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Research Areas

South Carolina

The Facts on South Carolina’s Tax Climate

Here are some basic facts on South Carolina’s tax system and how it compares to other states:

Tax Freedom Day Arrives on April 16 in South Carolina
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2008, South Carolina taxpayers had to work until April 16 to pay their total tax bill, ranking 33rd highest in the nation. That's a week earlier than national Tax Freedom Day (April 23). The Tax Freedom Days of neighboring states were: North Carolina, April 17 (ranked 27th) and Georgia, April 19 (ranked 23rd).

Tax Freedom Day has been projected using the most up-to-date economic and budget projections from official government agencies. However, Tax Foundation estimates of average state and local tax rates for 2008 will not be released until later this spring as we await more up-to-date data from various government agencies.
Full study of Tax Freedom Day, nationwide and in each state

South Carolina's State/Local Tax Burden near Average in 2007
Estimated at 10.7% of income, South Carolina’s state/local tax burden percentage ranks 26th highest nationally, near the national average of 11.0%. South Carolina taxpayers pay $3,520 per-capita for state and local taxes, and per capita income in the state is $32,790.
South Carolina's State and Local Tax Burden, 1970-Present

South Carolina's 2008 Business Tax Climate Ranks 26th
South Carolina ranks 26th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Georgia (20th) and North Carolina (40th).
50-State Comparison of Business Tax Climates (data only)
2008 State Business Tax Climate Index, Fifth Edition (full study)

South Carolina's Individual Income Tax System
South Carolina's personal income tax system features six income brackets with a top rate of 7% kicking in at a relatively low income level of $13,150. Among states levying personal income taxes, South Carolina's top rate of 7.0% is 12th highest nationally. In 2005, state individual income tax collections were $634 per person, which ranked 34th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita

South Carolina's Corporate Income Tax System
South Carolina's corporate tax structure consists of a flat tax of 5.0% on all corporate income. Among states levying corporate income taxes, South Carolina's tax ranks the state 41st highest nationally. In 2006, state-level corporate tax collections (excluding local taxes) were $68.67 per capita and ranked 44th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2008
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

South Carolina Levies Sales Tax above National Median; Lowest Cigarette Taxes in the Nation
South Carolina levies a 6% sales tax on transactions, which is above the national median of 5.4 percent. State and local governments combined collected $994 per capita in general sales taxes in 2005, which ranks 44th highest nationally. South Carolina's gasoline tax stands at 16.8 cents per gallon and ranks 4th lowest nationally.  South Carolina's cigarette tax stands at 7 cents per pack of twenty and is the lowest in the nation. The sales tax was adopted in 1951, the gasoline tax in 1922 and the cigarette tax in 1923.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita, Fiscal Year 2005

South Carolina Property Taxes: Comparatively Modest
South Carolina is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. South Carolina's localities collected $3,692,822,000 in property taxes in fiscal year 2004, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, South Carolina collected $11,597,000 in property taxes during FY 2004, making its combined state/local property taxes $3,704,419,000. That brings its per capita collection to $882, which ranks 33rd highest nationally.
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: South Carolina is a Beneficiary State
South Carolina taxpayers receive more federal funding per dollar of federal taxes paid than the average state. Per dollar of federal tax collected in 2005, South Carolina citizens received approximately $1.35 in the way of federal spending. This ranks the state 16th highest nationally and represents a slight rise from 1995, when South Carolina received $1.20 per dollar of taxes in federal spending, ranking it 18th highest nationally. Neighboring states and the amount of federal spending per dollar of federal taxes collected were: North Carolina ($1.08) and Georgia ($1.01).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

Articles from the Tax Foundation