Sales Tax in South Carolina: How it Works and What You Need to Know

In the United States, sales tax is a significant source of funding for state and municipal governments. The majority of purchases of goods and services, including retail sales, rents, and some professional services, are subject to sales tax in South Carolina. Additionally, local governments are permitted by the state to impose additional sales taxes, which vary by jurisdiction.

South Carolina will have a 6% statewide sales tax as of 2021. Local governments may, however, tack on an additional 3% in sales taxes, bringing the whole tax rate to 9%. Schools, roads, and public safety are among the municipal initiatives and services that are supported by the additional local sales taxes.

South Carolina levies a use tax in addition to the regular sales tax on transactions made outside the state that would have been subject to sales tax if made inside the state. This is done to stop locals from shopping online or in other states in order to avoid paying sales tax.

In contrast, South Dakota gets most of its money from sales and use taxes as well as from tourism. The state’s sales tax rate is 4.5%, and local governments are free to tack on their own levies as well, up to a combined 6.5% maximum rate. Additionally, South Dakota does not have an income tax, which makes it a desirable location for entrepreneurs and retirees.

Because of its proximity to the Black Hills and opportunities for hiking, bicycling, and skiing there, Rapid City, South Dakota, is a favorite vacation spot for outdoor enthusiasts. Compared to other regions of the country, the city has a low cost of living, with a median property price of about $220,000. Ellsworth Air Force Base and the Rapid City Regional Health System are two significant employers in Rapid City, which also has a healthy job market.

Finally, it should be noted that sales taxes are a significant source of funding for state and local governments, with South Carolina and South Dakota both depending on them to provide their public services. Customers should be aware of the use tax while making purchases outside of their state and the applicable sales tax rates in their area. Living in Rapid City, South Dakota has several benefits, including a low cost of living and a robust job market.