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 your state. This handout 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.
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 on your federal
return with few modifications. Your federal taxable income is the
starting point in determining your state income tax liability.
Deductions
There is no intangibles tax in South Carolina.
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.
Beginning with the first year you receive retirement income and
until you turn 65, you may take an annual deduction of up to
$3,000 from retirement income. The retirement deduction increases
to $10,000 at age 65. 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, all residents
are eligible for a deduction of up to $15,000 from income,
regardless of the source. This deduction must be offset by any
deduction claimed for retirement income.
Income received from National Guard or armed forces reserve pay
for the annual training period and weekend drill is exempt from
tax.
Disability income for 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 the care of a special needs child.
Interest you receive from federal obligations is deductible.
Credits
Income tax credits which may lower your South Carolina tax
liability are:
A tuition tax credit allows students or parents to take a 25%
credit of 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.
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
The individual income tax rates graduate from 2.5% on taxable
income up to $2,340 to a top rate of 7% on taxable income
exceeding $11,700 for 1999. To offset the effects of inflation,
individual income tax brackets are adjusted annually.
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 this.
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 your salary, pension or other income.
Estimated tax is paid in quarterly installments on April 15, June
15, September 15 and January 15.
Filing Returns
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.
You may file your South Carolina tax return in several ways:
(1) electronic filing; (2) Telefile, using your telephone; (3)
on-line filing over the Internet; and (4) traditional 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
governments provide.
Residential Property
The market value of a legal residence and up to five acres of
surrounding land is assessed at 4%. 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 costs.
Some examples of how this property tax relief benefits
taxpayers: Based most recent property tax rates, a $100,000 home
in the city of Greenville would be taxed at $1,186. With the
exemption, the homeowner would see a savings of $581, for a lower
tax bill of $605. In the city of Columbia, without property tax
relief, the tax on a $100,000 home would be $1,418. After tax
relief, the property tax is reduced to $867, a savings of $551.
The property tax relief will vary among school districts depending
upon the millage for school operating costs.
If you have established one-year residency and you are 65 or
older, you are eligible for a homestead exemption of $20,000. For
the same home in the city of Columbia calculated previously, the
homestead exemption would offer an additional savings of $173, for
a total tax of $694 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, trucks,
motorcycles, recreational vehicles, boats and airplanes, based on
their fair market value. If you own a $10,000 car, based on the
average millage rate, your personal property tax would be $268.
For information about personal property tax on motor vehicles,
call the auditor=s
office in the county where you plan to live.
Sales and Use
Tax
South Carolina=s
sales and use tax rate is 5%. In certain counties, a local option
sales and use tax of 1% is imposed in addition to the 5% state
rate. Counties and cities also may impose local sales taxes for
road improvements, capital projects, schools 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 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 (plus any local taxes, if
applicable) in South Carolina. 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 of 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 this 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 $5
and the registration fee is $24 every two years for a passenger
vehicle. Persons 65 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 Division of Motor Vehicles of
the Department of Public Safety.
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 should visit
one of the Division of Motor Vehicles branch offices to obtain a
South Carolina driver's
license.
A driver's license is
$12.50 and is renewable every five years on your birthday. A
beginner's permit may be
obtained at age 15. Applicants must pass a vision test and a
written test on driving skills. The fee is $2 for the written
test. The beginner's
permit is $2.50 and is good for one year.
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.
Visit the SCDOR
website on the Internet for information regarding all major South
Carolina taxes, policy rulings and other helpful tax information. www.sctax.org
Important
Telephone Numbers
|
Business Registration
(803) 898-5872
Estimated Tax
(803) 898-5709
Estate Tax
(803) 898-5756
Forms
(800) 768-3676
Columbia area
(803)
898-5599
Individual Income Tax
(803) 898-5709
Motor Vehicles
(803) 737-1767
Publications
(803) 898-5419
Sales Tax
(803) 898-5788
Tax Helpline
(800) 763-1295
Columbia area
(803) 898-5280
TDD
(803) 898-5656
Withholding
(803) 898-5752
|
Department of Revenue
Taxpayer Service Centers
