In the prosperity of the late 1990's, South Carolinian legislators cut taxes at a rate to removed an estimated $714 million a year from the income and sales tax base, and another $450 million a year from the property tax base. The six-bracket personal income tax schedule ranges from 2% (on taxable income up to $2,400) to 7% (above $12,000). The corporate income tax rate is 5% (4.5% for banks, 6% for savings and loan associations). The state sales and use tax rate 5% sales tax; with allowable local add-ons up to 2%. Prescription drugs are exempted, and the list of other special exemptions runs about 10 pages in the tax code (but does not include food). The state imposes a full array of selective sales (excise) taxes, covering motor fuels, tobacco products, insurance premiums, public utilities, alcoholic beverages, amusements, and other specified items. South Carolina has no inheritance tax, and its estate tax is tied to the federal exemption for state death taxes, and is therefore set to be phased out in tandem with the phasing out of the federal estate tax credit by 2007 unless the state takes positive action to preserve an estate tax. South Carolina's revenue losses from the phasing out of its estate tax are estimated at -$12 million for 2002/03, -$24 million for 2003/04 and.-$48 million for 2006/07. Death and gift taxes accounted for 1.1% of state collections in 2002. Other state taxes include various license fees, stamp taxes and state property taxes. Most property taxes are collected by local governments, however. In addition to the property tax, municipalities and counties may impose business license fees, plus charges for such services as garbage collection and water supply. Particularly in the touristattraction coastal areas, there are some local option sales and accommodations taxes. Over 40% (41.8% in 2000) of total state and local revenues are collected by local governments.
The state collected $5.749 billion in taxes in 2002 (down over $666 million from 2001), of which 40.6% came from the general sales tax, 34% came from individual income taxes, 14.3% from selective sales taxes, 5.4% from license fees, and 3.8% from corporate income taxes. In 2003, South Carolina ranked 38th among the states in terms of combined state and local tax burden, which amounted to about 9% of income.
The following table from the US Census Bureau provides a summary of taxes collected by the state in 2002.
|Sales and gross receipts||3,157,804||768.85|
|General sales and gross receipts||2,335,170||568.56|
|Selective sales taxes||822,634||200.29|
|Other selective sales||76,008||18.51|
|Hunting and fishing||14,623||3.56|
|Motor vehicle operators||20,888||5.09|
|Occupation and business, NEC||100,087||24.37|
|Corporation net income||217,327||52.91|
|Death and gift||63,647||15.5|
|Documentary and stock transfer||33,804||8.23|