Income Tax: Two Different Systems
Income tax is where the two states differ most in design. North Carolina applies one rate to everyone. South Carolina now applies two rates and a deduction that depends on how much you earn.
North Carolina Income Tax in 2026
North Carolina taxes income at a flat 3.99%. The standard deduction is $12,750 for single filers and $25,500 for married couples filing jointly. Every dollar above the deduction is taxed at the same rate, and there is no local income tax anywhere in the state. The rate is scheduled to fall to 3.49% for 2027. For how the calculation works, see our North Carolina income tax guide and the NC standard deduction guide.
South Carolina Income Tax in 2026
South Carolina now starts from your federal adjusted gross income and subtracts a new South Carolina Income Adjusted Deduction. Taxable income under $30,000 is taxed at 1.99%. At $30,000 or more, the tax is 5.21% of taxable income minus $966. The deduction is generous at lower incomes and disappears at higher ones.
| Filing Status | Full Deduction | Shrinks Above | Gone At |
|---|
| Single | $15,000 | $40,000 | $95,000 |
| Head of household | $22,500 | $60,000 | $142,500 |
| Married filing jointly | $30,000 | $80,000 | $190,000 |
Between those two income levels the deduction is reduced in proportion. A single filer earning $67,500, halfway through the range, gets about half of the $15,000 deduction.
Where the Two States Cross Over
South Carolina's low first rate and larger deduction make it cheaper at modest incomes. As income rises, the South Carolina deduction phases out and more income is taxed at 5.21%, which is higher than North Carolina's 3.99%. For a single filer the two states charge about the same at roughly $68,000 of income. For a married couple filing jointly the crossover is about $100,000. Below those points South Carolina is lower, and above them North Carolina is lower by a widening margin.
Real Dollar Comparison: What You Actually Pay
The tables show state income tax only, for tax year 2026, assuming all income is wages and no deductions beyond each state's standard amount. Federal taxes are the same in both states.
Single Filers
| Income | NC Income Tax | SC Income Tax | Lower State |
|---|
| $40,000 | $1,087 | $498 | SC by $589 |
| $60,000 | $1,885 | $1,662 | SC by $223 |
| $75,000 | $2,484 | $2,657 | NC by $173 |
| $100,000 | $3,481 | $4,244 | NC by $763 |
| $150,000 | $5,476 | $6,849 | NC by $1,373 |
Married Filing Jointly
| Income | NC Income Tax | SC Income Tax | Lower State |
|---|
| $80,000 | $2,175 | $1,639 | SC by $536 |
| $100,000 | $2,973 | $2,965 | About even |
| $150,000 | $4,968 | $6,281 | NC by $1,313 |
| $250,000 | $8,958 | $12,059 | NC by $3,101 |
How the Math Works at $75,000
For a single filer earning $75,000:
- North Carolina: $75,000 − $12,750 standard deduction = $62,250 taxable × 3.99% = $2,484
- South Carolina: the $15,000 deduction is reduced by $9,540 at this income, leaving $5,460. $75,000 − $5,460 = $69,540 taxable. 5.21% of that is $3,623, minus $966 = $2,657
- Difference: North Carolina is lower by $173 a year
To see your own North Carolina figure, including federal tax and FICA, use the NC paycheck calculator.
Sales Tax: NC vs SC
South Carolina has the higher state rate, but local rates vary so much in both states that where you shop matters more than which state you are in.
State and Local Rates
North Carolina's state sales tax is 4.75%. Counties add 2% to 2.75%, which puts most of the state between 6.75% and 7.5%. Mecklenburg County is the exception at 8.25% since July 2026. South Carolina's state rate is 6%, and local taxes add up to 3% more.
| Area | Combined Sales Tax Rate |
|---|
| Most NC counties | 6.75% to 7.5% |
| Charlotte, NC (Mecklenburg County) | 8.25% |
| Greenville, SC | 6% |
| Rock Hill, SC | 7% |
| Columbia, SC | 8% |
| Charleston and Myrtle Beach, SC | 9% |
On $25,000 of taxable spending a year, the gap between a 7% area and a 9% area is $500. Along the border the usual pattern has reversed. Charlotte's rate is now higher than the rate in Rock Hill and Fort Mill just across the line.
Groceries
Both states go easy on groceries. North Carolina exempts most unprepared food from the state tax and charges a 2% local tax in every county. South Carolina exempts unprepared food from its 6% state tax, and many counties exempt it from local taxes too, though some do not. Restaurant meals and prepared food are taxed at the full rate in both states, and some cities and counties add a separate tax on prepared meals.
Vehicles and Large Purchases
Vehicles are where South Carolina is clearly cheaper. North Carolina charges a 3% Highway Use Tax on the purchase price with no cap, so a $40,000 car costs $1,200 in tax. South Carolina charges a 5% Infrastructure Maintenance Fee that is capped at $500 no matter the price. Both states also bill property tax on vehicles every year.
Property Tax and Other Taxes
For homeowners, property tax is often the largest difference between the two states, and it runs in South Carolina's favor.
Property Tax: South Carolina's Biggest Advantage
North Carolina's average effective property tax rate is roughly 0.80% of a home's value, and South Carolina's is roughly 0.57%. On a $350,000 home that is about $2,800 a year in North Carolina and about $2,000 in South Carolina. South Carolina assesses owner-occupied homes at 4% of market value and exempts them from school operating taxes, which is why primary residences are taxed so lightly there. Second homes and rental properties in South Carolina are assessed at 6% and pay considerably more. Rates vary widely by county in both states. See our NC property tax rates by county guide.
Gas Tax
North Carolina's gas tax is 41 cents a gallon for 2026, and South Carolina's is 28.75 cents including fees. North Carolina suspended its gas tax from October 10 through November 30, 2026, so for those weeks the comparison is reversed. At the normal rates, a driver who buys 600 gallons a year pays about $75 more in North Carolina.
Estate, Inheritance, and Local Income Taxes
Neither state has an estate tax or an inheritance tax, and neither allows cities or counties to tax income. On these points the two states are identical. Our NC inheritance tax guide covers what heirs do and do not owe.
Which State Wins for Retirement?
Retirees face a different calculation than workers, because the states treat retirement income differently and because property tax matters more on a fixed income.
Social Security and Military Retirement
Both states fully exempt Social Security benefits. Both also exempt military retirement pay, North Carolina since 2021 for those with 20 years of service or a medical retirement, and South Carolina since 2022. On these two sources the states are even. See our guide on Social Security taxes in NC.
Withdrawals From 401(k) Plans, IRAs, and Pensions
North Carolina taxes these at 3.99% after the standard deduction, with no extra break for age. South Carolina has long allowed taxpayers 65 and older to deduct up to $15,000 of income, in addition to its regular deduction. Assuming that deduction continues under the new system, a single retiree aged 65 or older with $50,000 of taxable retirement income would owe about $450 in South Carolina and about $1,490 in North Carolina. At $80,000 the figures are about $2,200 and $2,680. Our NC retirement income tax guide and our guide to retiring in North Carolina cover the NC side in detail.
Property Taxes on a Fixed Income
Lower property tax is worth the most to retirees who own their homes outright. On a $300,000 home, South Carolina's lower rate saves roughly $700 a year. Both states offer additional relief for older homeowners with limited income. For a retiree who owns a home and draws a moderate income, South Carolina now comes out ahead on both income tax and property tax.
Living in One State and Working in the Other
The Charlotte area sits on the state line, and thousands of people live in one state and work in the other.
There Is No Reciprocity Agreement
North Carolina and South Carolina do not have a tax reciprocity agreement. If you live in South Carolina and work in North Carolina, your employer withholds North Carolina tax. You file a nonresident return in North Carolina and a resident return in South Carolina, and South Carolina gives you a credit for the tax you paid to North Carolina on the same income. In practice you end up paying roughly the higher of the two states' tax on those wages. The same logic applies in reverse for North Carolina residents who work in South Carolina.
Charlotte, Fort Mill, and Rock Hill
Many Charlotte workers live in York County, South Carolina, for the lower property taxes and vehicle costs. Since July 2026 they also pay a lower sales tax at home than in Mecklenburg County. Because their wages are earned in North Carolina, they still pay North Carolina income tax on them. The property and sales tax savings are real, and the income tax result is usually close to what a North Carolina resident would pay. Our Charlotte cost of living guide covers housing costs on the NC side.
Is It Worth Moving for Taxes?
Rarely for taxes alone. A single renter earning $60,000 would save about $220 a year in income tax by living in South Carolina. A single homeowner earning $150,000 with a $500,000 house would pay about $1,370 more in South Carolina income tax and about $1,150 less in property tax, which nearly cancels out. The clearer cases are high earners who rent, who do better in North Carolina, and retired homeowners, who do better in South Carolina. Job markets, housing prices, and where your family lives will usually matter more. If you are relocating, our moving to North Carolina tax guide explains the filing steps.
Frequently Asked Questions
Does North Carolina or South Carolina have lower taxes overall?
It depends on your income and whether you own a home. In 2026, South Carolina has lower income tax for single filers earning under about $68,000 and married couples under about $100,000, and lower property taxes at every income. North Carolina has lower income tax above those levels. A middle-income homeowner generally pays less in South Carolina, and a high-income renter generally pays less in North Carolina.
Is sales tax higher in NC or SC?
South Carolina's state rate of 6% is higher than North Carolina's 4.75%, but the combined rate you pay depends on the county. Most North Carolina counties charge 6.75% to 7.5%, and Charlotte charges 8.25%. South Carolina ranges from 6% in Greenville to 9% in Charleston and Myrtle Beach. Vehicles are cheaper to buy in South Carolina because its 5% fee is capped at $500.
Do North Carolina and South Carolina have tax reciprocity?
No. If you live in one state and work in the other, you file a return in both. The state where you work taxes your wages, and your home state gives you a credit for that tax so the same income is not taxed twice in full.
Will these numbers change in 2027?
Yes. North Carolina's rate drops to 3.49% for 2027 under a law already passed, which lowers the crossover point to roughly $60,000 for a single filer if South Carolina's rates stay the same. South Carolina's top rate can also fall, starting in 2027, in years when state revenue grows by at least 5%. We will update this comparison when both states publish their 2027 figures. For the full picture of what a North Carolina paycheck buys, see our NC cost of living guide.
Sources: South Carolina Department of Revenue Information Letter #26-20 (Act 110 of 2026); NC Department of Revenue; NC Session Law 2026-41.
