Best Tax Lawyers in South Carolina

About Tax Law in South Carolina, United States

Tax law in South Carolina covers the rules and regulations governing how individuals, businesses, and organizations are taxed by the state and local governments. This includes state income tax, property tax, sales and use tax, corporate taxes, and other local taxes. The state tax code works in conjunction with federal tax laws, with the South Carolina Department of Revenue (SCDOR) being the primary agency for tax administration and enforcement in the state. Following proper tax rules is crucial to avoid penalties or legal consequences.

Why You May Need a Lawyer

Navigating tax law in South Carolina can be complex, especially with constantly changing regulations and the interplay between federal and state requirements. Common situations where legal assistance can be helpful include:

• Facing an audit by the South Carolina Department of Revenue or the IRS
• Disputes over tax assessments, liens, or property tax bills
• Owing back taxes or being subject to collection actions
• Forming, selling, or dissolving a business
• Understanding your obligations while working remotely or moving in or out of state
• Structuring investments or estates to be tax efficient
• Dealing with penalties or allegations of tax fraud or evasion
• Seeking tax exemptions or incentives, such as for non-profits or new businesses
• Preparing for complex tax returns or legal compliance for high-value estates or trusts

Local Laws Overview

South Carolina's tax system includes several key state and local components:

• State income tax: South Carolina has a graduated state income tax with rates ranging from 0 percent to 6.5 percent. Residents and part-year residents are subject to tax on income earned within and outside the state, while non-residents are taxed on South Carolina-sourced income only.
• Sales and use tax: The state imposes a 6 percent sales tax on most retail sales, with some localities adding additional sales taxes. Use tax applies to goods purchased out of state but used in South Carolina.
• Property tax: Real estate taxes are assessed at the county level, with differing rates for primary residences, commercial properties, and vehicles. Legal disputes often arise over assessments and exemptions.
• Corporate tax: Corporations pay a flat corporate income tax rate of 5 percent. Special rules apply for S-corporations, LLCs, and partnerships.
• Other taxes: The state collects taxes on necessities like motor fuel, tobacco, insurance premiums, and more. Some cities and counties may have additional levies.

South Carolina also offers a range of credits, deductions, and exemptions that can affect your tax burden, such as homestead exemptions, manufacturing credits, or disaster-related relief.

Frequently Asked Questions

What is the income tax rate in South Carolina?

South Carolina has a progressive income tax rate ranging from 0 percent up to 6.5 percent, depending on your taxable income level.

How do I file my state taxes in South Carolina?

You can file electronically using the SCDOR MyDORWAY portal, through approved third-party software, or by mailing paper forms. Most individuals use form SC1040.

Do retirees have to pay tax on Social Security or retirement income?

South Carolina does not tax Social Security benefits. The state offers partial exemptions for certain types of retirement income, including distributions from pensions and IRAs, subject to eligibility criteria.

How is property tax calculated?

Property tax is based on the assessed value of your property multiplied by a local millage rate. The residence assessment ratio is usually 4 percent, while commercial and rental properties are at 6 percent.

What should I do if I disagree with an SCDOR tax bill?

You have the right to protest and appeal SCDOR tax assessments, usually within 90 days by submitting a written protest that outlines your reasons and supporting documents.

Are there any sales tax holidays in South Carolina?

Yes, South Carolina generally offers an annual sales tax holiday in August for certain school-related items, such as clothing and computers.

Does South Carolina have an inheritance or estate tax?

No, South Carolina does not impose a state inheritance or estate tax, but federal estate taxes may still apply.

What is the deadline to file state taxes?

The deadline for state individual income tax returns is usually April 15, matching the federal tax deadline. Extensions may be available but do not extend the time to pay any taxes due.

How do I get a tax ID or register a business for state taxes?

You can register your business online through the SCDOR MyDORWAY portal, which will help you obtain the necessary tax identification numbers and accounts for income, sales, and employer taxes.

What are the consequences of not paying state taxes?

Failing to pay state taxes can result in penalties, interest, tax liens, wage garnishments, and in severe cases, criminal charges. It is important to seek help if you are unable to pay.

Additional Resources

• South Carolina Department of Revenue (SCDOR): Main agency for tax administration, forms, and compliance.
• IRS Taxpayer Assistance Centers: Federal tax help in various cities across South Carolina.
• South Carolina Bar Association: Referrals to qualified tax attorneys.
• Local county assessor’s offices: Property tax assessments, disputes, and exemptions.
• Volunteer Income Tax Assistance (VITA) programs: Free tax preparation help for qualified individuals.
• Legal Aid organizations: Assistance for individuals with low incomes needing help with tax issues.

Next Steps

If you need legal advice or help with a tax matter in South Carolina, consider the following steps:

• Gather all relevant documents, such as tax notices, correspondence, past returns, and financial records.
• Clearly identify your concerns, whether it is a tax bill, audit, business tax setup, or other issue.
• Contact a qualified South Carolina tax attorney or a professional tax preparer for a consultation.
• Explore mediation or administrative appeals if available through state or local tax agencies.
• Do not ignore tax issues, as delays can make penalties and interest worse. Taking action early offers the most options.

Understanding your rights and obligations under South Carolina tax law can help prevent problems before they arise. Working with an experienced legal professional can protect your financial interests and ensure compliance with state and federal tax requirements.