Taxes in South Carolina are not high by national standards. The top individual income tax rate sits at roughly 6 percent for 2026, the average effective property tax rate runs about half the national average, Social Security benefits and inherited estates are not taxed at the state level, and vehicle sales tax is capped at $500. The catches worth knowing: local sales tax add-ons can push the register rate to 9 percent in some counties, and every vehicle you own gets a property tax bill each year.
What You Pay on Income
South Carolina starts with your federal taxable income, so the standard deduction or itemized deductions you claimed federally carry straight over.1South Carolina Department of Revenue. Individual Income Tax After the 2022 reform collapsed six brackets into a simpler structure, income below roughly $17,800 is taxed at 0 percent for 2026, and everything above that faces a top rate near 6 percent.2South Carolina Legislature. South Carolina Code 12-6-510 The top rate has been dropping a fraction each year, and brackets adjust for inflation.
Pending legislation could push rates lower still. H.4216, still moving through the legislature in early 2026, would set a 1.99 percent rate on the first $30,000 of taxable income and a rate near 5.2 percent above that, applying to tax years beginning after 2025 if enacted.3South Carolina Legislature. 2025-2026 Bill 4216 – Income Tax Until then, the current schedule controls.
One easy-to-miss benefit: if you sell stocks, real estate, or other assets held longer than a year, you can deduct 44 percent of your net long-term capital gain from South Carolina taxable income.4South Carolina Legislature. South Carolina Code 12-6-1150 That drops the effective state rate on long-term gains to roughly 3.4 percent. Short-term gains don’t qualify.
Retirees Do Especially Well Here
Social Security benefits are completely exempt from South Carolina income tax. No calculation, no separate credit; the exemption applies automatically when you file.5South Carolina Department of Revenue. Retirees – Lower Your Individual Income Tax Bill With These Five Tips
For pensions, annuities, and 401(k) distributions, the retirement income deduction under Section 12-6-1170 lets people under 65 deduct up to $3,000 per year of qualifying retirement income. At 65, the deduction rises to $10,000.6South Carolina Department of Revenue. Retirement Income Deduction – Applicability to COVID-Related Distributions From Retirement Plans Under the Federal CARES Act of 2020
A separate age-65 deduction of up to $15,000 also applies, against any type of South Carolina income, but you must subtract any retirement income deduction already claimed. So if you deducted $10,000 in retirement income, another $5,000 comes off under the age-65 deduction for $15,000 total. A married couple both 65 or older can reach $30,000 combined.5South Carolina Department of Revenue. Retirees – Lower Your Individual Income Tax Bill With These Five Tips
Military retirees get the strongest deal. Under the Workforce Enhancement and Military Recognition Act, military retirement pay is 100 percent exempt from state income tax regardless of age, with no earned-income cap, for tax years after 2021.7South Carolina Department of Veterans Affairs. Claiming Military Retiree State Income Tax Exemption in SC
South Carolina imposes no state estate tax and no inheritance tax, so wealth transfers to heirs happen without a state layer on top of any federal estate tax.
Property Tax Is Low, Especially on Your Primary Home
The state’s property tax setup gives permanent residents a real advantage. Under Section 12-43-220, your primary residence and up to five contiguous acres are assessed at 4 percent of fair market value. Second homes, rentals, and other real property are assessed at 6 percent.8South Carolina Legislature. South Carolina Code Title 12 – Taxation, Chapter 43 – Assessment of Property Taxes Same market value, very different bill.
You have to apply for the 4 percent classification through your county assessor before the first penalty date for that year’s payment. Skip the application and the county assesses at 6 percent by default. Once approved, the classification stays put until you move or sell.
Counties then multiply the assessed value by local millage rates that fund schools, municipal services, and infrastructure. The statewide average effective rate lands around 0.5 percent of market value, well under the national figure near 1 percent. Some counties with heavier millage run above that average, so the specific location matters.
Seniors, disabled residents, and legally blind residents qualify for the Homestead Exemption, which exempts the first $50,000 of a home’s fair market value from all property taxes, including school, county, and municipal millage.9South Carolina Legislature. South Carolina Code 12-37-250 – Homestead Exemption for Taxpayers Sixty-Five and Over or Those Totally and Permanently Disabled or Legally Blind Eligibility runs to anyone at least 65, totally and permanently disabled, or legally blind. A one-time application with the county office is required.
Sales Tax: Higher Than It Looks in Some Counties
The state sales tax rate is 6 percent on most tangible goods, built from a 5 percent base plus a 1 percent addition from 2007.10South Carolina Legislature. South Carolina Code Title 12 – Taxation, Chapter 36 – Sales and Use Tax Counties can layer on local option taxes approved by voter referendum, usually in 1 percent increments earmarked for schools or transportation. Total register rates run anywhere from 6 to 9 percent depending on where you shop.
Unprepared groceries are exempt from the 6 percent state tax, though the local portion may still apply in some counties.11South Carolina Department of Revenue. Chapter 21 – Unprepared Food Exemption The exemption covers items eligible for USDA food benefits. It does not cover restaurant meals, prepared food, or ready-to-eat deli items. Prescription medications and certain medical supplies are also exempt from state sales tax.
Buy something online or from out of state without sales tax collected, and you owe 6 percent use tax plus any local rate, reported on form UT-3.12South Carolina Department of Revenue. Use Tax Most large retailers handle this automatically, but smaller sellers and private sales don’t.
Vehicles: Cheap to Buy, Taxed Every Year
When you buy or first register a vehicle in South Carolina, you pay an Infrastructure Maintenance Fee of 5 percent of the purchase price, capped at $500 no matter what the vehicle cost.13South Carolina Legislature. South Carolina Code 56-3-627 – Infrastructure Maintenance Fee Buy a $60,000 truck, pay the same $500 as someone buying a $10,001 sedan. That cap alone can save thousands compared with states that apply an uncapped sales tax on cars.
After the purchase, though, every vehicle owes annual personal property tax to the county where you live, based on assessed value multiplied by local millage. You have to pay it each year to get your registration renewal and plate decals. This is the piece that catches many newcomers off guard.
At the pump, motor fuel tax totals 28.75 cents per gallon: a 28-cent motor fuel user fee plus a 0.75-cent environmental and inspection fee.14South Carolina Revenue and Fiscal Affairs Office. Estimating Motor Fuel Demand in South Carolina FY 2025-26 Rates climbed under a 2017 transportation funding law and have since leveled off, still below most East Coast states.
Filing Deadlines and the Grace Period Worth Knowing
South Carolina individual returns are due April 15, matching the federal deadline.15South Carolina Department of Revenue. Tax Season Opens January 26, 2026 File and pay electronically by May 1 and you avoid penalties and interest on the late payment. That two-week electronic-filer grace period isn’t widely advertised. Beyond May 1 you’ll want a formal extension, and remember an extension to file isn’t an extension to pay; interest still accrues on any balance owed after April 15.