Sales & Use Tax Blog

South Carolina sales taxes are embraced by local counties

South Carolina sales taxes are embedded in the very fabric of the communities it helps to serve, with all but three counties imposing sales taxes above the standard six percent collected by the state. Considering that the local sales taxes are around three percent, not including the two percent that gets collected for things like prepared meals, beverages, and hotel stays; it is easy to see why South Carolina sales taxes are 17th in the nation’s rankings for the highest combined state and local sales tax rate.

The steady increase in state and local sales taxes began with a contested three percent statewide sales tax that was implemented in 1951 and currently stands at six percent today. This opened the door for local sales taxes to be imposed, which started at the county level as a local option for road and school improvements along with property tax relief. What you end up with is a general sales tax rate that falls between seven and eight percent for most counties.

One major downside is that South Carolina sales taxes are sensitive to hard economic conditions, which decrease revenue, creating budget gaps that need to be filled during an already difficult time. There is also a concern that the tax affects the working poor and senior citizens the most as the cost for purchasing items increases.

But for taxpayers, this looks to be a viable solution to increase funding since voter referendums are the primary way to get local sales taxes approved. The alternative options being an increase in property taxes or less funding for already overcrowded schools and damaged roads. Business and real estate groups are some of the more prominent advocates of sales tax increases as this helps alleviate the need to increase property taxes which makes owning real estate more costly. Many of the South Carolina sales taxes start off limited in scope and have expiration dates, but once they come up for renewal they are frequently re-approved by an overwhelming majority of voters, often at a higher rate than originally implemented in an effort to support continuous and necessary funding.

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