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South
Carolina has many things going for it: beautiful
beaches, inviting mountains, friendly people - and one
of the lowest per capita tax rates in the country, according
to the Bureau of the Census. The Palmetto State and
local governments constantly are working to ensure that
South Carolina's tax structure remains attractive to
people and businesses considering it as their new home.
Residents are affected by the following major state
and local taxes. Click here
for information on property and estate taxes.
Compare
the Pre Capita Tax Burden
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Consider
the tax advantage. Than add up the cost
of living savings. |
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The
Carolinas have consistently maintained some
of the lowest per capita tax rates on the
east coast. |
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| FL |
SC |
GA |
VA |
WV |
NC |
MA |
NJ |
NY |
DE |
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| Source:
Bureau
of the Census State |
Income
Tax
South
Carolina's income tax structure follows federal income
tax laws, allowing the same adjustments, exemptions
and deductions with only a few modifications. In fact,
the starting point for calculating your state tax liability
is your federal taxable income. Income tax rates begin
at 2.5 percent of taxable income, graduating to a maximum
of 7 percent on taxable income exceeding $11,550. The
individual income tax brackets are adjusted annually
to help offset the effects of inflation.
When comparing South Carolina's tax rates with other
states, it's important to look at each state's total
tax package, not just the tax rates. For example, some
states tax Social Security benefits. South Carolina
does not. In the first year you receive income from
a qualified retirement plan, such as a company pension,
401(K) or IRA, you may claim a retirement deduction.
For tax year 1998 and forward, taxpayers under age 65
may claim a deduction of up to $3,000 of qualified retirement
income taxed.
A South Carolina resident also becomes eligible at age
65 or older to claim a deduction against any source
of income. The maximum deduction allowed is $15,000.
However, this must be reduced by any other retirement
deduction claimed by the taxpayer, not including surviving
spouse retirement deduction amounts. (Special rules
apply to taxpayers who made an election on the retirement
deduction prior to 1998.
If you are separating from active duty in the Armed
Forces but wish to continue your military career at
the local level, National Guard and Reserve annual training
and weekend drill pay is not taxed in South Carolina.
In addition to these deductions and those normally allowed
on the federal return, the state allows the following
benefits:
Disability retirement income for a permanent and total
disability is deductible.
There is no intangibles tax in South Carolina. Intangibles
tax is collected in many states that do not have a general
personal income tax and is imposed on bank accounts,
interest, dividends, stocks, bonds and other assets.
You do not pay a tax in this state on property you sell
in another state. South Carolina has adopted the federal
provision allowing up to $500,000 (if married filing
jointly, otherwise the provision is $250,000) of the
gain from the sale of your home to be excluded from
tax.
A two-wage earner credit allows married couples to take
a maximum tax credit of $210 annually if both work.
Social Security income that is taxed on your federal
income tax return is deductible for South Carolina purposes.
A credit is allowed for income taxes paid to another
state on income that is taxable in both states.
You receive an additional state income tax credit for
child care or elderly care expenses.
South Carolina allows a credit of up to $300 annually
for nursing care in-home or in a licensed institution.
Parents may claim an additional deduction equal to the
amount of the federal personal exemption ($2,700 for
1998, but adjusted annually) for each child under the
age of 6. Click
here for information on property and estate taxes.
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