How Much Would You Save: South Carolina vs Florida Taxes

South Carolina made the most aggressive income tax change of any state in this comparison. House Bill 4216, signed by Governor McMaster on March 30, 2026, cut the top marginal rate to 5.21% for tax year 2026, down from 6.2% the year before, and restructured the system into two brackets: 1.99% on income under $30,000 and 5.21% on income of $30,000 and above, less a $966 offset, calculated from federal adjusted gross income. The South Carolina Department of Revenue confirms the change takes effect with the 2026 tax year, on returns due April 15, 2027. The law also sets revenue triggers that ratchet the top rate down further in future years if the Board of Economic Advisors projects revenue growth of 5% or more, with a stated goal of eventually reaching a single low flat rate.

That is a genuinely taxpayer-friendly direction, but the key word is eventually. For tax year 2026, a South Carolina resident still pays real money. A single filer with $100,000 of income takes the new $15,000 state deduction, leaving $85,000 of South Carolina taxable income, and owes roughly $3,460 in state tax once the $966 offset is applied. A Florida resident earning the same $100,000 pays $0 today, not several years from now. Florida's zero rate is backed by Article VII, Section 5 of the Florida Constitution, so there is no glide path to wait out and no revenue trigger that has to be met.

South Carolina does get several things right. It does not tax Social Security benefits, and its property taxes are among the lowest in the country thanks to a 4% assessment ratio on primary residences. It has also long offered a deduction on net long-term capital gains. Florida matches the retirement-friendly profile with no income tax on any retirement income, no capital gains tax, and no estate tax, while adding an constitutional homestead protection, subject to acreage limits and exceptions that South Carolina does not provide.

For residents who are mobile, retired, or running a location-independent business, the decision often comes down to timing. If you expect to relocate in the next several years anyway, moving your domicile to Florida now captures the full 0% benefit immediately rather than paying 5.21% while South Carolina works through its multi-year schedule.

As with any domicile change, documentation is what makes it defensible: a Florida residential address, a Declaration of Domicile, a Florida driver's license, and voter registration, together with an assessment of South Carolina domicile and any continuing source income. Our Florida domicile service handles the full process.