TAX STRUCTURE

Real and personal property used in business are subject to property tax levied by local governments. Although property tax is collected locally, the South Carolina Department of Revenue (DOR) generally oversees property tax collections to ensure equitable and uniform assessment throughout the state. The Department of Revenue appraises manufacturing and distribution facilities. There is no state or local tax on intangibles or inventories. The calculation of property taxes involves the following three elements: *Valuation *Assessment Ratio: The assessment ratio, established in the State Constitution to ensure stability, is 10.5% for manufacturing property (in the absence of a fee-in-lieu agreement) and 6% for commercial real property. Commercial personal property is assessed at 10.5%. The valuation is multiplies by this ratio to produce the “assessed value” of a particular piece of property. Taxes are levied based upon this assessed value. *Millage: Each taxing jurisdiction determines on an annual basis the number of mills required to apply to the total assessed value of property subject to taxation within its jurisdiction in order to raise the money it needs to operate for the next year. (Each jurisdiction also takes other sources of revenue into account in making this determination.)