Filing your taxes may still be a pain, but at least South Carolina taxpayers pay the ninth lowest tax rate in the country, according to a new analysis.
The median South Carolinian household pays an effective total state and local tax rate of 8.8 percent. The tax burden on the median South Carolina household this year comes up to $4,009. That’s in addition to the average $5,700 each taxpayer pays in federal taxes, yearly, according to the Bureau of Labor Statistics, and almost 18 percent less than the national average, according to the analysis by personal finance site WalletHub that uses data from the U.S. Census Bureau.
$4,009 What the median South Carolina household pays in annual state and local taxes
Its 2015 study similarly found that South Carolina is the fifth best state for low-income earners, when the cost of living is taken into account.
Tax rates in the most expensive states, like New York, Connecticut and Illinois, are up to three times higher than those in the least expensive states like Delaware, Wyoming and Montana. When adjusted for cost of living, Delaware has the lowest tax rate with just over 6 percent – a 44 percent difference from the national average.
Unsurprisingly, New York tops the list with the highest tax rate at 13.4 percent. The report found that taxes are 10 percent higher in blue states than in red states.
Another reason why living in the Palmetto State is good news for taxpayers: it has the third cheapest gas tax per gallon after Alaska and New Jersey. South Carolina also has the sixth lowest real estate tax rate (1.87 percent), and 14th lowest sales and excise taxes.
The report found that taxes are 10 percent higher in blue states than in red states.
Individual returns are due on April 18 this year. Here are some other things that are different this tax season in South Carolina:
Delayed state refunds
Many of the South Carolinians who filed taxes early this year had a longer wait for their state refunds. In an effort to combat tax fraud, the South Carolina Department of Revenue announced in January that it would have to delay refunds on state income tax until March 1. They used the extra time to verify wage documents with the IRS in an effort to block taxpayer refunds from being stolen.
Tax relief for South Carolina flood victims
Many South Carolina taxpayers who were affected by last October’s disastrous floods qualify for tax relief from the state’s Department of Revenue. The IRS provided special filing extensions and payment relief for taxpayers in 24 counties that were declared federal disaster areas. Individuals and businesses in these counties that had previously received a tax-filing extension till Oct. 15 were given four extra months, until Feb. 16, to file their returns and pay any taxes they owed.
S.C. sales tax for Amazon shoppers
If you’re an Amazon shopper and had your purchases shipped to South Carolina, you may have received an email from the online retail giant earlier this year about owing taxes on your purchases. That’s because a sales tax break that the S.C. legislature gave Amazon in 2011 expired on Jan. 1, which means that South Carolinians joined the 27 other states that collect sales tax on Amazon purchases. Taxing Amazon’s in-state sales has the potential to send tens of millions of dollars the state’s way.
For years Amazon has fought collecting sales taxes from its customers by arguing that it doesn’t have a physical presence in these states, which, according to two U.S. Supreme Court decisions, means that states can’t force companies to collect these taxes. Technically shoppers are still legally responsible for paying the state these taxes on their online purchases when they file their returns, and Amazon is required to notify customers. However, most people ignore the notifications and it is very difficult for the state to enforce, so it’s up to you.
Vera Bergengruen: 202-383-6036, @verambergen