Taxes in Columbia
South Carolina's real, current income tax structure (Act 110, effective tax year 2026) is genuinely distinct from every other state profiled in this project: not a no-income-tax state like Texas, Tennessee, or Florida, and not a single flat rate like Colorado's 4.4% or Arizona's 2.5%, but a real two-bracket system -- 1.99% on the first $30,000 of taxable income, 5.21% above that -- alongside a genuinely complex Columbia combined sales tax rate of 8% and no state estate or inheritance tax.
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Learn moreSouth Carolina's Genuinely Distinct Two-Bracket Income Tax
Act 110 (H.4216), signed March 30, 2026, restructured South Carolina's income tax into two brackets for tax year 2026: 1.99% on the first $30,000 of taxable income, and 5.21% on income above that threshold -- replacing the prior graduated 0%/3%/6% structure. This is a real, structural middle ground between no-income-tax states (Texas, Tennessee, Florida) and higher flat-rate or steeply graduated states covered elsewhere in this project -- not zero, and not a single flat percentage either. Further rate reductions are triggered by state revenue growth beginning in 2027, per the same legislation. A new "SC Income Adjusted Deduction" replaces the federal standard/itemized deduction framework the state previously piggybacked on -- confirm current specifics with a tax professional given how recently this changed.
Columbia's Combined Sales Tax Rate: 8%, With Groceries Exempt
South Carolina's statewide sales tax rate is 6%. Columbia's minimum combined 2026 rate is 8% -- the 6% state rate plus 1% city/local-option tax plus 1% from a special taxing district, per Avalara. Richland County's own county-level sales tax component is 0%, with the additional local rate coming from the city and special-district layers instead. Unprepared groceries are exempt from the 6% state sales tax rate; whether Richland County's specific local-option component also exempts groceries wasn't independently confirmed this pass, though South Carolina law generally permits counties to apply their own local-option tax to groceries even where the state rate doesn't.
No State Estate or Inheritance Tax
South Carolina levies no state-level estate tax or inheritance tax. Federal estate tax can still apply to sufficiently large estates -- the federal exemption for 2026 is $15 million for an individual and up to $30 million for a married couple with proper planning -- but South Carolina itself adds no separate state-level layer on top of that.
Social Security and Retirement-Income Treatment: Pointer to the Retiring Page
South Carolina fully exempts Social Security from state income tax regardless of age, and residents 65+ get a further $15,000-per-person deduction against other retirement income (reduced by any other retirement deduction claimed, except for surviving spouses). Taxpayers under 65 can deduct up to $3,000 of retirement income. This is real, current, and covered in full depth on the retiring topic page in the companion file rather than repeated here.
Fort Jackson, USC, and State Government Employees All Pay the Same State Rates
Unlike some states with special military-pay carve-outs, this pass did not find evidence of a Columbia-specific or Fort Jackson-specific state income tax exemption beyond South Carolina's general rules -- active-duty military pay and civilian state-government/university salaries are all subject to the same two-bracket 1.99%/5.21% structure described above, alongside whatever federal-level military-pay rules apply nationally. Confirm current specifics with a tax professional for any military-pay-specific situation.
Key takeaways
- South Carolina's Act 110 (effective tax year 2026) set a genuinely distinct two-bracket income tax: 1.99% on the first $30,000 of taxable income, 5.21% above that -- not a no-income-tax state, and not a single flat rate.
- Columbia's combined sales tax rate is 8% (6% state + 1% city/local-option + 1% special district); Richland County's own county-level component is 0%. Groceries are exempt from the 6% state rate.
- South Carolina has no state estate or inheritance tax, though the federal estate tax can still apply to large estates ($15M individual / $30M couple exemption for 2026).
- Social Security is fully exempt from SC state income tax at any age, with a further $15,000-per-person deduction for residents 65+ -- see the retiring topic page for full detail.
- This pass found no Columbia- or Fort Jackson-specific state income tax carve-out beyond South Carolina's general rules -- military, university, and state-government pay are all subject to the same 1.99%/5.21% structure.
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