of $25.

Unique and Miscellaneous Taxes

  • Motor Fuel Tax: A per-gallon tax is levied on motor fuels, set at approximately 28.8 cents per gallon for gasoline.
  • No Estate or Inheritance Tax: South Carolina does not impose a state-level estate tax or inheritance tax.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.