If you’re considering a move to South Carolina or have been a resident for only a short time, you may have questions about South Carolina’s tax structure. This online brochure explains the major state and local taxes of which you should be aware, including income, property, sales and use, motor fuel and a few other taxes.
South Carolina has a simplified income tax structure which follows the federal income tax laws. South Carolina accepts the adjustments, exemptions and deductions allowed on your federal tax return with few modifications. Your federal taxable income is the starting point in determining your state income tax liability.
Individual income tax rates range from 3% to a top rate of 7% on taxable income. For tax year 2007, there is no tax on the first $2,630 of taxable income. Tax brackets are adjusted annually for inflation. Individuals, estates or trusts can use an optional income tax rate to compute the tax on active trade or business income received from a pass-through business in lieu of the standard income tax rate.
Additions to Income
Certain items of income must be added back to your federal taxable income for South Carolina purposes.
If you moved to South Carolina during the year, you are a part-year resident. As a part-year resident, you may consider yourself a full-year resident or a nonresident. If you choose to file as a full-year resident, claim all your income as though you were a resident for the entire year and take a credit for any taxes paid in another state. If you choose to file as a nonresident, report only the income you earned in South Carolina. Your deductions and exemptions will be prorated by the same percentage as your South Carolina income compares to your total income.
You may choose the method which benefits you the most. You may need to complete your return both ways to determine which option is best for you.
Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, capital gains and prizes. You also may have to pay estimated tax if there was not enough tax withheld from your salary, pension or other income.
Estimated tax is paid in quarterly installments on April 15, June 15, September 15 and January 15.
South Carolina does not impose an Estate Tax or a Gift Tax.
Counties, cities and school districts are authorized to impose ad valorem taxes on real and personal property. Local governments assess and collect most property taxes. Property tax dollars support public schools and the services provided by local governments.
The market value of a legal residence and up to five acres of surrounding land is assessed at 4% of fair market value. The millage rate of the local government is then applied to the assessed value resulting in the tax liability. The millage rate is set by local governments and varies widely throughout the state.
The fair market value of owner-occupied residential property receiving the 4% assessment rate is exempt from all property taxes imposed for school operating purposes.
For example, based on a $100,000 owner-occupied residence assessed at 4% with a millage rate of 200 mills, the property taxes would be $800. Millage rates vary from county to county and you would need to check with officials in the county you wish to reside to estimate your property tax liability.
If you have established a one-year residency and you are age 65 or older, legally blind or permanently and totally disabled, you are eligible for a homestead exemption of $50,000 from the value of your home. Based on the example given earlier, the same $100,000 owner-occupied residence receiving a homestead exemption and assessed at 4% with a millage rate of 200 mills would have a property tax liability of $400.
The assessment ratio on a second home or vacation home is 6%. Property tax relief does not apply to a second home.
To find out more about the tax on real estate, call the assessor in the county where you live or plan to relocate. Jocasee Real Estate's properties are mostly in Oconee and Pickens Counties.
South Carolina has a tax website available: www.sctax.org
This information was adapted from the following publication from sctax.org: Moving to South Carolina.
Assessor's Office415 South Pine StreetWalhalla, SC 29691 (864) 638-4150 Fax: (864) 638-4156
Office Hours8:30 AM to 5:00 PMMonday - Friday864-638-4150/4151
Pickens County Assessor's Office222 McDaniel Ave B-8 Pickens, SC 29671
Office HoursMonday - Friday8:00am - 5:00pm(864)-898-5872