Quick Highlights on South Carolina Sales Tax
| Detail | Value |
|---|---|
| State Sales Tax Rate Range | 6–9% |
| Base State Sales Tax Rate | 6% |
| Local Rate Range | 0–3% |
| Economic Nexus Sales Threshold | $100,000 |
| Reference Period | Current or Previous Calendar Year |
| Registration Deadline | 1st day of the second calendar month after the threshold is reached |
| Revenue Authority | South Carolina Department of Revenue |
| Online Filing Portal | MyDORWAY |
As a business, do I need to collect sales tax in South Carolina?
Businesses are required to collect sales tax in South Carolina if they have a sales tax nexus in the state. This includes having a physical presence or reaching a specific sales level, which establishes an economic nexus. This is why understanding South Carolina state sales tax obligations is crucial for compliance.
Do I have a physical nexus in South Carolina?
A physical nexus in the state of South Carolina is established if your business has a physical presence in the state, like an office, warehouse, or store. Even temporary physical presence, like participating in trade shows or craft fairs, can create a nexus.
In South Carolina, physical nexus is typically triggered by employees or contractors engaged in customer-facing roles such as sales, marketing, or support.
How do I know if I have an economic nexus in South Carolina?
An economic nexus in South Carolina is determined by your sales volume. If your enterprise meets the threshold, you must register for a South Carolina sales tax permit, collect tax on sales shipped to South Carolina, and remit that tax to South Carolina Department of Revenue.
In South Carolina, economic nexus is established if your sales in the state exceed $100,000, based on Current or Previous Calendar Year.
Marketplace sales (e.g., Amazon, eBay) are included when calculating whether you've exceeded the South Carolina economic nexus threshold.
Sales made for resale are included in the nexus threshold calculation for South Carolina.
Non-taxable sales are included in the nexus threshold calculation for South Carolina.
Once you cross the threshold, you must register by 1st day of the second calendar month after the threshold is reached.
Which goods are taxable in South Carolina?
In South Carolina, sales tax applies to:
- Retail sales of tangible personal property
- Communications services (including SaaS/ASP services)
- Prewritten (canned) computer software
- Accommodations and lodging
- Electricity and gas (residential under certain thresholds may be exempt)
- Laundry and dry cleaning services
South Carolina taxes fewer enumerated services compared to some states but broadly taxes tangible personal property.
What items are exempt from sales tax in South Carolina?
South Carolina exempts the following from sales tax:
- Food and food ingredients for home consumption (unprepared groceries)
- Prescription drugs and medical devices
- Agricultural inputs (feed, seed, fertilizer)
- Manufacturing machinery and equipment
- Textbooks sold by school bookstores
- Sales to government entities and qualifying nonprofits
South Carolina has a maximum tax of $500 on certain items including motor vehicles, motorcycles, boats, and aircraft.
Is SaaS taxable in South Carolina?
In South Carolina, SaaS is partially taxable. The following categories are taxable:
South Carolina's treatment of SaaS falls under communications services:
- SaaS — Application Service Provider (ASP): Charges for accessing and using software hosted by the provider are taxable as communications services.
- Prewritten software on tangible media: Taxable as tangible personal property.
- Custom software: May be exempt if developed specifically for a single customer.
The taxability of SaaS in South Carolina is based on its classification as a communications service rather than as tangible personal property. Consult a tax advisor for your specific product.
If you are uncertain about the taxability of your specific software product in South Carolina, consult with a tax specialist.
How can a business get a sales tax permit in South Carolina?
To obtain a sales tax permit in South Carolina, businesses need to register with the South Carolina Department of Revenue. Registration can be completed online through the MyDORWAY.
You will need to provide detailed information about your business, including business type, ownership details, and the nature of your business activities.
When should a business file sales tax in South Carolina?
Sales tax returns in South Carolina are generally due on the 20th day of the following month for the previous period. Based on your annual tax liability, you may qualify for a less frequent filing schedule:
- Quarterly filing: Available if your annual tax liability is below $1,200 (returns due 20th day of the month following the end of the quarter)
- Annual filing: Available if your annual tax liability is below $600 (returns due January 20th of the following year)
Note: South Carolina offers an enhanced discount for electronic filing (maximum $3,100 vs. lower cap for paper filing). Remote sellers who voluntarily register are allowed a maximum discount of $10,000 per fiscal year.
You can file your South Carolina sales tax return through the MyDORWAY at https://mydorway.dor.sc.gov/.
Does South Carolina offer a timely filing discount?
Yes, South Carolina offers a timely filing benefit for businesses that file and pay on time:
South Carolina provides a timely filing discount based on the amount of tax collected:
- 3% of the tax when the tax is less than $100
- 2% of the tax when the tax is $100 or more
- Maximum discount of $3,100 per return for electronic filers
Voluntarily registered remote sellers may receive a maximum discount of $10,000 per fiscal year. The discount applies only when the return is filed and paid by the due date.
What are the penalties for late filing in South Carolina?
South Carolina imposes the following penalties for non-compliance:
- Late filing penalty: 5% of the tax due per month (or part of a month), up to a maximum of 25%
- Late payment penalty: 0.5% per month of the unpaid tax, up to 25%
- Minimum penalty: $25 for failure to file, even if no tax is due
- Interest: Accrues on unpaid tax from the due date at the statutory rate
Penalties may be waived for reasonable cause.
Is shipping taxable in South Carolina?
In South Carolina, the taxability of shipping and handling depends on how the charge is presented. Generally: • Taxable: If the shipping charges are mandatory or included in the price of a taxable item. • Non-Taxable: If shipping is separately stated on the invoice and provided as an optional service to the customer. Note: If you ship a mix of taxable and non-taxable goods in South Carolina, the shipping charge must usually be prorated to determine the taxable portion. Confirm current rules with South Carolina Department of Revenue at https://dor.sc.gov/.
Does South Carolina have a Remote Seller program?
Remote sellers who are not legally required to collect South Carolina sales tax but who voluntarily register may receive an enhanced timely filing discount of up to $10,000 per fiscal year, providing a significant incentive for voluntary compliance.