LOCAL TAXES: In South Carolina, counties are authorized to levy property taxes on taxable real estate and personal property. In order to ensure standardized assessment of all industrial plants, the South Carolina Tax Commission assesses all such plants at 10.5% of the appraised value. Neither the city nor the county in which the plant is located can change the assessment established by the Commission. Each county sets its millage rate and to this rate is added the rate set by the local municipality or special service district to arrive at the total millage rate.

INVENTORY TAXES AND FLOOR TAXES: South Carolina has no manufacturer's inventory taxes. All inventories including raw materials, goods-in-process, and finished goods are exempt from taxation, provided they are not offered or available for sale at retail. In addition, a manufacturer's inventory, whether produced in South Carolina or not, can be stored and warehoused in South Carolina and not be subject to inventory taxes.

All merchant's inventory is assessed at 6%. This is then multiplied by the local millage rate to obtain the yearly floor tax. The only exception is a merchant operating a warehouse who would qualify for an exemption under a "no-situs" law. All equipment of merchants is assessed at 10.5%.

SOUTH CAROLINA TAXES: Tax rates and tax policies applied to industry in South Carolina are liberal. South Carolina has a "no-situs" law exempting all inventory taxes on goods from warehouse moving in interstate commerce. These goods may be assembled, bound, joined, processes, disassembled, divided, cut, broken in bulk, labeled, or repackaged and still be entitled to exemption from inventory taxes. There is no time limit on how long such goods may be warehoused.

"No-situs" is but one example of how the state's taxation policy has helped make South Carolina one of the most desirable locations for new business. For instance, the state has abolished the intangible tax and the property tax. There is no wholesale state tax.

CORPORATE INCOME TAX: The tax levied on domestic and foreign corporations is 6% of net taxable income, but foreign corporations are taxed only on the income earned or derived within the state. The portion of income to be taxed is usually computed by taking the arithmetic average of the three ratios:

(a) the value of in-state real estate and tangible personal property to the value of the firm's entire real estate and tangible personal property holdings; (b) in-state payrolls to total payrolls; and (c) in-state sales to total company sales.

A company may also use separate bookkeeping if the method used reflects the true earnings of the firm's South Carolina operations.

In using the total payroll of a company, the salaries or compensation of officers with company-wide authority are omitted in the numerator and denominator of the ratio.

CORPORATION LICENSE FEES: Both foreign and domestic corporations must pay annual license fees to the South Carolina Tax Commission on or before the 15th day of the third month after the preceding year at a rate of 1 mil upon each dollar of a proportion of its total paid-in capital and paid-in surplus. Earned surplus is not included in the base in the calculation of this tax. The proportion is determined in the same manner as employed in computation of the State Income Tax.

DOCUMENTARY STAMP TAX: On the issuance of capital stock, the tax is ten cents for each $100,000 of face value. If within face value, the tax is one cent for each $10.00 up to $100.00 actual value, and ten cents per $100.00 thereafter.

RETAIL SALES TAX: South Carolina levies a five percent retail sales tax. Exemptions from the tax include production machinery, repair parts, industrial electricity and materials which will become an integral part of the finished product of a manufacturer. Also, any items which change the physical or chemical characteristics of a finished product are exempt. The entire proceeds of this tax are pledged to the construction and operation of South Carolina's public schools. Charleston County adds an additional 1% Sales Tax.

PERSONAL INCOME TAXES: There are no municipal income taxes. A state income tax is imposed upon every individual residing in South Carolina. The tax levied, collected and paid annually with respect to net income of the taxpayer and income earned within the jurisdiction of the state of every non-resident having a business and/or agency in the state from the sale or rental, or income from property within the state, is compounded at the following rates:

• On the excess over the amount legally exempted up to $2,070: 2.5%
• On the excess above $2,070 and up to $4,140: 3.0%
• On the excess above $4,140 and up to $6,210: 4.0%
• On the excess above $6,210 and up to $8,280: 5.0%
• On the excess above $8,280 and up to $10,350: 6.0%
• On the excess above $10,350: 7.0%

Personal exemptions are $800.00 per person. Deductions are permitted for the same items by the Federal Government, except the deduction for state income tax paid. However, a deduction for up to $500.00 per taxpayer for federal income tax paid is allowed. For those persons over 65, South Carolina allows a $12,000 homestead exemption except Berkeley County, which allows an exemption of $12,500. On a $45,000 home, for example, taxes would be assessed as though fair market value were $33,000 or $32,500. This exemption is applicable to any person who has been classified as totally and permanently disabled.

Individuals contemplating purchase of property should contact the proper taxing officials. This will insure that you obtain the most current information relating to your taxes.

ORGANIZATION AND QUALIFICATION FEES: This tax is paid only once by corporations qualifying to do business in the state. The rate is 40 mils per each $1000.00 of the aggregate value of authorized shares, with a minimum fee of $40.00 and a maximum fee of $1,000.00. (No-par shares are assigned a value of $10.00 for the purpose of fee computation.)