January 13, 2015

South Carolina

State & Local Taxes in 2015


South Carolina Tax Code Features

Progressive Features

• Provides an income tax credit for child and dependent care expenses

• Sales tax base excludes groceries

Regressive Features

• Provides an income tax deduction equal to 44 percent of capital gains income

• Fails to provide refundable income tax credits to offset sales, excise, and property taxes

• Fails to use combined reporting as part of its corporate income tax

Tax Changes Enacted in 2013 & 2014

• Decoupled from federal tax code provision that limits itemized deductions for upper-income taxpayers

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, South Carolina has the 40th most unfair state and local tax system in the country. States with regressive tax structures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Appendix B for state-by-state rankings and more details).

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