South Carolina Sales Tax Rates

Total Range for 2024

6%-9%

South Carolina department of revenue

Why do you need to collect sales tax in South Carolina?

If you’re selling goods and services in South Carolina then sales tax might apply! To determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.

Two types of nexus exist:

  1. Physical Nexus: Having a physical presence, like an office, warehouse, or employees in South Carolina, triggers this type. If you do, you likely need to collect sales tax.
  2. Economic Nexus: This kicks in when your sales within South Carolina exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.

Is what you’re selling taxable in South Carolina?

Now that you understand the basics of South Carolina’s sales tax and nexus thresholds, let’s delve into whether your specific products or services are taxable.

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How to register for sales tax in South Carolina

To register for sales tax in South Carolina, you’ll need to apply for a Retail License through the South Carolina Department of Revenue (SCDOR). Here’s how:

  1. Online Registration:

The SCDOR recommends registering online using their MyDORWAY Business Tax Application: https://dor.sc.gov/tax/registration

This is the quickest and easiest method. You can apply for a Retail License and other business tax accounts through this portal.

  1. Information Needed:

During the application process, be prepared to provide information about your business, including:

  • Business name, address, and contact information
  • Federal Employer Identification Number (EIN)
  • Date your business began or will begin operations
  • Projected monthly sales and taxable sales
  • Products or services you will be selling
  1. Processing Time:

Allow up to 5 business days for the SCDOR to process your application and notify you by email of the approval.

How to collect sales tax in South Carolina

Here’s how to collect sales tax in South Carolina::

  • Collect the Sales Tax:
    • At the point of sale, you need to collect the appropriate sales tax amount from your customer on top of the sales price of the taxable goods or services.
  • Recordkeeping:
    • It’s crucial to maintain accurate records of your sales transactions. This includes details like the date, location, type of item sold, sales price, and the amount of sales tax collected for each transaction.
Example:

You run a bakery in Charleston County (SC), which has a 1% local sales tax on top of the 6% state rate (total 7%). A customer buys a loaf of bread for $5 from your bakery.

Calculation:

  • Sales tax rate: 7% (6% state + 1% Charleston County)
  • Sales tax amount: $5 x 7% = $0.35

Breakdown:

  • Price of bread: $5.00
  • Sales tax rate: 7% and Sales tax amount: $0.35
  • Total cost for customer: $5.00 + $0.35 = $5.35

FAQs

Do you have a physical nexus in South Carolina?

You have a physical nexus in South Carolina if your business has any of the following connections to the state:

  • Physical Presence: This includes having an office, store, warehouse, or any other physical location used for business purposes within South Carolina.
  • Employees: Having employees physically present in South Carolina, even for a short period, can establish nexus.
  • Inventory: Storing inventory within South Carolina, even if through a fulfillment service like Amazon FBA, creates physical nexus.
  • Property Ownership: Owning real estate or other tangible property in South Carolina can trigger nexus.
  • Delivery Vehicles: Owning vehicles used for deliveries within South Carolina establishes nexus.
  • Independent Contractors: Utilizing independent contractors or other representatives physically located in South Carolina for sales or customer service could create nexus.
Do you have an economic nexus in South Carolina?

South Carolina also has economic nexus rules. This means even without a physical presence, you might need to collect sales tax if your sales exceed a certain threshold within the state – currently $100,000 in gross sales

What is use tax in South Carolina?

In South Carolina, use tax applies to purchases of tangible personal property (physical goods) made from out-of-state vendors that you will use, store, or consume within the state. It essentially ensures you pay your fair share of sales tax even if you didn’t make the purchase in South Carolina.

Here’s a breakdown of how use tax works in South Carolina:

  • When it applies: You owe use tax if you buy something from an out-of-state retailer (without paying sales tax) and bring it to South Carolina for use, storage, or consumption.
  • Tax rate: The use tax rate is the same as the combined sales tax rate for your location in South Carolina.
  • Your responsibility: Unlike sales tax collected by retailers, you are responsible for reporting and paying use tax on your South Carolina tax return. The SCDOR website has resources to help you calculate and report use tax.
Do you need a seller/reseller permit?

In South Carolina, a seller’s permit is called a Retail License. You do need a Retail License if your business is involved in the retail sale of tangible personal property anywhere in South Carolina  This applies to:

  • Retail Businesses: If you have a physical store or operate online selling taxable goods to South Carolina customers, you need a Retail License.
  • Remote Sellers: Even if you don’t have a physical presence in South Carolina, but you make sales to customers in the state that exceed $100,000 gross revenue in a year, you’ll likely need a Retail License.
How to get a sales tax permit/license in South Carolina?

Method 1: Online Registration (Recommended)

The South Carolina Department of Revenue (SCDOR) recommends applying for your Retail License online through their MyDORWAY Business Tax Application.

Method 2: Mail or In-Person

While online registration is preferred, you can also submit a paper application by mail or visit an SCDOR office in person.

When are South Carolina's Returns Due?

South Carolina’s sales tax returns are due on the 20th day of the month following the reporting period.

If the due date falls on a weekend or holiday, the filing is then due on the next business day.

How to file sales tax in South Carolina

There are two main ways to file sales tax returns in South Carolina:

  1. Online Filing (Recommended):

The SCDO) strongly recommends filing sales tax returns electronically through their MyDORWAY web portal.

Here’s a simplified breakdown of the process:

  • Sign in: If you haven’t already, create an account on MyDORWAY using your Retail License information.
  • Select “Sales and Use Tax”: Locate the specific section for sales tax filing within MyDORWAY.
  • Choose the Filing Period: Select the month or quarter for which you are filing the return.
  • Enter Sales Data: Fill out the required fields with your total sales, sales tax collected, and any applicable deductions or exemptions.
  • Submit and Pay: Once the information is complete, submit the return and make the tax payment electronically through MyDORWAY.
  1. Paper Filing (Limited Use):

Paper filing is only an option for taxpayers with a tax liability of less than $15,000 per filing period.  Here’s what you’ll need to do:

  • Download the Forms: Obtain the necessary forms from the SCDOR website. You’ll likely need the ST-3 State Sales and Use Tax Return and potentially additional schedules depending on your situation. 
  • Complete the Forms Manually: Fill out the forms accurately with your sales tax information.
  • Mail the Return: Send the completed forms and your tax payment to the address provided on the return instructions.
Is anyone exempt from sales tax in South Carolina?

Exempt Purchases:

  • Groceries: Most unprepared food items for human consumption are exempt from sales tax. However, prepared foods and restaurant meals are generally taxable.
  • Prescription drugs and medical equipment: These are typically exempt from sales tax.
  • Certain farm equipment: Machinery and equipment used directly in farm production might be exempt.

Exempt Entities:

  • Government agencies: Purchases made by federal, state, and local government agencies for governmental use are usually exempt.
  • Certain non-profit organizations: Non-profit organizations may be exempt from sales tax on purchases made for charitable purposes. However, they are still liable for sales tax on items they purchase for their own use.
  • Religious organizations: Religious organizations are generally exempt from sales tax on purchases made for religious purposes.

Contact Yonda Tax Today

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