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South Carolina Sales Tax 2022 For Businesses: A Complete Guide

“The sales tax for businesses in South Carolina is 6%”

What Does The South Carolina Sales Tax For Businesses Mean?

You must collect and pay sales tax if your LLC sells goods to customers in South Carolina. This means you’ll have to register with the South Carolina Department of Revenue for this purpose and then pay sales tax on goods sold on a regular basis. You have the option of registering online or on paper (Form SCTC-111). A sales tax license will be supplied to you once you’ve registered. Then you must file sales tax returns with the DOR on a regular basis (typically monthly or quarterly). This can be done either by mail (Form ST-3) or online (Form ST-3).

How Much Is The Sales Tax For Businesses In South Carolina?

South Carolina has a 6% state sales tax and permits local governments to collect a 3 percent local choice sales tax. There are 120 local tax jurisdictions in the state, collecting an average of 1.662 percent in local taxes. The highest sales tax rate in South Carolina is 9% in the cities of Myrtle Beach, Summerville, Charleston, Mount Pleasant, and Goose Creek when combined with the state sales tax (and 33 other cities).

South Carolina Sales Tax

Threshold Limit

6%

$100,000 economic sales threshold limit

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If you have nexus in South Carolina, you must collect sales and use tax. When it comes to nexus, sellers can be linked to a state in two ways: physically or economically. Physical nexus refers to having sufficient tangible presence or activity in a state to justify paying sales tax there. An economic nexus is established when a company’s income or transactions exceed the state’s economic threshold.

Therefore, this is what the South Carolina sales tax for businesses is all about. Now, the question arises: what types of goods and services are taxable under South Carolina sales tax. Let’s see.

What Types Of Goods And Services Are Taxable Under South Carolina Sales Tax?

Transactions

Except for prescription pharmaceuticals, some medical devices, and machinery and chemicals used in the research and development process, all physical products in South Carolina are taxable.

This means that while a person selling books in South Carolina would be compelled to charge sales tax, a person selling medical gadgets might not.

Traditional Goods or Services

Physical items, such as furniture, home appliances, and automobiles, are all subject to sales tax in South Carolina. Prescription drugs, groceries, and gasoline are all excluded from paying sales taxes.

Digital Goods or Services

A digital good or service is anything that is provided electronically, such as music purchased on iTunes or a movie purchased on Amazon.

Businesses in South Carolina are not required to collect sales tax on digital goods or services.

There is one exception to this rule in South Carolina. On pre-written computer software offered online, businesses must collect sales tax.

Services

In South Carolina, services are normally not taxable, so if you’re a freelance writer or a plumber, you won’t have to worry about sales tax unless the services you give entail making or manufacturing a product, in which case there will be a tax levied on the products.

Many states have specific sales tax rates or completely exempt some types of goods from paying sales tax. Here’s how South Carolina levies taxes on five often excluded items:

Goods or Services

Taxability

Clothing 

6%

Groceries 

Exempt

Prepared Food

11%

Prescription Drugs

Exempt

OTC Drugs 

6%

Therefore, if you deal in any of these goods or services, you are subject to pay sales tax in South Carolina. Now, let’s move on to see the tax collection and tax filing procedure in South Carolina.

Read More: California Sales Tax 2022 For Business: A Complete Guide

Tax Collection

If you receive your seller’s permit and start your business, you’ll need to decide how much sales tax to charge your clients. It’s critical for business owners to collect the correct sales tax rate to avoid fines and costly audits. 

You must account for the following types of sales when calculating sales tax:

  • Store Sales- For traditional businesses selling goods or services on-site, determining sales tax is easy: all sales are taxed based on the store’s location.
  • In-State Sales- The state of South Carolina has adopted a destination-based sales tax policy. This means long-distance sales within South Carolina are taxed based on the buyer’s address. This regulation applies to sales taxes collected by the state, county, and city.
  • Out-of-state Sales- Businesses with nexus in other states are only required to pay sales tax on out-of-state transactions. The term “nexus” refers to a company’s physical presence in another state.

Tax Filing

You’re ready to file your sales tax return now that you’ve applied for your South Carolina seller’s permit and learned how to charge the correct amount of sales tax to all of your clients. You avoid penalties and fines and make sure to meet all filing dates.

Businesses in South Carolina are required to file sales tax returns and make payments online.

How often do you need to file the sales tax return in South Carolina?

For the first six months of their operation, all businesses in South Carolina must pay sales tax on a monthly basis. The State will review your account at the end of the year to see if you are qualified to pay sales tax quarterly or monthly.

What If You Fail To File Sales Tax Before The Due Date?

Filing Deadlines

The deadline for all South Carolina sales tax returns is the 20th of the month unless it is a weekend or federal holiday, in which case it is postponed to the next business day.

Penalties

A late filing penalty of 5% per month is imposed in South Carolina. A late payment penalty of 0.5 percent per month is also imposed in South Carolina. The state charges a 0.25 percent interest rate on unpaid taxes, which is compounded daily until all sales taxes are paid.

Need Assistance With South Carolina Sales Tax

At Freecashflow.io, we’re dedicated to helping internet entrepreneurs with tax and accounting concerns. Warner Brothers, Ernst & Young, and Paramount Pictures are just a few of the multibillion-dollar companies with whom our firm has worked. You can count on us for tax and accounting help. Please do not hesitate to contact us if you have any questions or concerns.

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