What South Carolina tax interest rate applies from January 1 through September 30, 2025, and what rate is paid on eligible refunds?

Plain-English summary

South Carolina's listed tax interest rate is 7% for January 1 through September 30, 2025. The rate applies to tax underpayments and overpayments under S.C. Code Ann. § 12-54-25.

Interest is generally compounded daily. The exception identified in the letter is an underpayment of declaration of estimated tax, which uses simple interest.

The amount the Department pays on eligible refunds is lower. For fiscal year 2025-2026 (July 1, 2025 through June 30, 2026), Budget Provisos 41.2 and 117.81 require a combined three-percentage-point reduction from the listed rate. For an eligible refund in that fiscal year, that reduces the listed 7% rate to 4%.

The attached historical table also records the Department's rates for periods beginning September 1, 1985. Immediately before the current period, the listed rate was 8% from October 1, 2023 through December 31, 2024.

What this means for you

Taxpayers with unpaid balances

For the January-September 2025 period, use the 7% listed rate when estimating South Carolina interest on an underpayment. Because interest is generally compounded daily, the exact charge depends on the balance and the number of days outstanding.

Taxpayers expecting refunds

Do not assume the Department pays the full listed rate. Eligible refund interest during fiscal year 2025-2026 is reduced by three percentage points under the cited budget provisos, dropping 7% to 4%.

Estimated-tax filers

The letter distinguishes underpayments of declaration of estimated tax: those use simple interest rather than daily compounding.

Common questions

Q: What is the listed rate for January 1 through September 30, 2025?
A: 7%.

Q: Is tax interest compounded?
A: Generally yes, daily. Simple interest applies to underpayments of declaration of estimated tax.

Q: Does an eligible refund earn 7% in fiscal year 2025-2026?
A: No. The Department must reduce eligible refund interest by three percentage points, which reduces 7% to 4%.

Q: What was the listed rate immediately before January 2025?
A: 8% from October 1, 2023 through December 31, 2024.

Citations and references

Authority and statutes:

• S.C. Code Ann. § 12-54-25 (2014) — interest on tax underpayments and overpayments
• S.C. Code Ann. § 12-4-320 — Department's authority to issue advisory opinions
• SC Revenue Procedure #09-3
• 2025 S.C. Act No. 69, Provisos 41.2 and 117.81 — three-percentage-point reduction in eligible refund interest for fiscal year 2025-2026

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL25-12.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 125, Columbia, South Carolina 29214-0575

SC INFORMATION LETTER #25-12
SUBJECT:

Interest Rate

DATE:

June 20, 2025

REFERENCE:

S.C. Code Ann. Section 12-54-25 (2014)
2025 S.C. Act No. 69, Provisos 41.2 and 117.81

AUTHORITY:

S.C. Code Ann. Section 12-4-320
SC Revenue Procedure #09-3

SCOPE:

An Information Letter is a written statement issued to the public to announce general
information useful in complying with the laws administered by the Department. An
Information Letter has no precedential value.

The interest rate to be applied to underpayments and overpayments* of taxes is listed below. The rate is
compounded daily except simple interest applies to the underpayment of declaration of estimated tax.
Period

Rate*

Period

09/01/85 – 12/31/85
01/01/86 – 06/30/86
07/01/86 – 09/30/87
10/01/87 – 12/31/87
01/01/88 – 03/31/88
04/01/88 – 09/30/88
10/01/88 – 03/31/89
04/01/89 – 09/30/89
10/01/89 – 03/31/91
04/01/91 – 12/31/91
01/01/92 – 03/31/92
04/01/92 – 09/30/92
10/01/92 – 06/30/94
07/01/94 – 09/30/94
10/01/94 – 03/31/95
04/01/95 – 06/30/95
07/01/95 – 03/31/96
04/01/96 – 06/30/96
07/01/96 – 03/31/98

11%
10%
9%
10%
11%
10%
11%
12%
11%
10%
9%
8%
7%
8%
9%
10%
9%
8%
9%

04/01/98 – 12/31/98
01/01/99 – 03/31/99
04/01/99 – 03/31/00
04/01/00 – 03/31/01
04/01/01 – 06/30/01
07/01/01 – 12/31/01
01/01/02 – 12/31/02
01/01/03 – 09/30/03
10/01/03 – 03/31/04
04/01/04 – 06/30/04
07/01/04 – 09/30/04
10/01/04 – 03/31/05
04/01/05 – 09/30/05
10/01/05 – 06/30/06
07/01/06 – 12/31/07
01/01/08 – 03/31/08
04/01/08 – 06/30/08
07/01/08 – 09/30/08
10/01/08 – 12/31/08

Rate*
8%
7%
8%
9%
8%
7%
6%
5%
4%
5%
4%
5%
6%
7%
8%
7%
6%
5%
6%

Period
01/01/09 – 03/31/09
04/01/09 – 12/31/10
01/01/11 – 03/31/11
04/01/11 – 09/30/11
10/01/11 – 03/31/16
04/01/16 – 03/31/18
04/01/18 – 12/31/18
01/01/19 – 06/30/19
07/01/19 – 06/30/20
07/01/20 – 03/31/22
04/01/22 – 06/30/22
07/01/22 – 09/30/22
10/01/22 – 12/31/22
01/01/23 – 09/30/23
10/01/23 – 12/31/24
01/01/25 – 09/30/25

Rate*
5%
4%
3%
4%
3%
4%
5%
6%
5%
3%
4%
5%
6%
7%
8%
7%

*Note reduction of interest rate on refunds. For fiscal year 2025-2026 (July 1, 2025, through June 30,
2026), Budget Provisos 41.2 and 117.81 direct the Department to reduce the rate of interest paid on eligible
refunds by a total of three percentage points from the above listed rates.