South Carolina is not a tax-free state. You will pay state income tax on your wages, a 6 percent state sales tax on most purchases, and county property tax on anything you own. What South Carolina does offer is a lighter overall burden than most of its neighbors, no estate or inheritance tax, and unusually generous breaks for retirees and military veterans.
State Income Tax
South Carolina uses a graduated income tax that starts from your federal taxable income. For tax year 2025 the top marginal rate is 6 percent, down from 7 percent a few years earlier.1South Carolina Department of Revenue. Individual Income Tax
A pending bill, House Bill 4216, would replace the graduated brackets with a two-bracket system starting after 2025: 1.99 percent on the first $30,000 of taxable income and 5.21 percent above that.2South Carolina Legislature. 2025-2026 Bill 4216 – Income Tax The bill passed the Senate in February 2026 with amendments and was returned to the House. It has not been signed into law.
If H4216 is enacted, South Carolina would stop following the federal standard deduction and adopt its own South Carolina Income Adjusted Deduction: $15,000 for single or married filing separately, $22,500 for head of household, and $30,000 for married filing jointly or a surviving spouse. These amounts phase down as federal adjusted gross income rises.2South Carolina Legislature. 2025-2026 Bill 4216 – Income Tax
Returns are due April 15. File late and the penalty is 5 percent of the tax owed per month, capped at 25 percent. Pay late and a separate 0.5 percent monthly penalty applies to the unpaid balance, also capped at 25 percent.3South Carolina Legislature. South Carolina Code Title 12 Chapter 54 Section 12-54-43 – Civil Penalties Interest runs from the original due date at a rate tied to the federal underpayment rate.4South Carolina Legislature. South Carolina Code Title 12 Chapter 54 Section 12-54-25 – Interest Due on Late Taxes
Social Security, Retirement, and Military Pay
This is where South Carolina gets close to tax-free for a lot of households.
Social Security benefits are fully exempt from state income tax. Any Social Security or railroad retirement income taxed federally is not taxed by South Carolina.5South Carolina Department of Revenue. Retirees – Lower Your Individual Income Tax Bill With These Five Tips
On top of that, you can deduct qualifying retirement income such as pensions, 401(k) distributions, and IRA withdrawals. The deduction is up to $3,000 per year if you are under 65 and up to $10,000 per year if you are 65 or older.6South Carolina Department of Revenue. Individual Income Taxes – Chapter 3 It applies to the original owner of the account and is claimed on the SC1040.
Once you turn 65, a separate deduction shields up to $15,000 of any South Carolina income, not just retirement income, from state tax. You must reduce that $15,000 by any retirement income deduction or military retirement deduction you already took. If you claimed the $10,000 retirement deduction, for example, you have $5,000 of this allowance left for other income.5South Carolina Department of Revenue. Retirees – Lower Your Individual Income Tax Bill With These Five Tips
Military retirement pay is 100 percent exempt from South Carolina income tax at any age, with no earned-income cap. A surviving spouse receiving a deceased veteran’s military retirement income can claim the full deduction.7SC Department of Veterans’ Affairs. Claiming Military Retiree State Income Tax Exemption in SC5South Carolina Department of Revenue. Retirees – Lower Your Individual Income Tax Bill With These Five Tips
Sales Tax
The statewide sales tax rate is 6 percent on most tangible goods and certain services.8South Carolina Department of Revenue. Sales Tax Counties can add local sales taxes with voter approval, and the combined rate reaches 9 percent in some areas, including Berkeley, Charleston, Horry (Myrtle Beach), and Jasper counties.9South Carolina Department of Revenue. South Carolina Local Tax Designation by County
Unprepared food eligible for purchase with USDA food stamps is exempt from the 6 percent state sales tax when sold for home consumption. Local sales tax may still apply depending on the county’s ordinance. Prepared meals and restaurant food are fully taxable at both levels.10South Carolina Department of Revenue. Chapter 21 – Unprepared Food Exemption
South Carolina also holds a 72-hour sales tax holiday each August, usually starting at 12:01 a.m. on the first Friday of the month and running through Sunday. Clothing, footwear, school supplies, computers, printers, and certain bed and bath items are exempt from sales tax during the weekend. Books and musical instruments used for school assignments also qualify. Jewelry, cosmetics, eyewear, furniture, and cell phones do not.11South Carolina Department of Revenue. Tax Free Weekend
Property Tax
Counties collect property tax using assessment ratios set by state law. The ratio decides what fraction of a property’s fair market value is actually taxed, and it is low for your primary home.
Your legal residence, along with up to five contiguous acres, is assessed at 4 percent of fair market value. Other real property such as second homes, rentals, and vacant land is assessed at 6 percent. Manufacturing and utility property is assessed at 10.5 percent.12South Carolina Legislature. South Carolina Code Title 12 Chapter 43 Section 12-43-220 – Classifications and Assessment Ratios Standard personal vehicles are assessed at 6 percent; heavier vehicles above 9,000 pounds net or 11,000 pounds gross are assessed at 10.5 percent. Your county bills you annually based on the assessed value multiplied by the local millage rate.
If you are 65 or older, totally and permanently disabled, or legally blind, the Homestead Exemption removes the first $50,000 of your primary residence’s fair market value from all property taxes. Apply through your county auditor’s office.13South Carolina Department of Revenue. Exempt Property
Vehicle and Fuel Taxes
When you first title or register a vehicle in South Carolina, you owe a one-time Infrastructure Maintenance Fee of 5 percent of the purchase price or fair market value, capped at $500. It applies to dealer and private-party purchases alike, and the DMV will not issue a title or registration until it is paid.14South Carolina Legislature. South Carolina Code Title 56 Chapter 3 Section 56-3-627 – Infrastructure Maintenance Fee
The state motor fuel user fee is $0.28 per gallon of gasoline. Small environmental and inspection fees bring the total state charge to roughly $0.29 per gallon, with federal fuel tax on top.15South Carolina Department of Revenue. Motor Fuel
Estate and Inheritance Tax
South Carolina has no state estate tax and no inheritance tax. The state estate tax statute was tied to the federal state death tax credit, which federal law phased out, leaving a $0 state liability.16South Carolina Legislature. South Carolina Code of Laws Title 12 Chapter 16 If you inherit property or cash from a South Carolina resident, you owe no state tax on it. Federal estate tax still applies to estates above the federal exemption, which is $15 million per individual in 2026, or up to $30 million for a married couple using both spouses’ exemptions with proper planning.