Selling a business in South Carolina: what the state takes (2026)
South Carolina’s top individual income tax rate is 5.21%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 5.21%
- Top South Carolina income tax rate (2026)
- $729,400
- State tax on a $25M long-term gain
- 26.7%
- Combined federal and state rate on $25M
- 39 of 51
- Rank by total tax on $25M (1 = highest)
How South Carolina taxes a business sale
- Income tax
- Top rate 5.21%: $30,000 and above (5.21% x taxable income minus $966).
- Long-term capital gains
- Individuals deduct 44% of net capital gain recognized in South Carolina (S.C. Code 12-6-1150), with no dollar cap. The rest is taxed at 5.21%, an effective rate of about 2.92% on long-term gain.
- Entity-level taxes
- The elective 3% rate on active pass-through business income (S.C. Code 12-6-545) excludes capital gains, so it does not help on a sale.
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| South Carolina tax | $291,760 | $729,400 | $1,458,800 |
| Total tax | $2,671,760 | $6,679,400 | $13,358,800 |
| Effective combined rate | 26.72% | 26.72% | 26.72% |
| Net proceeds after tax | $7,328,240 | $18,320,600 | $36,641,200 |
| Extra tax versus Texas | $291,760 | $729,400 | $1,458,800 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- South Carolina tax
- $729,400
- Gain excluded or deducted
- $11,000,000
- Taxable gain at 5.21%
- $729,400
- Total tax
- $6,679,400
- Effective rate on the gain
- 26.72%
- Net proceeds after tax
- $18,320,600
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Neighboring states
- Georgia28.8% combined, $17.80M net
- North Carolina27.8% combined, $18.05M net
Common comparisons
- California37.1% combined, $15.72M net
- New York34.1% combined, $16.48M net
- Texas23.8% combined, $19.05M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
- Tennessee23.8% combined, $19.05M net
Methodology and sources
South Carolina figures are for tax year 2026. Act 110 of 2026 (H.4216, signed March 30, 2026) applies from tax year 2026: 1.99% under $30,000 and 5.21% at $30,000 and above (tax = 5.21% x income - $966). From 2027 the top rate can fall further if revenue triggers are met. Tax Foundation's 2026 table still shows the old 6% top rate. The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1SC General Assembly, H.4216 / Act No. 110 (2026), amending 12-6-510
- 2SCDOR, Information about H. 4216 (Apr 15, 2026)
- 3S.C. Code Title 12 Chapter 6 (12-6-1150 44% net capital gain deduction; 12-6-545)
- 4Tax Foundation, State Individual Income Tax Rates and Brackets, 2026. Secondary source
Data last updated October 26, 2026.
Cite this research
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Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): South Carolina,” 2026, https://laurent.capital/research/seller-tax-map/south-carolinaLink (HTML)
<a href="https://laurent.capital/research/seller-tax-map/south-carolina">The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): South Carolina</a> (Laurent Capital)Planning a sale and weighing the tax cost?
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