What South Carolina Actually Taxes

South Carolina taxes income, sales, property, and specific goods — here's what you pay on

South Carolina has four main taxes that affect most people: income tax on wages and investment earnings, sales tax on purchases, property tax on real estate and vehicles, and excise taxes on fuel, alcohol, and tobacco. The state also taxes corporate income, but that applies to business owners, not employees. Understanding which tax applies to what helps you plan your budget and know what to expect when you file or make a purchase.

The amount you pay depends on your income level, where you live in the state, what you buy, and what you own. A purchase in one county may have a different total tax rate than the same purchase in another county because counties add their own sales tax on top of the state rate. This guide covers each tax type, how much the rates are, and what is and is not taxed.

Key Takeaways

• South Carolina income tax ranges from 0% to 7% depending on your income bracket, and you pay it on wages, interest, dividends, and retirement withdrawals.
• Sales tax is 6% statewide, but your county adds between 0.5% and 3%, so your total rate at checkout ranges from 6.5% to 9%.
• Property tax on homes and land is set by your county and typically ranges from 0.3% to 0.6% of the property's value each year.
• Vehicle property tax is based on the vehicle's age and value, and you pay it when you register or renew your registration.
• Excise taxes on gasoline, diesel, alcohol, and cigarettes are built into the price you pay at the pump or register.

Income tax rates and what counts as income

South Carolina's income tax is progressive, meaning the rate increases as your income rises. The state has seven tax brackets. If you earned $3,000 in 2024, you pay 0% on that income. If you earned $35,000, you pay 0% on the first $3,000, then 3% on the next $32,000. The rates climb to 4%, 5%, 6%, and finally 7% at the top bracket, which applies to income over $15,000 (these thresholds adjust slightly each year for inflation).

Income tax applies to wages from your job, self-employment income if you own a business, interest earned in savings accounts, dividends from stocks, capital gains when you sell an investment at a profit, and withdrawals from retirement accounts like traditional IRAs and 401(k)s. It does not apply to Social Security benefits, Roth IRA withdrawals (if you follow the rules), or money you inherit.

You pay income tax through withholding if you are an employee — your employer deducts it from your paycheck. If you are self-employed or have income that is not withheld, you may need to make quarterly estimated tax payments. You file your return with the South Carolina Department of Revenue, usually by April 15 each year, to report all income and claim deductions or credits you are may have access to to.

Sales tax on purchases

The state sales tax rate is 6%, but your actual rate depends on your county. Each county adds between 0.5% and 3% on top of the state rate, so your total sales tax at checkout ranges from 6.5% to 9%. For example, if you buy something for $100 in Richland County (which adds 2%), you pay $108 in sales tax. The same item in Beaufort County (which adds 3%) costs $109.

Sales tax applies to most goods you buy in stores and online — clothing, groceries, electronics, furniture, and more. Some items are exempt: unprepared food (like raw vegetables and meat), prescription medications, and certain medical equipment do not have sales tax. Prepared food, restaurant meals, and fast food are taxed. Services like haircuts, car repairs, and plumbing are generally not taxed, though some specific services have their own rules.

When you buy something online from a seller outside South Carolina, you may not see sales tax at checkout, but South Carolina law requires you to pay use tax on that purchase — it is the same rate as sales tax and covers items you bring into the state or have delivered here. Most people do not pay use tax voluntarily; it is meant to be reported on your income tax return if you owe it, though enforcement is limited.

Property tax on homes and land

Property tax is set by your county and applies to the value of real estate you own. The rate varies significantly by county — some charge as little as 0.3% of the property's value per year, while others charge 0.6% or more. A home worth $300,000 in a county with a 0.4% rate costs $1,200 per year in property tax. The same home in a county with a 0.6% rate costs $1,800.

Your county assessor determines the value of your property, usually by looking at recent sales of similar homes in your area. You receive a notice of assessment, and you have the right to challenge it if you believe the value is too high. Property tax bills are sent to you annually or semi-annually, depending on your county. If you own the home with a mortgage, your lender may require you to pay property tax through an escrow account as part of your monthly payment.

Homeowners may be may have access to to a homestead exemption, which reduces the taxable value of your primary residence. The exemption amount varies by county but typically ranges from $50,000 to $100,000 of your home's value. You must file for the exemption with your county assessor's office, usually in the year you purchase the home or move to a new county. If you may have access to, your property tax bill drops accordingly.

Vehicle property tax and registration fees

When you register a vehicle in South Carolina, you pay property tax based on the vehicle's age and value. The tax rate is 6% of the vehicle's assessed value, but the value decreases each year — a new car is assessed at 100% of its value, but by year five it is assessed at 60%, and by year seven it drops to 40%. This means your tax bill goes down as the car ages, even if you do not pay off the loan.

You pay this tax when you register the vehicle for the first time and again each time you renew your registration, which is typically every two years. The amount is calculated by the Department of Motor Vehicles based on the vehicle's make, model, and year. If you buy a used car from a private seller, you will pay tax on the purchase price when you register it. If you buy from a dealer, the dealer may handle the registration and tax payment as part of the sale.

You also pay a registration fee separate from the property tax — this fee covers the cost of issuing your license plate and registration documents. The fee is typically $30 to $50 depending on the vehicle type. If your vehicle is financed, your lender may require you to maintain comprehensive and collision insurance, and proof of insurance is required to register the vehicle.

Excise taxes on fuel, alcohol, and tobacco

South Carolina taxes gasoline and diesel fuel through an excise tax built into the price you pay at the pump. The state excise tax on gasoline is 16.75 cents per gallon, and on diesel it is 16.75 cents per gallon as well. The federal government adds another 18.4 cents per gallon on gasoline and 24.4 cents on diesel. These taxes fund road maintenance and transportation projects, and they fluctuate slightly if the state legislature changes the rate.

Alcohol is taxed at different rates depending on the type. Beer is taxed at 16 cents per gallon, wine at $1.50 per gallon, and liquor (spirits) at $12.80 per gallon. These taxes are included in the price you pay at a store or bar. Cigarettes are taxed at 7 cents per pack, and other tobacco products like cigars and chewing tobacco have their own excise taxes. These taxes are meant to discourage consumption and fund public health programs.

You do not see these excise taxes as a separate line item on your receipt — they are already built into the price. However, they add up over time, especially for fuel. If you drive 12,000 miles per year in a car that gets 25 miles per gallon, you buy about 480 gallons of gas annually, which means you pay roughly $80 per year in state excise tax on fuel alone, plus federal tax on top of that.

Corporate income tax and other business taxes

South Carolina taxes corporate income at a flat rate of 5% on net income earned by businesses. If you are an employee, you do not pay this tax — your employer does. If you own a business structured as a corporation, you pay corporate income tax on profits after expenses. Businesses structured as sole proprietorships, partnerships, or S-corporations report business income on the owner's personal income tax return instead.

The state also taxes certain specific activities: banks pay a tax on net income, insurance companies pay a premium tax, and utilities pay a tax on gross revenues. These are specialized taxes that apply only to those industries. If you own a small business, you may also owe self-employment tax to the federal government (Social Security and Medicare), which is separate from South Carolina income tax.

What is not taxed in South Carolina

Several categories of income and purchases are not subject to South Carolina tax. Social Security benefits are not taxed by the state, and military retirement pay is exempt from state income tax. Roth IRA withdrawals are not taxed if you follow the withdrawal rules. Inheritances and gifts are not taxed. Unprepared food, prescription medications, and medical equipment are not subject to sales tax.

Some services are also exempt: medical services, dental services, and veterinary services are not taxed. Educational services provided by schools and colleges are not taxed. Religious organizations are exempt from property tax on buildings used for worship. If you are a veteran, you may be may have access to to a property tax exemption on your primary residence, though the amount varies by county and you must file for it.

Frequently Asked Questions

Do I have to pay South Carolina income tax if I work for a company in another state?

If you live in South Carolina and work for a company based elsewhere, you still owe South Carolina income tax on your wages. If you live in another state but work for a South Carolina company, you owe tax to your home state, not South Carolina. The state where you live has the primary claim on your income tax.

What is the difference between sales tax and use tax?

Sales tax is charged when you buy something in a store or from a seller in South Carolina. Use tax is charged on items you buy outside the state and bring into South Carolina, or items shipped to you from out of state. Both are the same rate, and use tax is meant to prevent people from avoiding sales tax by shopping out of state.

Can I deduct my property tax from my federal income tax?

Yes, you can deduct state and local property taxes (including property tax on your home and vehicle) from your federal income tax if you itemize deductions. However, there is a cap: you can deduct up to $10,000 in total state and local taxes (SALT) per year. Many people find that the standard deduction is larger than their itemized deductions, so they do not benefit from this deduction.

Do I pay sales tax on groceries in South Carolina?

No, unprepared food like raw vegetables, meat, dairy, and bread is not subject to sales tax in South Carolina. However, prepared food — anything ready to eat, like deli items, hot food, or restaurant meals — is taxed at the full sales tax rate for your county.

How do I know what my county's sales tax rate is?

Your county's total sales tax rate (state plus county) is listed on the South Carolina Department of Revenue website. You can also call your county tax assessor's office or check your receipt from a recent purchase — the sales tax amount is usually shown separately. Rates do not change often, but they can be updated if your county passes a new tax ordinance.