Title 12, Taxation

(A) Applications for property exemptions, other than the exemption provided by Section 12-37-220(A)(9), must be filed as follows: (1) Except as otherwise provided any property owner whose property may qualify for property exemption shall file an application for exemption with the…

The department, upon receipt of an application and upon proper investigation, may declare the real and personal property of a property owner qualifying for an exemption from ad valorem taxation identified in this chapter as exempt and shall certify the exemption to the auditor's …

(A) An owner of tax-exempt property or a property owner requesting tax exemption shall furnish information and records requested by the department. The department and its agents may examine portions of the financial records of the owners of real and personal property as necessary…

(A) The department may revoke tax-exempt status if the property does not qualify or continue to qualify for tax-exempt status under the provisions of the Constitution and the general laws of the State. (B) If the department finds within three years from the date that taxes would …

This chapter may be cited as the "South Carolina Income Tax Act".

For South Carolina income tax purposes, gross income, adjusted gross income, and taxable income as calculated under the Internal Revenue Code are modified as provided in this article and subject to allocation and apportionment as provided in Article 17 of this chapter.

South Carolina gross income is computed by making modifications to gross income provided in the Internal Revenue Code as follows: (1) The exclusion from gross income authorized by Internal Revenue Code Section 103 (Interest on State and Local Bonds) is modified to exempt only int…

South Carolina taxable income is computed by making modifications to deductions provided in the Internal Revenue Code as follows: (1) The disallowance of deductions relating to tax-exempt income required by Internal Revenue Code Section 265 applies if the related income is exempt…

There is allowed as a deduction in computing South Carolina taxable income of an individual the following: (1) a net gain deduction as provided in Section 12-6-1150; (2) an additional deduction for dependents under six years of age as provided in Section 12-6-1160; (3) a deductio…

(A) Individuals, estates, and trusts are allowed a deduction from South Carolina taxable income equal to forty-four percent of net capital gain recognized in this State during a taxable year. In the case of estates and trusts, the deduction is applicable only to income taxed to t…

A resident individual taxpayer is allowed an additional deduction for each dependent eligible for the South Carolina dependent exemption pursuant to Section 12-6-1140 who has not yet attained the age of six years during the applicable tax year. The deduction allowed by this secti…

(A)(1) An individual taxpayer who is the original owner of a qualified retirement account is allowed an annual deduction from South Carolina taxable income of not more than three thousand dollars of retirement income received. Beginning in the year in which the taxpayer reaches a…

(A) An individual taxpayer may deduct all military retirement income that is included in South Carolina taxable income. (B) The term "retirement income", as used in this section, means the total of all otherwise taxable income not subject to a penalty for premature distribution r…

(A) As used in this section: (1) "Unauthorized alien" means an unauthorized alien as defined by 8 USC Section 1324A(h)(3). (2) "Labor services" means the physical performance of services in this State. (B) On or after January 1, 2009, no wages or remuneration for labor services t…

Retirees receiving benefits from the various state retirement systems or any other retirement plan maintained by a political subdivision of this State who have recovered all or a part of their recoverable costs in their retirement benefits for federal income tax purposes before J…

South Carolina taxable income does not include amounts excluded from federal income tax by reason of a treaty of the United States.

(A) If as of January 1, 1985, a taxpayer is for federal income tax purposes amortizing a capital expense paid or incurred before January 1, 1985, as provided in Internal Revenue Code Sections 171 (Amortization of Bond Premium), 174 (Research and Experimental Expenditures), 185 (A…

Families on AFDC and those not receiving welfare but whose household income falls below one hundred eighty-five percent of the federal poverty level may own an Individual Development Account. Contributions to and interest on these accounts are tax free, and a recipient may accrue…

As used in this article: (1) "Qualified catastrophe expenses" mean expenses paid or incurred by reason of a major disaster that has been declared by the Governor to be an emergency by executive order. (2) "Qualified deductible" means the deductible for the individual's homeowner'…

(A)(1) An individual taxpayer is allowed a deduction from the tax imposed pursuant to Section 12-6-510 for amounts contributed to a Catastrophe Savings Account in accordance with subsection (B)(3); and (2) all interest income earned by the Catastrophe Savings Account is exempt fr…

(A) A distribution from a Catastrophe Savings Account must be included in the income of the taxpayer unless the amount of the distribution is used to cover qualified catastrophe expenses. (B) No amount is included in income, pursuant to subsection (A) of this section, if the qual…

An individual who is a part-year resident of South Carolina may: (1) report and compute South Carolina tax as if the individual was a resident for the entire year and use the credit provided in Section 12-6-3400; or (2) report and compute South Carolina tax as a nonresident indiv…

A nonresident individual, a nonresident trust, a nonresident estate, and a nonresident beneficiary shall report and compute South Carolina taxable income as a resident taxpayer of this State subject to the following modifications: (1) South Carolina taxable income, gains, losses,…

The department shall administer and enforce the taxes imposed by this chapter. The department shall make and publish rules and regulations, not inconsistent with this chapter, necessary to enforce its provisions. These rules and regulations have the force of law.

(A) If the entire business of a taxpayer is transacted or conducted within this State, the income tax as provided in this chapter is measured by the entire net income of the taxpayer for the taxable year. The entire business of the taxpayer is transacted or conducted within the S…

The following items of income must be directly allocated and excluded from the apportioned income and the apportionment factors: (1) Interest received from intangible property not connected with the taxpayer's business, less all related expenses, is allocated to the state of the …

Any income, less all related expenses, which is not allocated under Section 12-6-2220 and not properly includable in the net apportionable income of taxpayers engaged in interstate commerce under the Constitution of the United States because it is unrelated to the business activi…

All income remaining after allocation pursuant to Sections 12-6-2220 and 12-6-2230 is apportioned in accordance with Section 12-6-2252, or one of the special apportionment formulas provided in Sections 12-6-2290 through 12-6-2310.

(A) A taxpayer whose principal business in this State is (i) manufacturing or a form of collecting, buying, assembling, or processing goods and materials within this State, or (ii) selling, distributing, or dealing in tangible personal property within this State, shall make retur…

(A) The sales factor is a fraction in which the numerator is the total sales of the taxpayer in this State during the taxable year and the denominator is the total sales of the taxpayer everywhere during the taxable year. (B) The term "sales in this State" includes sales of goods…

If the principal profits or income of a taxpayer are derived from sources other than those described in Section 12-6-2252 or Section 12-6-2310, the taxpayer shall apportion its remaining net income using a fraction in which the numerator is gross receipts from within this State d…

(A) The terms "sales" as used in Section 12-6-2280 and "gross receipts" as used in Section 12-6-2290 include, but are not limited to, the following items if they have not been separately allocated: (1) receipts from the sale or rental of property maintained for sale or rental to …

A business incorporated in a foreign country is required to apportion only United States source income as determined for federal purposes on Form 1120F if elected. No change in the election may be made without permission of the department. Income must be apportioned using rules p…

The income remaining after allocation for the following companies must be apportioned using the following factors: (1)(a) Railroad companies shall use a fraction in which the numerator is railway operating revenue from business done within this State during the taxable year and t…

(A) If the allocation and apportionment provisions of this chapter do not fairly represent the extent of the taxpayer's business activity in this State, the taxpayer may petition for, or the department may require, in respect to all or any part of the taxpayer's business activity…

Payment of tax otherwise due under this chapter on income attributable to the increase in gross income from foreign trading receipts may be deferred until the taxpayer intentionally ceases exporting property, or until after three taxable years in which the taxpayer has no gross i…

(A) All deferred tax payments attributable to a particular taxable year are due and payable no later than the annual return filing date for the fifth taxable year following the taxable year for which the payment of the tax was first deferred. A taxpayer may pay deferred taxes at …

The three-year limitation on assessment and collection of taxes in Sections 12-54-80 and 12-54-85 do not apply to the assessment of taxes deferred pursuant to this article. The three-year assessment period for purposes of the article begins when a return is filed under Section 12…

This article: (1) is effective for taxable years beginning after December 31, 1985; and (2) does not apply to taxpayers who form domestic international sales corporations or foreign sales corporations pursuant to the Internal Revenue Code.

For purposes of this article: (1) "Export property" means property manufactured, produced, grown, or extracted to which value is added in this State for direct use, consumption, or disposition outside the United States. (2) "Foreign trading receipts" means receipts from invoices …

As used in this chapter, the following words have the meaning provided unless otherwise required by the context: (1) "Taxpayer" includes an individual, trust, estate, partnership, association, company, corporation, or any other entity subject to the tax imposed by this chapter or…

(A) Credits allowed in this article are nonrefundable and may be used only in the year generated unless otherwise provided. (B)(1) Unless specifically prohibited, an "S" corporation, limited liability company taxed as a partnership, or partnership that qualifies for a credit purs…

The provisions of Internal Revenue Code Section 383 (Special Limitations on Certain Excess Credits) are applicable to all income tax credits available to a corporation for South Carolina income tax purposes.

(A) Married individuals are allowed a two wage earner credit against South Carolina income tax if both spouses have South Carolina earned income and a joint return is filed under the provisions of Section 12-6-5000. (B) The credit is limited to seven-tenths of one percent multipl…

(A) A taxpayer may claim as a credit twenty-five percent of all expenditures paid or incurred during the taxable year for the purchase and installation of the following energy conservation and renewable energy production measures: (1) conservation tillage equipment; (2) drip/tric…

(A) A taxpayer having a contract with this State who subcontracts with a socially and economically disadvantaged small business is eligible for an income tax credit equal to four percent of the payments to that subcontractor for work pursuant to the contract. The subcontractor mu…