2024 overview of sales tax in South Carolina

Welcome to Kintsugi's rundown on tax rates in the state of South Carolina. South Carolina's sales tax rates can vary depending on state, county/city, and local tax rates.

The base state sales tax South Carolina rate is 6%.

Counties can impose additional local sales taxes, which can range from 1% to 3%. For example, in Charleston County, the total car sales tax rate can be as high as 8%, while in Greenville County, it might be 7%.

Counties within the state can impose additional taxes, which results in varying rates. For example, the county with the lowest combined rate is Horry County at 6%, while Jasper County has the highest at 9%. Additionally, district rates can also fluctuate, with Charleston-Wilbur district having one of the lowest rates at 0% and the City of Charleston having one of the highest at 3%.

Sales tax range in South Carolina

In South Carolina, the state sales tax rate in 2024 remains consistent at 6%, the same as it was in 2023, providing a stable answer to the question of how much is South Carolina sales tax.

Specific car sales tax rules also apply when buying automobiles from an out-of-state dealership, especially regarding the car sales tax South Carolina. If South Carolina residents purchase a car outside the state and no sales tax is collected by the seller, the buyer is responsible for paying use tax upon registering the vehicle in South Carolina.

For those looking to purchase big-ticket items like automobiles, it's essential to understand the car sales tax in SC. Upon buying a vehicle out-of-state, South Carolina residents are required to pay a use tax equivalent to the state's standard sales tax rate plus any applicable local taxes when they register the vehicle in SC. This ensures that all vehicle purchases, whether in-state or out-of-state, are taxed fairly.

This use tax is equivalent to the total car sales tax that would have been applied if the vehicle was purchased within the state, and it's important to know how much is sales tax in South Carolina for accurate calculations. This ensures a level playing field between in-state and out-of-state purchases and helps fund local services.

Local jurisdictions, such as counties and municipalities, have the authority to impose additional local sales taxes, including the auto sales tax SC, which can result in varying total sales tax rates across different areas within the state. This stability indicates no significant adjustments in local sales taxes within the major counties from 2023 to 2024/

For 2024, the combined state and local sales tax rate in South Carolina ranges from 6% to 9%. This range reflects any county or municipal additional local sales taxes. For example:

• Charleston County: Total rate - 8%, state rate - 6%, local rate - 2%.
• Greenville County: Total rate - 7%, state rate - 6%, local rate - 1%.
• Horry County: Total rate - 7%, state rate - 6%, local rate - 1%.
• Richland County: Total rate - 8%, state rate - 6%, local rate - 2%.
• Lexington County: Total rate - 7%, state rate - 6%, local rate - 1%.

Calculating South Carolina sales tax

Determine the Taxable Amount: Calculate the sale amount of your product or service. Subtract any applicable discounts, exemptions, or deductions.

State Sales Tax Calculation: Apply South Carolina state sales tax rate of 6%.

Local Sales Tax: Check for additional local taxes which can range from 0% to 3%. Add the local tax rate to the state's 6% if applicable.

E-commerce Sales: State tax rate: 6%. Add local sales tax based on the delivery address.

For businesses selling goods and services online, knowing the intricacies of e-commerce sales tax in SC is vital. South Carolina imposes a state sales tax rate of 6%, and additional local taxes based on the delivery address may apply. This applies to all remote sellers meeting the economic nexus threshold, making it important for businesses to track their sales volumes and comply with state and local tax obligations.

Software as a Service (SaaS): Generally subject to the 6% state sales tax rate. Local tax might apply depending on the jurisdiction.

Services: Most services in South Carolina are not taxable. Verify if your specific service is exempt or taxable by state law.

Add Local and State Taxes: Combine the 6% state rate with any local rates to get the total rate. Example: 6% state + 2% local = 8%.

Calculate Final Sales Tax: Multiply the taxable amount by the total tax rate. Ensure to separate local and state portions for accurate accounting.

Collection and Remittance: Collect the calculated tax at the point of sale. Remit collected taxes to the South Carolina Department of Revenue as required by law.

For car dealerships, it is essential to calculate and remit sales tax accurately on the vehicles they sell. Dealerships must apply the combined state and local car sales tax rates to the sale price of each vehicle. Failure to do so can result in significant penalties and interest. To ensure compliance, dealerships should stay informed about any changes in applicable local and state tax rates and adhere to proper accounting practices.

Understanding use tax in South Carolina

Use tax in South Carolina, including SC sales tax on cars purchased out-of-state, is a tax on goods purchased out-of-state for use, storage, or consumption within the state. It complements the state's sales tax, with both usually set at the same rate. While sales tax is collected by in-state retailers at the point of sale, use tax applies to purchases made from out-of-state vendors who do not collect South Carolina sales tax.

If you buy an item from an out-of-state retailer, online, through a catalog, or while traveling, and no sales tax is collected, you owe use tax to South Carolina. The state's use tax rate is the same as the sales tax rate, which is 6%, but local taxes can increase this rate.

Residents and businesses alike are responsible for reporting and paying use tax, which considers any eligible deduction in the calculation. Businesses report use tax on their state tax return, while individuals may do so on their South Carolina Individual Income Tax Return (SC1040) or through a dedicated use tax form, the UT-3. This requirement ensures that out-of-state and in-state purchases receive equitable tax treatment, preventing an unfair advantage for out-of-state purchases.

For example, if you buy a computer from an out-of-state online retailer for $2,000 and no sales tax is collected at purchase, you owe South Carolina $120 in use tax (6%).

Compliance with use tax laws helps fund public services, including education and infrastructure, ensuring that all consumers support these essential services equitably. Understanding and paying use tax is vital for residents and businesses to avoid penalties and interest on unpaid taxes.

Recent changes to South Carolina sales tax

In 2024, the state of South Carolina implemented several changes to its sales tax policies compared to 2023. Here is a brief overview of those changes:

General State Sales Tax Rate: The general state sales tax rate remained consistent at 6% in 2024, unchanged from 2023.

Local Option Sales Taxes: Many counties in South Carolina saw adjustments in their local option sales taxes. For instance, Charleston County increased its local sales tax surcharge by 0.5% starting January 1, 2024, moving it from 1% in 2023 to 1.5% in 2024. This change primarily funds education and transportation projects.

Exemptions and Exclusions: In 2024, an important update to the list of exempt items included a broader range of environmentally friendly products. Items like solar panels and energy-efficient appliances, previously taxed at the full rate, began to see reduced rates or exemptions starting in July 2024.

Digital Goods: Changes were also made in the taxation of digital goods. As of June 2024, digital streaming services and online software subscriptions that were previously partially taxed are now fully subject to the 6% state sales tax. This adjustment aimed to account for the growing digital economy.

Holiday Sales Tax: The annual back-to-school tax holiday weekend saw no change in its duration but introduced more specific guidelines on eligible items. This update included clearer definitions on which electronics and school supplies qualify for tax exemptions, effective August 2024. This standardization aimed to resolve ambiguities present in 2023.

Excise and discretionary taxes and other sales tax considerations in South Carolina

Sales Tax

State Sales Tax Rate: South Carolina's base state sales tax rate is 6%.

Local Sales Tax: Local jurisdictions can impose additional sales taxes, which can vary by county. These local taxes typically range from 1% to 3% and can include:

• Local Option Sales Tax (LOST): Often used to reduce property taxes or fund specific projects.
• Capital Projects Sales Tax (CPST): Used for infrastructure or capital improvement projects.
• Education Capital Improvement Sales and Use Tax: Used to fund educational facilities and school-related capital projects.
• Transportation Sales Tax: Used to fund transportation-related projects.

Special Excise Taxes

Alcohol: Excise taxes are levied on alcoholic beverages. For example, beer is taxed at $0.77 per gallon, wine is taxed at $0.90 per gallon, and distilled spirits are taxed at a much higher rate, which could be up to $5.36 per gallon.

Cigarettes and Tobacco: Cigarettes have an excise tax of $0.57 per pack. Other tobacco products are taxed at 5% of the manufacturer's price.

Gasoline: Gasoline and diesel fuel are subject to an excise tax, currently set at $0.28 per gallon.

Use Tax

If you purchase goods out of state for use in South Carolina and did not pay sales tax at the time of purchase, you may owe use tax including SC state sales tax. The use tax rate is the same as the sales tax rate, including applicable local taxes.

Discretionary Taxes

Hospitality Tax: Some areas levy a hospitality tax on prepared meals and beverages, which can be around 2%. This tax is frequently seen in tourist-heavy areas.

Accommodations Tax: For short-term lodging (hotels, motels, etc.), there is a state accommodations tax rate of 2%, and additional local accommodations taxes can apply.

Property Taxes

South Carolina's property tax rates are generally lower compared to other states, but counties can apply millage rates to fund local services like schools, police, and fire departments.

Specific Considerations

Tax Holidays: South Carolina typically offers a sales tax holiday for back-to-school shopping, usually occurring in early August, during which certain items like clothing, footwear, school supplies, and computers are exempt from sales taxes.

Economic Development: There may also be specific local incentives and tax credits available for businesses, particularly in designated economic revitalization areas.

Understanding nexus in South Carolina for local and out-of-state sellers

Physical nexus

Physical nexus refers to the requirement for businesses to have a physical presence in a state to be obligated to collect and remit sales tax.

2024 Criteria

Having a business location: If a business operates an office, store, warehouse, or other place of business in the state, it establishes physical nexus.

Employees or representatives: Employing individuals in South Carolina or having salespeople, agents, or representatives operating within the state.

Property ownership or leasing: Owning or leasing property such as buildings, machinery, or inventory within the state.

Installation and services: Performing installation, maintenance, or service activities within South Carolina can also create a physical nexus.

Delivery in company vehicles: Using company-owned vehicles to deliver goods into the state.

2023 Comparison

Installation and services (clarification): While providing installations and services required nexus in 2023, more specific guidelines on the scope of these activities were clarified for 2024.

Delivery in company vehicles (expanded): In 2023, the criteria were less explicit about delivery methods. The 2024 update emphasizes that deliveries using company vehicles constitute nexus.

Economic nexus

Economic nexus determines a retailer's obligation to collect and remit sales tax based on the volume of sales or transactions rather than physical presence. Here is a brief on the economic nexus for sales tax in South Carolina for 2024 and a comparison with 2023:

South Carolina Economic Nexus in 2024

Threshold: Retailers are required to collect and remit sales tax if they have gross revenues exceeding $100,000 from sales of tangible personal property, products transferred electronically, and services delivered into the state.

Measurement Period: The threshold is calculated based on the preceding or current calendar year.

Registration Requirement: Out-of-state sellers who meet the economic nexus threshold must register for a South Carolina sales tax permit.

Tax Rate: The state sales tax rate remains 6%, with additional local taxes possibly applying.

Enforcement: The South Carolina Department of Revenue (SCDOR) enforces compliance through audits and penalties.

Marketplace Facilitators: Marketplace facilitators meeting the $100,000 threshold must collect and remit sales tax on behalf of third-party sellers.

Comparison with 2023

Threshold in 2023: The threshold for triggering economic nexus was also $100,000 in gross revenues.

Measurement Period in 2023: The calculation period was similarly based on the preceding or current calendar year.

Registration Requirement in 2023: The requirement for out-of-state sellers to register remained consistent with that of 2024.

Tax Rate in 2023: The state sales tax rate was 6% in 2023 as well.

Enforcement in 2023: SCDOR’s enforcement practices, including audits and penalties, were unchanged from 2023 to 2024.

Marketplace Facilitators in 2023: Marketplace facilitators with $100,000 or more in sales also had to collect and remit sales tax on behalf of third-party sellers in 2023.

Affiliate nexus

Affiliate Nexus for Sales Tax in South Carolina (2024)

In 2024, South Carolina continues to implement rules pertaining to affiliate nexus for sales tax. These rules determine whether out-of-state businesses must collect and remit sales tax based on their connections with in-state affiliates.

Key elements and changes from 2023 include:

Definition and Criteria

2023: Affiliates must maintain a physical presence, such as an office, warehouse, or employees, to establish nexus.

2024: The definition expands to include significant economic presence, meaning affiliates generating over $100,000 in gross revenue or conducting 200 separate transactions annually with South Carolina customers may establish nexus.

Economic Nexus Thresholds

2023: Businesses exceed $250,000 in sales or 200 transactions in a year to have nexus obligations.

2024: The threshold changes to $100,000 in gross sales or 200 transactions, aligning with economic presence criteria.

Affiliate Transactions and Activities

2023: Activities considered include those leading to in-state sales through referrals, distribution of flyers, or holding in-state property.

2024: Clarifications include digital advertising and online marketing by affiliates as nexus-creating activities.

Compliance Requirements

2023: Sellers with nexus must register, collect, and remit sales tax, and file periodic returns.

2024: Stricter reporting requirements and increased documentation standards for economic nexus compliance.

Penalties and Enforcement

2023: Penalties include fines and interest for non-compliance, with somewhat lenient enforcement for first-time offenders.

2024: Enhanced penalties for non-compliance, including higher fines and interest rates, aim to enforce stricter adherence to sales tax obligations.

Click-through nexus

In 2024, South Carolina's click-through nexus for sales tax involves specific criteria and thresholds similar to the previous year but with updated figures.

Affiliate Relationships: Like in 2023, businesses must collect sales tax if they have affiliates in South Carolina driving customers to their platform. For 2024, specific commission thresholds have increased to ensure ongoing compliance.

Sales Thresholds: In 2023, businesses meeting a specific sales threshold from South Carolinian customers had to register for sales tax collection. For 2024, these thresholds have been adjusted upwards to account for inflation and economic changes.

In-state Presence: The requirement for having a physical presence, including employees or offices in South Carolina, remains in force. Any direct or indirect action through affiliate programs still mandates sales tax collection in 2024, continuing from the 2023 standards.

Advertising: Sales tax nexus in 2023 applied to businesses generating sales through in-state advertising partners. These rules persist in 2024 but with slightly modified reporting and compliance expectations to address more diverse advertising channels.

Remote Sellers: Revenue thresholds for remote sellers have been updated for 2024. Companies previously not required to collect sales tax due to lower sales volumes may now find themselves obligated due to these revised economic nexus levels.

Enforcement: South Carolina has enhanced enforcement mechanisms in 2024 compared to 2023, aiming for stricter compliance through advanced auditing and monitoring systems.

Marketplace nexus

In 2024, South Carolina's marketplace nexus for sales tax continues to refine its approach following significant changes over recent years.

Here’s a comparison of the 2024 requirements with their 2023 counterparts:

Economic Threshold: In 2023, South Carolina enforced a threshold of $100,000 in gross sales or 200 transactions within the state. For 2024, the state has adjusted this to solely consider gross sales of $100,000, eliminating the transaction count criteria. This simplifies compliance, focusing only on revenue.

Marketplace Facilitators: In 2023, marketplace facilitators were required to collect and remit sales tax if they met the $100,000 sales or 200 transactions threshold. By 2024, facilitators are required to adhere to the revised sales threshold of $100,000, streamlining the process and aligning facilitators' obligations with those of individual sellers.

Remote Sellers: For remote sellers, the 2023 rules included the $100,000 or 200 transactions criteria for sales into South Carolina. The 2024 amendments align these sellers with the updated threshold, only considering gross revenue, thus simplifying compliance efforts.

Tax Collection and Remittance: In 2023, both marketplace facilitators and remote sellers had to navigate dual thresholds, which could be administratively burdensome. The 2024 regulations focus on a single, clear economic threshold, potentially reducing confusion and enhancing compliance rates.

Reporting Requirements: Reports in 2023 often required detailed transaction counts. The 2024 changes streamline reporting by eliminating the transaction count criteria, focusing on gross sales figures, making record-keeping more straightforward for businesses.

Trade shows

Trade shows in South Carolina in 2024 are subject to specific sales tax obligations. Key points:

• Vendors must generally register with the South Carolina Department of Revenue (SCDOR) to collect and remit state sales tax.
• Temporary vendors at tradeshows may be required to obtain a temporary retail license from the SCDOR.
• South Carolina's state sales tax rate is 6%, with possible additional local sales taxes.
• Taxes must be collected on tangible personal property sales, regardless of whether the vendor has a permanent business in the state.
• Services sold at tradeshows may also be subject to state sales tax depending on their nature.
• Vendors are responsible for maintaining accurate records of all sales transactions conducted at tradeshows.
• Filing and payment deadlines for sales taxes must be adhered to avoid penalties and interest.
• Sales tax returns can often be filed electronically through the SCDOR website.
• The SCDOR may conduct audits to ensure compliance with sales tax laws.
• Exemptions may apply for certain types of sales, including wholesale transactions, but documentation is required.

Fulfillment by Amazon and nexus

Fulfillment by Amazon (FBA) is a service offered by Amazon to third-party sellers where Amazon handles storage, packaging, shipping, and customer service for products. Sellers send their inventory to Amazon's fulfillment centers, and Amazon manages the logistics. This allows sellers to leverage Amazon's infrastructure and expertise, increasing efficiency and customer reach.

Sales Tax Nexus: Amazon has physical presence due to its fulfillment centers. This creates a sales tax nexus, making sellers potentially liable for collecting and remitting sales tax in South Carolina.

Marketplace Facilitator Law: As of 2019, Amazon is considered a marketplace facilitator in South Carolina, meaning it is required to collect and remit sales tax on behalf of third-party sellers for sales facilitated through its platform.

Sales Tax Collection by Amazon: Amazon automatically collects and remits South Carolina sales tax for FBA transactions. Sellers must ensure their tax settings are correctly configured in their Seller Central account to comply with this requirement.

Seller Registration: Despite Amazon's compliance, sellers may still need to register for a South Carolina retail license if conducting significant business independently outside Amazon. This ensures full compliance with state tax regulations.

Tax Filing: Sellers must maintain accurate records of their transactions and Amazon's remittances. They are responsible for filing any required returns with South Carolina's Department of Revenue and managing potential confusion due to Amazon's automated tax collection.

Exemptions and Documentation: Sellers should be aware of any tax exemptions applicable to their products and must retain documentation supporting tax-exempt sales to mitigate the risk of audits or discrepancies.

Permits, certificates and sales tax registration in South Carolina

To register for sales tax in South Carolina in 2024, businesses must obtain a Retail License from the South Carolina Department of Revenue. This involves submitting essential business information such as the legal name, address, and type of business activities. Registration can typically be completed online or by mail.

Registering for sales tax collection in South Carolina

To register for sales tax collection in South Carolina in 2024, follow these steps:

Determine Your Requirement: Confirm that your business must collect and remit sales tax, which generally applies if you sell tangible goods and certain services in South Carolina.

Gather Necessary Information: Prepare to provide information about your business, such as:

• Legal business name and DBA (if applicable).
• Federal Employer Identification Number (FEIN) or Social Security Number (SSN) for sole proprietors.
• Business address and contact details.
• Business structure (e.g., Sole Proprietorship, Partnership, Corporation, LLC).
• Detailed description of the business activities.
• Ownership details and responsible parties.

Registering Online: The South Carolina Department of Revenue (SCDOR) offers an online portal for business registrations. Go to the SCDOR’s official website and find the online business registration section. Create an account if you haven't already and follow the instructions to register for a sales tax permit.

Registering by Mail: If you prefer, you can complete the Business Tax Registration application, which can typically be downloaded from the SCDOR website, and mail it to their address. Make sure all sections of the form are filled out correctly and include any required attachments.

Receive Your Sales Tax Permit: Once your application is processed and approved, the SCDOR will issue your South Carolina sales tax permit. This permit authorizes you to collect sales tax from customers and it typically includes your South Carolina tax identification number.

Understand Your Obligations: Familiarize yourself with the responsibilities of collecting and remitting sales tax. You will have to file regular sales tax returns (monthly, quarterly, or annually, depending on your sales volume) and remit the tax collected to the state.

Keep Records: Maintain comprehensive records of all sales transactions, tax collected, and returns filed. This is important for compliance and in case of an audit.

Cost of registering for sales tax in South Carolina in 2024

In South Carolina, there is no fee required to register for a sales tax permit.

You can register through the South Carolina Department of Revenue (SCDOR) using their online services. Once registered, you will receive your sales tax license, allowing you to collect and remit sales taxes on taxable transactions.

Federal tax ID requirements for registering

In South Carolina, when you register for a sales tax permit, you generally need to provide an Employer Identification Number (EIN) if you have a business structure that requires one, such as an LLC, corporation, or partnership. Sole proprietors without employees may use their Social Security Number instead.

An EIN is essentially a Social Security Number for your business and is used for tax purposes. It is required for:

• Any business that has employees.
• Any business that operates as a corporation or partnership.
• Any business that files employment, excise, or alcohol, tobacco, and firearms tax returns.
• Any business that withholds taxes on income, other than wages, paid to a non-resident alien.
• Any business that has a Keogh plan (a tax-deferred pension plan).
• Any business involved with certain types of organizations such as trusts, estates, or non-profit organizations.

To register for an EIN, you can do so online at the IRS website. Here is the direct link for you to apply for an EIN: Apply for an EIN Online

Once you have your EIN, you can proceed with registering for a sales tax permit in South Carolina. You can register for a sales tax permit with the South Carolina Department of Revenue through their MyDORWAY portal. Here is the link to the MyDORWAY portal: South Carolina Department of Revenue - MyDORWAY

Streamlined sales tax program and South Carolina

As of October 2023, South Carolina is not a full member of the Streamlined Sales and Use Tax Agreement (SSUTA).

The SSUTA is an effort to simplify and modernize sales tax administration in order to make it easier for businesses to comply with sales tax regulations across different states.

Acquiring a business and registering for sales tax in South Carolina

If you're acquiring a business in South Carolina in 2024 and need to register for sales tax, you're required to complete several key steps:

Obtain a Federal Employer Identification Number (FEIN): If you don't already have one, you'll need to get a FEIN from the IRS as it is required for tax registration purposes.

File for a South Carolina Retail License: You’ll need to register for a retail license with the South Carolina Department of Revenue (SCDOR). This can be done online through the SCDOR's website or by completing the paper form ST-1 (Application for Retail License). Each physical location operating under your business may need its own license.

Provide Information about Your Business: When applying for the retail license, you will need to provide information including:

• The business name, address, and contact details.
• The type of products or services you plan to sell.
• The ownership structure of the business (sole proprietor, partnership, corporation, etc.).
• Details about the previous owner and the sale if you are acquiring an existing business.

Pay the Registration Fee: There is usually a fee for obtaining a retail license in South Carolina. As of the current requirements, the fee is $50 per location.

Register for E-File and E-Pay: South Carolina requires businesses to file sales tax returns and make payments electronically. You may need to register for these services on the SCDOR's MyDORWAY system.

Close the Previous Owner’s Accounts: Ensure that the previous owner has closed their sales tax accounts properly to avoid any liability for unpaid taxes. This includes filing a final sales tax return and paying all due amounts.

Keep Records: Maintain good records of your transactions, sales tax collected, and any resale certificates from customers who are purchasing items for resale. South Carolina requires businesses to keep these records for at least three years.

Once your registration is complete, you will receive your retail license, which must be displayed at your business location. Additionally, you are responsible for collecting and remitting sales tax on taxable sales made in South Carolina.

Other South Carolina registrations to consider

In South Carolina in 2024, aside from sales tax registration, there are several other potential registrations and licenses you might need to consider depending on the nature of your business:

Business License: Many municipalities in South Carolina require businesses to obtain a local business license to operate legally within their jurisdiction. Check with the city or county where your business is based for specific requirements.

Employer Identification Number (EIN): If you have employees or operate as a corporation or partnership, you’ll need to obtain an EIN from the IRS.

Withholding Tax Registration: If you have employees, you will need to register for withholding taxes with the South Carolina Department of Revenue.

Unemployment Insurance Tax: Employers in South Carolina may need to register for and pay unemployment insurance taxes to the South Carolina Department of Employment and Workforce.

Workers' Compensation Insurance: If you have employees, you might be required to obtain workers' compensation insurance.

Occupational Permits or Professional Licenses: Depending on your business type, you may need specific state or local occupational permits or professional licenses. For instance, professions such as healthcare, law, real estate, and construction often require specific licensing.

Retail License: If you are selling tangible personal property, you will need a retail license from the South Carolina Department of Revenue, even if you are already registered for sales tax.

Zoning Permits: Depending on where your business is located, you might need to adhere to local zoning requirements and obtain necessary permits.

Alcohol and Tobacco Licenses: If your business involves the sale of alcohol or tobacco products, you'll need the appropriate licenses from both state and federal authorities.

Health Permits: For businesses involved in food preparation or healthcare, you may need health permits from local health departments.

Environmental Permits: Businesses that impact the environment through activities such as waste disposal or emissions might need specific environmental permits.

Requirements for online sellers in South Carolina

In South Carolina, online sellers are required to collect and remit sales tax if they have a sufficient physical or economic presence in the state. For 2024, this means that if an online seller has:

Physical presence: This includes having a store, office, warehouse, or any other type of physical business location in South Carolina. It also covers having employees, sales representatives, or agents operating in the state.

Economic nexus: This applies if the seller's gross revenue from sales of tangible personal property, products transferred electronically, or services delivered into South Carolina exceeds $100,000 in a calendar year. This threshold subjects the seller to South Carolina's sales tax laws.

Sellers meeting either of these conditions must register with the South Carolina Department of Revenue, collect sales tax on taxable transactions, and remit the tax to the state. Failure to comply with these requirements can result in penalties and interest.

Collecting sales tax in South Carolina

In 2024, collecting sales tax in South Carolina involves understanding the state's specific tax rates, exemptions, and filing requirements. Businesses must comply with state guidelines to collect and remit sales tax accurately, ensuring transparency and adherence to regulations. This process is essential for legal and financial integrity.

Understanding origin vs. destination sales tax collection

South Carolina is an origin-based sales tax collection jurisdiction, meaning that sales tax is collected based on the location of the seller rather than the location of the buyer.

For further details, you can refer to the South Carolina Department of Revenue’s guidance on sales tax: https://dor.sc.gov/tax/sales

Taxable products in South Carolina

In South Carolina, sales tax is applied to a variety of product genres. Here's an overview of some of the main categories that generally incur sales tax:

Tangible Personal Property

This encompasses most physical goods, including but not limited to:

• Electronics (computers, smartphones, TVs)
• Appliances (refrigerators, washing machines)
• Furniture (sofas, beds, tables)
• Books
• Clothing
• Toys and games

Prepared Food and Beverages

• Restaurant meals
• Take-out food
• Catering services
• Certain pre-packaged foods if prepared for immediate consumption

Automobiles and Related Products

• New and used cars
• Motorcycles
• Boats
• Automotive parts and accessories

Household Supplies

• Cleaning products
• Paper goods
• Personal hygiene products

Building Materials and Home Improvement Goods

• Lumber
• Paint
• Hardware supplies

Health and Beauty Products

• Cosmetics
• Over-the-counter medications
• Health supplements

Pet Products

• Pet food
• Pet accessories

Entertainment and Recreational Goods

• Sporting goods
• Musical instruments
• Video games and consoles

Utilities

Sales tax can apply to certain utilities, like

• Electricity
• Natural gas

Digital Goods

Depending on state laws, sales tax may also apply to:

• E-books
• Digital music
• Streaming services

Common Sales Tax Exemptions in South Carolina:

For the most accurate and up-to-date information, please refer to the official website of the South Carolina Department of Revenue. Things are changing all the time, so please refer to the South Carolina Department of Revenue for more information about taxable items within South Carolina. Here’s the link: South Carolina Department of Revenue

Groceries: Unprepared food items for home consumption are generally exempt from sales tax.

Prescription Medications: Drugs prescribed by a physician are exempt.

Certain Medical Devices: Medical equipment such as wheelchairs and hearing aids may also be exempt.

Newspapers: Periodicals like newspapers are often exempt from sales tax.

Educational Materials: Some educational supplies and textbooks are also exempt, particularly if purchased by qualifying institutions.

Agricultural Supplies: Items directly used in farming may be exempt, such as certain feed and seed products.

Fuel: Specific types of fuel, like those used for agricultural purposes, may be exempt.

Is SaaS taxable in South Carolina?

In South Carolina, SaaS (Software as a Service) is generally considered taxable.

The state taxes the sale and use of software, including cloud-based services provided via SaaS models. Consequently, businesses should ensure compliance with state tax regulations when offering or utilizing SaaS products in South Carolina.

Are digital products taxable in South Carolina?

As of 2024, digital products in South Carolina, such as software downloads, e-books, and digital music, are subject to the state sales tax.

This includes any electronically transferred products that are used, consumed, or accessed within the state. Businesses selling such products must collect and remit sales tax accordingly.

Are services taxable in South Carolina?

In South Carolina, most services are generally not subject to sales tax.

However, certain services, such as telecommunications and accommodations, are taxable. It's crucial to review specific regulations, as taxability can vary based on the nature of the service provided.

Sales tax exemption certificates

In South Carolina, a sales tax exemption certificate allows qualifying businesses and individuals to purchase goods without paying state sales tax.

To obtain this certificate, applicants must provide information proving eligibility, such as documentation that they are engaged in manufacturing, agriculture, or nonprofit activities. The certificate must be presented to the seller at the time of purchase.

Sellers are required to keep these certificates on file to verify that the sales tax was not collected. Improper use or issuance of exemption certificates can result in penalties, including fines and back taxes. Regular renewals may be required to maintain exemption status.

State tax holidays in South Carolina for 2024

Sales tax holidays are temporary periods when sales taxes are not collected on certain items, usually back-to-school supplies or energy-efficient products.

For 2024, South Carolina's sales tax holiday is August 2-4.

Filing sales tax returns in South Carolina

Register for a Sales Tax License: Visit the South Carolina Department of Revenue (SCDOR) website to register your business.

Determine Filing Frequency: Based on your business’s taxable sales, determine if you need to file monthly, quarterly, or annually.

Collect Sales Tax: Collect the appropriate sales tax rate on all taxable sales in South Carolina.

Prepare Your Sales Tax Return: Calculate total sales, taxable sales, and the amount of sales tax collected during the filing period.

File Your Return Online: Log in to MyDORWAY, SCDOR’s online filing system, to submit your sales tax return.

Pay Any Owed Sales Tax: Pay any sales tax owed electronically via MyDORWAY by the due date.

Keep Records: Maintain accurate records of all sales and taxes collected for a minimum of three years.

Check for Updates: Periodically review the SCDOR website for any changes in tax rates or filing requirements.

Sales tax filing frequency

In the state of South Carolina, businesses are required to file sales tax returns to report the sales taxes they've collected. The frequency of these filings can vary based on the amount of sales and tax liability a business incurs.

Primarily, businesses with a larger volume of taxable sales are required to file sales tax returns more frequently. If a business in South Carolina has an average monthly sales tax liability of $100 or less, it may be permitted to file on an annual basis. Businesses with a higher tax liability—more than $100 but less than $500 monthly—are often required to file quarterly. For those businesses whose sales tax liability exceeds $500 on a monthly basis, the state mandates monthly filings to ensure timely collection and remittance of taxes.

Additionally, the state may also necessitate more frequent filings for certain high-volume businesses. For example, businesses that consistently have a tax liability exceeding $20,000 in a quarter might be required to make accelerated or pre-paid filings, which are more frequent than the standard monthly filings.

It's essential for businesses to evaluate their sales and tax obligations accurately to determine the required filing frequency. Failure to file correctly and on time can result in penalties, interest, and other enforcement actions by the South Carolina Department of Revenue.

Filing when no sales tax has been collected

In South Carolina, if a business registered for sales tax fails to collect it, the business remains liable for the uncollected tax.

The state may conduct an audit to determine the owed amount, leading to penalties and interest on unpaid taxes. Non-compliance can result in further legal consequences, including fines and potential revocation of the business license.

Penalties for late filing and non-payment of sales taxes

In South Carolina, timely filing and payment of sales taxes are mandatory for businesses. Late filing of sales tax returns can result in penalties and interest. If a business does not file by the due date, the South Carolina Department of Revenue (SCDOR) imposes a penalty, often calculated as a percentage of the tax due, plus interest accruing daily until the return is filed and the taxes are paid.

Non-payment of sales taxes carries more severe consequences. If a business fails to remit collected sales taxes, it may face penalties, interest, and potential legal action. The SCDOR has authority to enforce collection through liens, levies, or garnishments of a business’s assets. Continuous non-compliance can lead to the revocation of the business’s retail license, making it illegal to continue operations.

Additionally, business owners can be held personally liable for unpaid sales taxes, further increasing the risk. Mitigating these risks requires prompt filing and payment of sales taxes, or proactively communicating with the SCDOR if financial hardships arise, as payment plans or other arrangements might be available.

Sales tax discounts and incentives

In 2024, South Carolina offers several sales tax incentives and discounts aimed at businesses to stimulate economic growth and attract investment. Here are some key points:

Manufacturing Equipment Exemption: Businesses involved in manufacturing can benefit from a sales tax exemption on equipment and machinery used in the production process. This covers items directly involved in manufacturing, processing, compounding, mining, or quarrying tangible personal property.

Sales Tax Cap on Certain Items: There is a sales tax cap on specific items such as machinery for research and development and materials used in manufacturing processes. This cap can significantly reduce the overall tax burden on large capital expenditures.

Goods for Resale Exemption: Purchases of goods intended for resale are exempt from sales tax. This is advantageous for retailers and wholesalers as it prevents tax from being levied multiple times on the same item.

Clean Energy Equipment Incentives: South Carolina provides incentives for businesses investing in renewable energy equipment. This includes sales tax exemptions on materials, machinery, and equipment used in solar, wind, and other clean energy projects.

Data Centers: For businesses operating data centers, South Carolina offers specific exemptions on electricity consumption and cooling equipment, provided they meet certain investment and employment thresholds.

Agricultural Exemptions: Businesses engaged in agricultural activities can benefit from exemptions on farm machinery, livestock, feed, and other necessary agricultural inputs.

2024 sales tax filing due dates for South Carolina

Coming soon.

Shipping and sales tax in South Carolina

When to pay tax on shipping in South Carolina

In South Carolina, as of the current tax rules, a business typically needs to consider sales tax on shipping charges if those charges are part of the sale of taxable tangible personal property. In general, the rules are as follows:

Shipping Charges Are Taxable: Shipping charges are subject to sales tax if the sale of the property being shipped is taxable and the shipping charges are not separately stated on the invoice. This means that if shipping costs are included in the price of the taxable goods, the entire amount (including the shipping cost) is subject to sales tax.

Separately Stated Shipping Charges May Be Non-Taxable: If the shipping charges are separately stated on the invoice, they may be exempt from sales tax, provided that they reflect actual shipping and handling costs.

Sales Tax on Combined Freight Charges: If a single charge is made for both the product and freight without separately stating the shipping cost, then the entire charge is subject to sales tax.

Different Scenarios:

• If the product is taxable and the shipping cost is included in the price: The entire price, including the shipping cost, is subject to sales tax.
• If the product is taxable and the shipping cost is separately stated: The shipping cost may not be subject to sales tax.
• If the product is non-taxable: There is no sales tax on shipping regardless of how it is stated.