As a new resident of the Greenville area, I am sure you’ll enjoy the beautiful downtown, numerous parks, lakes, restaurants, and friendly atmosphere. However, I can imagine the many questions you may have as you make Greenville your home. I have lived and worked the majority of my life in the Upstate as a child, adult, father, hourly and salary employee, small business owner, and of course TAXPAYER. So, I say welcome, new neighbor, and welcome, FELLOW TAXPAYER!
You will find that South Carolina has a very reasonable sales tax rate of 6%. You will also be delighted to learn that sales tax is not charged on unprepared food, so your trip to the grocery store can be less of a burden. For your vehicle, after registering at the DMV, you can simply wait for a property tax bill each year, pay online, and move on.
However, the challenge in your switch to the upstate may begin with income taxes, and, unfortunately, South Carolina is NOT one of the nine states that do not impose them.
The state income tax rate ranges from 0 to 7%, yet there are many credits available at the state level to minimize this burden. There are too many to list, yet there is at least one for almost everyone. For starters, teachers get a separate $275 deduction for classroom supplies, 44% of long-term capital gains are excluded from state income, and small business owners can benefit from something known as the Active Trade or Business Deduction, which can vary drastically depending on your income and entity structure. Those of you that have chosen to retire here will be happy to learn of the state deductions for being retirement age, on retirement income, and/or being in the military reserves. Although South Carolina can, and will, tax all of your income that you earned while being a resident, they are nice enough to give you a credit for any income taxes you paid to another state.
Good news! If you sold your principal residence to get here, the IRS has an exclusion for that … as long as you meet certain criteria of course.
Navigating the growth of your small business in South Carolina is not too terribly overwhelming, yet it is important to make sure you file and pay business personal property tax if required, and hospitality tax can be a little tricky depending on your business, and within which county or city you operate.
I am pleased to extend a warm welcome and happy to help you with your tax and small business needs.