Charleston, South Carolina, Financial Overview
South Carolina Taxes Keep Temperatures Hot For Owners of Charleston SC Real Estate
Spirited debates about South Carolina taxes always seem to keep temperatures hot, hot, hot at the South Carolina Statehouse. State senators and representatives are constantly exploring ways to reduce the tax burden on South Carolina and Charleston real estate owners while fueling the state’s financial health. This never-ending tale defines South Carolina's politics.
In a state with so much going for it, including a growing population, a vibrant diversified economy and natural beauty that epitomizes the picture-perfect image of the Old South, the South Carolina tax burden is an estimated 10.7% of income, which ranks the state 26th highest in the U.S. (near the national average of 11.0%). South Carolina taxpayers pay $3,520 per-capita for state and local taxes, with their per capita income estimated at $32,790, a dismal 43rd in the nation. Locals and owners of Charleston SC real estate rank the third highest in the state in per capita income behind Beaufort and Greenville counties.
South Carolina Personal Income Taxes
The Palmetto state’s personal income tax system features six income brackets with the top rate of 7.0% kicking in at just $12,850. Among states levying personal income taxes, South Carolina’s top rate of 7.0% is the 12th highest nationally.
South Carolina is a Beneficiary State which means that the state’s taxpayers receive more federal funding per dollar of federal taxes paid than the average state. In 2004, the South Carolina citizens received about $1.38 in the way of federal spending, ranking the state 17th highest nationally. Neighboring states and the amount of federal spending per dollar of federal taxes collected include North Carolina at $1.10 and Georgia at $.96.
South Carolina Property Taxes
South Carolina is one of the 37 states that collects property taxes at both the state and local levels. Each class of property is assessed at a ratio unique to that type of property. Primary residences are accessed at 4.0% of fair market value; privately owned agricultural property at 4.0% of use value; and personal property at 10.5% of income tax depreciated value. Each county and municipality then applies its millage rate to the assessed value. As these rates vary among the taxing districts, owners of South Carolina real estate are advised to contact the local county assessor for specific information.
As in most states, local governments collect far more of the property tax dollars than the state government. Approximately two-thirds of the county-levied property taxes are used to support public education.
South Carolina also imposes a casual excises tax of 5.0% on the fair market value of all motor vehicles, motorcycles, boats, motors and airplanes transferred between individuals. The maximum casual excise tax is $300.
South Carolina offers state tax credits to private landowners to encourage voluntary conservation of important natural lands. South Carolina is a leader in offering incentives for voluntary conservation.
South Carolina Inheritance and Estate Taxes
There is no inheritance tax in the state of South Carolina. Because the state follows federal rules regarding the taxation of estates, the phase-out of the credit means that for deaths after Jan. 1, 2005, no state estate tax is due.
South Carolina Sales Tax
On July 1, 2007, South Carolina increased its sales tax to 6%, putting it above the national median rate. However, South Carolina's new general sales tax rate does not apply to lodging (which is subject to a 7.0% rate); items subject to the $300 maximum excise tax; or the 3.0% sales and use tax imposed on purchases of unprepared food. Counties have the option to impose an addition 1.0% local option sales tax. The sales tax on goods in Charleston Country is currently at 7.5%
South Carolina’s gasoline tax stands at 16.8 cents per gallon and ranks 7th lowest nationally. South Carolina’s cigarette tax stands at 7 cents per pack of twenty and is the lowest in the nation.
South Carolina Business Tax
South Carolina's corporate tax structure consists of a simple flat tax of 5.0% on all corporate income. Among states levying corporate income taxes, South Carolina’s tax ranks the state 3rd lowest nationally. There is no local tax on corporate income.
To improve the business climate and attract new companies, the state has implemented several initiatives. One example is the Charleston Digital Corridor, a creative effort to attract, nurture and grow Charleston’s knowledge economy. This is accomplished through a combination of technology-enabled initiatives and business incentives, private business support and member-driven programming. With the goal of offering tangible resources to the business community, the Charleston Digital Corridor serves as a portal to government, infrastructure, real estate, education, venture capital, professional resources and a trained workforce.
ADDITIONAL FINANCIAL INFORMATION FOR SOUTH CAROLINA
South Carolina Sales Taxes
State Sales Tax: 5% (prescription drugs exempt); 25 counties impose an additional 1% local option sales tax; two counties imposed a 2% sales tax. Seniors 85 and older pay 4%. Gasoline Tax: 16 cents/gallon Diesel Fuel Tax: 16 cents/gallon Gasohol Tax: 16 cents/gallon Cigarette Tax: 7 cents/pack of 20
South Carolina Personal Income Taxes
Tax Rate Range: Low - 2.5%; High - 7%
Income Brackets: ** Lowest - $2,460; Highest - $12,300
Number of Brackets: 6
Personal Exemptions: * Single - $3,050; Married - $6,100; Dependents - $3,050
Standard Deduction: Single - $4,750; Married filing jointly - $9,500
Medical/Dental Deduction: Federal amount
Federal Income Tax Deduction: None
Retirement Income Taxes: Retirement income is taxed. Social Security exempt. Under age 65, $3,000 in pension income is exempt. At 65, the deduction is $10,000. After 65, the deduction if $15,000 (single)/$30,000 (joint).
Retired Military Pay: Retirees with 20 or more years of active duty can deduct up to $3,000 annually until age 65 and up to $10,000 per year after age 65. This deduction extends to the surviving spouse. Pension or retirement income received for time served in the National Guard or Reserve components is not taxable. Survivor benefits are taxed following federal tax rules.
Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office..
South Carolina Property Taxes
Property tax is assessed and collected by local governments. Both real and personal property are subject to tax. The market value of a legal residence and up to 5 acres of surrounding land is assessed at 4%. For homeowners 65 and older, the state's homestead exemption allows the first $50,000 of their property's fair market value to be exempt from local property taxes. South Carolina imposes a casual excise tax of 5% on the fair market value of all motor vehicles, motorcycles, boats, motors and airplanes transferred between individuals.
South Carolina Inheritance and Estate Taxes
There is no inheritance tax and the estate tax is related to federal estate tax collection. For further information, visit the South Carolina Department of Revenue site or 800-763-1295. * State allows personal exemption or standard deductions as provided in the Internal Revenue Code.
