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South Carolina Tax Guide: Retirement-Friendly Rates

Learn about South Carolina's declining income tax rates, generous retirement exemptions, and tax details for 2025.

6.2%
Top Income Tax Rate
7.43%
Combined Sales Tax
0.56%
Property Tax Rate
#36
Tax Burden Rank

Tax Overview

South Carolina has a progressive income tax system with a top rate that has been declining from 6.5% toward a target of 6.2% in 2025, with further reductions planned. The state uses six brackets, but the structure effectively means that most of the tax burden falls within a narrow band around the top rate for earners above about $16,000. South Carolina has been actively working to reduce its top rate to remain competitive.

Sales tax in South Carolina is 6% at the state level with local additions that push the combined rate to about 7.43% on average. South Carolina caps the sales tax on vehicles at $500, regardless of purchase price, which is a significant benefit for car buyers. Groceries are exempt from the state sales tax but may be subject to local taxes at reduced rates.

South Carolina is particularly attractive for retirees. The state exempts Social Security benefits from taxation, offers a retirement income deduction of up to $10,000 per person, and provides additional deductions for those age 65 and older. Property taxes are moderate at about 0.56%, and the state offers a homestead exemption of $50,000 off the fair market value for residents age 65 and older, legally blind, or permanently disabled.

Income Tax

South Carolina is reducing its top rate, targeting further decreases in coming years. The state is very retirement-friendly with generous income exemptions.

Income RangeTax Rate
$0 – $3,4600%
$3,461 – $6,9203%
$6,921 – $10,3804%
$10,381 – $13,8405%
$13,841 – $17,3006%
$17,301 +6.2%

Sales Tax

State Rate6.00%
Avg. Local Rate1.43%
Combined Rate7.43%

Property Tax

Effective Rate0.56%
Median Annual Bill$1,024

Key Deductions in South Carolina

  • ✓Full Social Security income exemption
  • ✓Retirement income deduction (up to $10,000 per person)
  • ✓Additional deduction for age 65+ (up to $15,000)
  • ✓Homestead exemption ($50,000 off value for 65+/disabled)
  • ✓Two-wage earner credit for married couples both working
  • ✓SC 529 plan contribution deduction (full amount deductible)

Filing Information

Filing Deadline: April 15

Tax Authority: South Carolina Department of Revenue

Phone: (803) 898-5709

Website: https://dor.sc.gov

Frequently Asked Questions

Is South Carolina good for retirees?
Yes, South Carolina is one of the most retirement-friendly states. Social Security is fully exempt, there is a $10,000 retirement income deduction per person, residents 65+ get an additional deduction, property taxes are low, and the $50,000 homestead exemption provides further relief.
How does the vehicle sales tax cap work?
South Carolina caps the sales tax on motor vehicles, boats, and aircraft at $500, regardless of the purchase price. This means buying a $50,000 car only incurs $500 in state sales tax, not the $3,000+ that the full rate would produce.
Are groceries taxed in South Carolina?
Groceries are exempt from the 6% state sales tax in South Carolina. Local taxes may still apply to grocery purchases, but typically at reduced rates, resulting in minimal tax on food for home consumption.
Is South Carolina reducing its income tax rate?
Yes, South Carolina has been phasing down its top income tax rate. The rate has dropped from 7% to 6.2% in recent years, with legislation targeting further reductions contingent on revenue growth.

Neighboring State Guides

North CarolinaGeorgia

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