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South Carolina Tax

Individual Income Tax Forms

Form SC1040 Individual Income Tax Return

Form SC1040X Amended Individual Income Tax Return

Corporate Income Tax Forms

Form SC1120 C Corporation Income Tax Return

Form SC1120S S Corporation Income Tax Return

Form SC1120 General Instruction

Sales Tax Forms

Exemption Form

Form ST-3 State Sales and Use Tax Return

Form ST-14 Claim For Refund For Sales Tax

Property Tax Forms

Form PT-100 Business Personal Property Return

Form PT-300 Property Return

Form PT-300A Manufacturing or Mining

Form PT-300B Non-Contiguous Manufacturing

Form PT-300D Corporate Headquarters Distribution Facility

Form PT-300E Leased Utility

Form PT-300F Leased Transportation for Hire

Form PT-300S Manufacturing Fee in Lieu of Tax

Form PT-300T Non-Manufacturing Fee in Lieu of Tax

Form PT-300X Improvement Schedule

Form PT-300Z Lease Schedule

Form PT-401 Application for Exemption

Primary Concerns:

Anyone who knows the history of South Carolina will recognize that the state is very passionate about doing things its own way, especially when it comes to its relationship with the federal government.  South Carolina, like many states throughout the country is suffering through a poor economic climate and as a result has suffered through a drastic economic shortfall.

However, while South Carolina has sought to deal with this problem, they have done so in ways that many would criticize are determined more by political ideology than by pragmatic problem solving.  And some other decisions could only be described as weird, such as the proposition in the state legislature that would ask that see the state currency uncoupled from the dollar to one based and minted strictly on gold and silver standard.

The chief decision initially based on ideology was the fact that South Carolina had initially refused federal stimulus money when its state was initially faced with severe budget shortfalls (state Governor Mark Sanford eventually relented and accepted federal aid).  The state has otherwise shown an overall resistance to government aid of any kind.

In response, the state has implemented harsh budget cuts.  Many of these were to be felt by the local court systems and medical programs, especially those related to disease prevention.  The biggest hit was to the state’s welfare system, which many criticized heavily in the face of South Carolina’s 11.6% unemployment rate, which is over 1.7% above the national average.

One pragmatic tact that has been hotly contested, even within the same political party, has been an increase on the cigarette tax from $0.07 a pack to $0.57, which is still well below the tax in most states.  The tax is still being contested as of early 2010, with it having been vetoed by Governor Sanford, though many feel that the legislature will override the veto in the next session.

The state has also given out tax credits to many companies to draw their business to South Carolina, which has already worked at getting Boeing to open up facilities in the state, which is seen as potentially creating needed jobs as well as corporate revenue.

It remains, however, that South Carolina was hit very hard by the recent economic crisis, and as a result, the road to recovery will not be easy.  But if there is a road out, South Carolinians will likely travel it the way they always do: in their own way.

Income Tax:

All individuals who reside in South Carolina full time, and earn income within South Carolina are required to file a South Carolina tax return.  Senior citizens who make less than $15,000 ($30,000 for couples filing jointly) and have no taxes withheld from their wages are exempt from having to file a state income tax return.

Part time residents are allowed to file as residents or nonresidents, depending on which is more advantageous to the taxpayer.

Income taxes in South Carolina are progressively taxed at a staggered rate over six brackets.  All income below $2,630 has a tax rate of 2.5%, and between $2,631 and $5,260 the rate is 3% on all excess above $2,631.  So if an individual makes $5,000 in income per year, then they will be charges 2.5% on the first $2,630 and then 3% on the subsequent $2,370.  Between $5,261 and $7,890 the tax rate is 4% of excess above $5,261.  The rate on excess between $7,891 and  $10,520 is 5%, and between $10,521 and $13,150 it is 6%.  Above $13,151 it is 7% of excess over the top base.

Corporate Income Tax:

Nearly all corporations who reside or do business in South Carolina are eligible to be taxed under state law, but the tax may be derived from different things.  Corporate tax returns are required to have three components: a computation of income tax liability, computation of license fees (unless the organization is tax exempt), and an annual report of Corporations, upon which are assessed the taxable value of the corporation.  Corporations which operate in many states, even if they are based in South Carolina, only has to pay sales tax on income derived in South Carolina.

Manufacturers or vendors of tangible personal products are taxed using an arithmetic average of property, payroll, and sales (which is always doubled).  Businesses that do not sell tangible material are charged a Gross Receipts Tax, which taxes the gross income of the business.

The corporate income tax, on all taxed values, is a flat 5%.  There is an annual corporate license tax equal to 0.001% of a businesses capital stock plus $15, with a minimal fee of $25.  The state also does not recognize federal bonus depreciation.

Property Tax:

Property taxes in South Carolina are collected on both the state and local level, though values are determined at the county level by the county assessor.  Both real and personal property is subject to property tax in South Carolina.

Amounts of taxes are determined on the county level, using a millage system, where 20 mills equals $20 per $1000.  Many mill rates levied are very high, but the assessment ratios on property are actually far below market or use value.

Primary residences are only assessed at 4% of market value, while secondary real estate is assessed at 6%.  Manufacturing property and utility property are assessed at 10.5% of market value.  Railroads, Airlines, automotive carriers, and pipelines are assessed at 9.5% of market value.  Agricultural properties are assessed by use value, privately owned property assessed at 4% and corporate owned assessed at 6%.

Personal Property is assessed at 10.5% of its depreciated value, meaning that it is priced on its resale value as is.

Sales Tax:

Sales taxes in South Carolina is 6%, and 7% specifically for lodging.  Many localities also add 1 to 2% extra sales tax, and many restaurants also charge and additional 1 to 2% sales tax.  The state no longer has a tax on unprepared food or prescription drugs.  There is also a cap on sales tax for cars of $300 dollars.

In order to ease the burden on the extremely aged, customers over 85 are also entitled to a 1% reduction in sales tax statewide.

South Carolina also has the lowest cigarette tax in the county of only $0.07 per pack (recent legislation, still being contested, plans to raise this to $0.57 per pack).

Tax Forms:

The South Carolina personal income tax form is called the SC1040, and it has many variations depending on the nature of the return itself, such as the SC1040ES for estimate taxes.

The regular corporate tax return is called the SC1120, and it also has a number of variations as well.


Introduction

Taxes are crucial to the development and growth of states, and South Carolina is no exception. The state is one of the few places in the country where taxpayers can receive a 2% discount for paying their tax bills on time. This has made taxation a very important process for both individuals and businesses in South Carolina. In this article, we will take a deep dive into the US tax system, specifically South Carolina taxes, and how they have evolved over the years.

History of Taxes in South Carolina

South Carolina started taxing its residents and businesses in 1915. At that time, the basic tax rate was set at 5%. However, over the years, the state has undergone various changes in its tax system, which has resulted in an increase in the number of tax categories and the tax rate. Between 1932 and 1938, the state raised the sales tax to 2% to help fill the revenue gap created by the Great Depression.

In 1967, the South Carolina legislature approved a sales tax increase from 2% to 3% to fund road construction projects. The sales tax was then increased in 1990 to 4.5%, again in 1995 to 5%, and finally to 6% in 2004.

Individual Income Tax

The South Carolina Individual Income tax is one of the critical taxes the state uses to meet its budgetary goals. The state income tax is based on a sliding scale, which ranges from 0% to 7% of a taxpayer’s income, depending on their earnings. The highest tax rate applies to those earning over $14,000 a year.

In 2017, South Carolina implemented a statewide tax reform that resulted in changes to the state’s individual income tax system. The new system inherited the previous six tax brackets, but with lower rates ranging from 0% to 7%.

A major feature of the tax reform was an increase in standard deductions. For single filers, the standard deduction was set at $4,170, and for taxpayers filing jointly, it was set at $8,340. Additionally, some retirees received a nod from the reform, with the measure increasing the state pension deduction from $3,000 to $10,000. This provision helped reduce the tax burden on retirees, a group of residents who depend on stable income.

Business Taxes

South Carolina’s business tax system comprises of various taxes, including corporate income tax, property tax, franchise tax, and sales tax.

Corporate Income Tax

The South Carolina corporate income tax is set at a flat rate of 5%. The tax applies to all businesses operating in the state, regardless of their size. However, corporations with taxable income of $100,000 or less pay a reduced tax rate of 2.5%. Tax exemptions are also available for small businesses that want to grow their operations within the state.

Franchise Tax

South Carolina assesses a franchise tax on all corporations that operate within the state. The base rate for franchise text in the state is $14 for every $1,000 of par value or a fraction of the capital stock that a company holds within the state. The maximum amount of franchise tax is $15,000 per corporation, but the tax rate can be waived if the company’s income is solely from dividends and interest.

Sales Tax

Retail sales within South Carolina are subject to a 6% sales tax rate. The state gives counties and municipalities the authority to impose an additional sales tax of up to 2%, resulting in a maximum sales tax of 8%. Some businesses, such as those that offer accommodation services, restaurants, bars, and telecommunications providers, have specific sales tax rules.

Property Tax

South Carolina assesses its property taxes based on a property’s fair market value. The property tax rate in the state ranges from 4% to 10%, with real estate being taxed at the highest rate. One unique feature of South Carolina’s property tax is that businesses can deduct a portion of the property taxes they pay from their state income tax.

Property owners in South Carolina may qualify for some property tax exemptions, including the homestead exemption, which allows homeowners to receive a reduced tax on their primary residence. Additionally, the state provides a number of agricultural property tax exemptions to farmers to encourage agriculture production.

Illegal Taxation

Illegal taxation is where the state taxes either goods or services not authorized by the state constitution. Every South Carolina citizen has heard of illegal taxes either from the staggering state gas tax or local taxes that are not authorized by law, usually referred to as “”stand by fees.”” The state constitution, by default, prohibits taxes from adminstration if the tax income serves other funds not authorized by law.

Tax Evasion and Fraud

South Carolina has laws that ensure taxpayers comply with the state’s tax code. Taxpayers who willfully fail to file tax returns and pay their owed taxes are subject to significant penalties and interest, including a 20% penalty on unpaid taxes, interest on underpayments, and criminal persecution.

The state has a dedicated unit, the South Carolina Department of Revenue’s Criminal Investigation Division, to investigate tax evasion and fraud. The unit works together with the state’s Attorney General’s office to prosecute offenders.

Conclusion

South Carolina offers a conducive tax environment for both residents and businesses, with its variety of tax categories. The state’s tax rates are relatively low compared to other states, and the tax levies provide sufficient revenue to meet the state’s budgetary goals. South Carolina’s tax system provides ample opportunities to qualify for tax exemptions, which reduces the tax burden on taxpayers. However, taxpayers need to be aware of the state’s tax laws to comply with them to avoid auditors and reduce their fees and fines.