The state of South Carolina relies on a diverse group of own-source revenue instruments, including individual and corporate income taxes, a retail sales tax, excise taxes, and other taxes, fees, and service charges, to support current services.

Some of this own-source revenue supplies the South Carolina General Fund, from which the General Assembly funds much of the state's discretionary spending as well as debt service on general obligation bonds. Revenue from certain taxes, most notably the motor fuel user fee and the fifth penny of the retail sales tax, is placed in separate funds that are earmarked for spending on specific programs such as transportation and education.

Federal aid supports specific programs and projects outside the General Fund. In addition, bond issues make possible the construction of large capital projects through long-term debt financing.

This paper reviews South Carolina's state revenue sources, with emphasis placed on sources for the General Fund. It examines the rationale for and structure of these revenue sources, revenue growth over time, and how incentives to households and businesses affect revenue collections. The distribution of the tax burden from individual taxes and fees is discussed and tax rate comparisons with other southern states are provided.

Appendices provide detailed information on all measures for all states and the District of Columbia.

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