Moving to South Carolina: A Tax Guide for New Residents
If you are considering a move to South Carolina or have been a resident here for years, you may have many
questions about the tax structure in this state. This brochure explains the major state and local taxes, such
as income, property and sales taxes, and a few other taxes with which you should be aware. For more specific
information, call or visit one of the South Carolina Department of Revenue offices listed in this publication
or visit the agency’s website at www.sctax.org.
Income Tax South Carolina has a simplified income tax structure which follows the federal income tax laws. South
Carolina accepts the adjustments, exemptions and deductions allowed in your federal return with few
modifications. You federal taxable income is the starting point in determining you state income tax liability.
Deductions
• You do not pay a capital gains tax in this state on property sold in another state. Federal rules
governing the exclusion of capital gains realized on the sale of a personal residence also apply in
South Carolina.
• A deduction is allowed for net capital gains held for two years or longer. The deduction is 44%
making the effective tax rate 3.9% as compared to the top rate of 7% on all other income. For tax
years beginning after 2000, the South Carolina holding period is the same as the federal.
• Beginning with the first year you receive qualified retirement income and until you turn 65, you may
take an annual deduction of up to $3,000. You may take this deduction for income received from
any qualified retirement plan, such as IRAs, government pension plans, Keough plans and
private sector pensions. If both spouses receive retirement income, each spouse is entitled to an
individual deduction. At age 65, retirees may take a deduction of up to $10,000 from retirement
income.
All residents at age 65 are eligible for a deduction of up to $15,000 from income, regardless of the
source. The $15,000 deduction must be offset by any other retirement deduction that is claimed. A
surviving spouse may continue to take a retirement deduction on behalf of the deceased
spouse. The $15,000 deduction does not pass along to the surviving spouse.
• Income received from National Guard or armed forces reserve pay for the customary annual
training period and weekend drill is exempt from tax.
• Disability income from a permanent and total disability is deductible.
• Social Security benefits are not taxed in South Carolina.
• A deduction is allowed for each child under the age of 6. The deduction is 100% of the federal
personal exemption, which is adjusted each year for inflation.
• A deduction is allowed for a special needs adopted child.
• Interest you receive from federal obligations is deductible.
Credits
Income tax credits which may lower your South Carolina liability are:
• A tuition tax credit allows a 25% credit for tuition paid to South Carolina public and private colleges.
The maximum credit is $850 per year for four-year schools and $350 per year for two-year schools.
The person who pays the tuition may take the credit. You must take at least 30 credit hours per
year to qualify for the tuition tax credit.
• A two-wage earner credit allows married couples to take a maximum credit of $210 if both spouses
work.
• You are allowed a maximum credit of $300 for payments made for nursing home care or
intermediate nursing care provided in the home for yourself or another individual
• A credit is allowed for income taxes paid to another state on income which is taxable in both
states.
• A child and dependent care credit allows you to claim 7% of your federal allowable expenses for
the care of a child or elderly person.
Additions to Income
• Certain items of income must be added back to your federal taxable income for South Carolina
purposes.
• Any out-of-state losses and interest income from obligations other than those in South Carolina, if
these items were subtracted on your federal return, must be added back to your taxable
income on the state return.
• The deduction on your federal return for state income tax paid must be added back to your
taxable income on your state income tax return, but it is offset by your state refund amount if you
claimed it as income on your federal return.
Tax Rates
Individual income tax rates range from 2.5% to a top rate of 7% on taxable income. Tax brackets are adjusted
annually for inflation.
Part-Year Residents
If you moved into 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 be a full-year resident, you claim all your
income as though you were a resident for the entire year and take a credit for taxes you paid in another state. If
you choose to be 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 best. You may need to complete the return both ways to
determine which is best.
Estimated Tax
Estimated tax is the method you use 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 enough tax is not being withheld from you salary, pension or other income.
Estimated tax is paid in quarterly installments on April 15, June 15, September 15 and January 15.
Filing Returns
Generally, you are required to file a South Carolina income tax return if you are required to file a federal
return, or if you have South Carolina tax withheld from your wages. Individual income tax returns are due April
15 of each year, but if you file your state return electronically, you have until May 1 to file without
incurring a penalty. The May 1 deadline dies not apply to federal income tax returns.
You may file your South Carolina tax return in several ways:
• Electronic filing using a professional tax preparer
• On-line filing over the Internet using available commercial software
• SCNetFile using the DOR website
• Paper returns
Property Tax
Counties, cities and school districts are authorized to impose ad valorem taxes on real and personal property.
The local government assesses and collects the property tax under the direction and assistance of the Department
of Revenue. Property tax dollars support public schools and the services local government provide.
Residential Property
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 first $100,000 in fair market value of a primary residence is exempt from school operating taxes.
Some examples of how this property tax relief benefits taxpayers: Based on current property tax rates, a
$100,000 home in the city of Greenville would be taxed at $1,177. With the exemption, the homeowner would see
a savings of $364, for a lower tax bill of $813. In the city of Columbia, without property relief, the tax on a
$100,000 home would be $1,546. After tax relief, theproperty tax is reduced to $938, a savings of $608.
If you have established a one-year residency and you are 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. For the same
home in the city of Greenville calculated previously, the homestead exemption would offer an additional savings
of $162, for a total tax of $651 on a $100,000 home.
The assessment ratio on a second home or vacation home is 6%. The 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.
Vehicle Property Taxes
Personal property tax is collected annually on cars, recreational vehicles, boats and airplanes, based on their
values set forth in Department of Revenue publications. If you own a car valued at $10,000, based on the
average millage rate, your personal property tax would be $274.
For information about personal property tax on cars, trucks, boats, RVs and airplanes, call the auditor’s office
in the county where you plan to live.
Five Percent Sales & Use Tax
South Carolina’s sales and use tax rate is 5%. In certain counties, a local option sales and use tax of 1 – 2% is
imposed in addition to the 5% state rate. Counties and cities also may impose local sales taxes for road
improvements, capital projects and other purposes. Most local taxes require voter approval.
Prescriptions, dental prosthetics and hearing aids are exempt from the sales tax. Those over 85 years of age
are exempt from 1% of the sales tax.
A maximum sales tax of $300 is imposed on the purchase of motor vehicles, including recreational
vehicles, boats, motorcycles and airplanes.
The Department of Revenue strongly enforces the use tax on purchases made out-of-state when no sales tax
has been paid. If you purchase goods from the Internet, mail-order catalogs, television shopping networks or
other out-of-state businesses and did not pay sales tax, you must report and pay 5% use tax (6% or 7% if you live
in a local option county) in South Carolina. The use tax can be reported on your SC1040 income tax return. All
45 states which have a sales tax also have and enforce the use tax in much the same way.
Motor Fuel Tax
Each gallon on gasoline and diesel fuel purchased in South Carolina is taxed at 16 cents. This tax is included
in the price per gallon of gasoline at the pump.
Vehicle Registration
You have 45 days after moving to South Carolina to register your vehicle in this state. If you live in the state
only part of the year and consider another state your home residence, you are still required to register your car
in this state if you will be living in South Carolina for 180 days or more. The title fee is $15 and the registration fee
is $24 every two years for a passenger vehicle. Drivers 65 years old or older pay a reduced registration fee of
$20 every two years. The fee is $22 every two years for 64 year-olds. Contact the nearest office of the
Department of Motor Vehicles for more information.
Driver’s License
If you move to South Carolina, your driver’s license from your former state is valid in South Carolina for 90 days.
Before the 90-day period expires, new residents must visit one of the Department of Motor Vehicles branch
offices to obtain a South Carolina driver’s license.
A driver’s license is $25 and is renewable every ten years on your birthday. Beginner’s permit applicants must be
15 years old and must pass a vision test and a written test on driving skills. The beginner’s permit fee is $2 for
the written test. The beginner’s permit is $2.50 and is valid for one year. Applicants must hold a beginner’s
permit for 180 days before they can apply for a driver’s license.
Estate Tax
South Carolina follows federal rules regarding the taxation of estates. The tax due is the amount claimed
as a state credit on the federal estate return. An estate left to the deceased person’s spouse is not subject to tax.
Important Telephone Numbers
Business Registration (803) 898-5872
Estimated Tax (803) 898-5709
Forms 1-800-768-3676
Individual Income Tax (803) 898-5709
Motor Vehicles (803) 737-1767
Sales Tax Help (803) 898-5788
Withholding (803) 898-5752
UpState Taxpayer Service Center
Greenville –
211 Century Drive
Ste 210-B
Greenville, SC 29607
(864) 241-1200
(864) 232-5008 (Fax)
Source: South Carolina Department of Revenue
Additional Information:
Obtaining a SC Driver's License -
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