South Carolina State Tax Guide for Businesses & Individuals 2026
South Carolina offers a business-friendly tax climate with a competitive flat corporate income tax rate and a straightforward sales tax structure. This guide covers everything you need to know about South Carolina state taxes, from nexus rules and income tax brackets to payroll obligations, property tax, and key filing deadlines for 2026.
Quick Reference: South Carolina Tax Rates at a Glance
| Tax Type | Rate / Detail |
|---|
| State Corporate Income Tax | 5% (flat rate) |
| State Individual Income Tax | 0% – 6.4% (graduated brackets for 2026) |
| State Sales Tax Base Rate | 6% |
| Average Combined Sales Tax | ~7.44% (state + local) |
| SUI/SUTA Rate Range | 0.06% – 5.46%; New employer: 0.55% |
| Effective Property Tax Rate | ~0.57% (average — among lowest in the US) |
| Estate / Inheritance Tax | No |
South Carolina Business Tax Nexus
What is Tax Nexus in South Carolina?
Nexus determines whether a business has a sufficient connection to South Carolina to be subject to state tax collection and filing obligations. South Carolina enforces both physical and economic nexus standards for income, sales, and use tax purposes.
Physical Nexus
- Maintaining an office, store, or place of business in South Carolina
- Having employees, agents, or independent contractors operating in the state
- Storing inventory in South Carolina, including fulfillment through third-party warehouses (FBA)
- Operating vehicles or equipment within state borders
- Owning or leasing real or personal property in South Carolina
Economic Nexus (Remote Sellers)
| Threshold Type | Detail |
|---|
| Sales Threshold | $100,000 in South Carolina sales in the prior or current calendar year |
| Transaction Count Threshold | No transaction count threshold — sales dollar amount only |
| Effective Date | November 1, 2018 |
Click-Through & Affiliate Nexus
South Carolina enforces click-through and affiliate nexus. An out-of-state seller that enters into agreements with South Carolina residents to refer customers — and generates more than $10,000 in annual sales from those referrals — is considered to have nexus and must collect and remit sales tax.
South Carolina State Income Tax
Corporate Income Tax
| Taxable Income | Rate |
|---|
| All taxable income | 5% (flat rate) |
- Apportionment Formula: Single sales factor (effective for tax years beginning on or after January 1, 2020)
- Combined/Unitary Reporting: South Carolina does not require combined/unitary reporting; separate entity filing is standard
- Minimum Tax: No minimum corporate income tax in South Carolina
- License Fee: Corporations pay an annual License Fee of $15 plus $1 per $1,000 of capital stock and paid-in surplus, minimum $25
Individual Income Tax
| Taxable Income | Rate |
|---|
| $0 – $3,460 | 0% |
| $3,461 – $6,920 | 3% |
| $6,921 – $10,380 | 4% |
| $10,381 – $13,840 | 5% |
| $13,841 – $17,330 | 6% |
| Over $17,330 | 6.4% |
- Standard Deduction: $13,850 (Single); $27,700 (Married Filing Jointly) — conforms to federal amounts for 2026
- Personal Exemption: $4,610 per taxpayer (indexed annually)
- Federal Tax Code Conformity: South Carolina uses static conformity — it conforms to the IRC as of a specific date, with periodic legislative updates
Filing Deadlines
| Filing Type | Due Date |
|---|
| Corporate Return (SC1120) | 15th day of 4th month after fiscal year end (April 15 for calendar year filers) |
| Individual Return (SC1040) | April 15 |
| Extension Period | 6 months (to October 15 for individuals; to October 15 for corporations) |
| Estimated Payments (Individuals) | April 15, June 15, September 15, January 15 |
| Estimated Payments (Corporations) | April 15, June 15, September 15, December 15 |
South Carolina Sales Tax
State Sales Tax Rate
South Carolina's state sales tax rate is 6%. When combined with local (county) taxes, the average combined rate is approximately 7.44%. Local option taxes can add up to 3% depending on jurisdiction.
Taxable vs. Exempt Goods & Services
| Category | Status | Note |
|---|
| Tangible Personal Property | ✅ Taxable | Most physical goods are subject to state and local sales tax |
| SaaS / Digital Products | ⚠️ Partial | Prewritten software is taxable; SaaS and custom software taxability depends on delivery method and use |
| Groceries / Food | ⚠️ Partial | Unprepared food is exempt from the state 6% tax; local option taxes may still apply |
| Prescription Drugs | ❌ Exempt | Prescription medicines are fully exempt from South Carolina sales tax |
| Clothing | ✅ Taxable | All clothing and apparel are subject to state and local sales tax |
| Manufacturing Equipment | ⚠️ Partial | Machinery and equipment used directly in manufacturing may qualify for a reduced rate or exemption with proper documentation |
| Professional Services | ❌ Exempt | Most professional services (legal, accounting, consulting) are not subject to sales tax |
Sales Tax Permits & Registration
- Registering Agency: South Carolina Department of Revenue (SCDOR) — dor.sc.gov
- Cost to Register: No fee to obtain a retail license for the first location; $50 per additional location
- Renewal Requirement: Retail licenses must be renewed annually; renewal fee applies
Filing Frequency & Deadlines
| Annual Tax Liability | Filing Frequency | Due Date |
|---|
| Less than $100/month average | Annual | January 20 of following year |
| $100 – $999/month average | Quarterly | 20th day of month following quarter end |
| $1,000 or more/month average | Monthly | 20th day of following month |
Local Sales Tax Rates (Top 5 Jurisdictions)
| Jurisdiction | Local Rate | Combined Rate |
|---|
| Charleston (Charleston County) | 1% | 7% |
| Columbia (Richland County) | 2% | 8% |
| Greenville (Greenville County) | 1% | 7% |
| Myrtle Beach (Horry County) | 2.5% | 8.5% |
| Rock Hill (York County) | 2% | 8% |
South Carolina Payroll Tax & Compliance
Employer Payroll Tax Obligations
| Tax / Obligation | Detail |
|---|
| State Income Tax Withholding | Graduated 0% – 6.4% based on employee's SC W-4 (Form SC W-4) |
| SUI/SUTA Rate Range | 0.06% – 5.46% on first $14,000 of wages per employee |
| New Employer SUI Rate | 0.55% (standard new employer rate for 2026) |
| Workers' Compensation | Required for employers with 4 or more employees; private insurance or self-insurance through SC Workers' Compensation Commission |
| Paid Family & Medical Leave | Not applicable — South Carolina does not have a state-mandated PFML program |
| State Disability Insurance | Not applicable — South Carolina does not levy SDI |
Withholding Registration & Filing
- Registration Agency: South Carolina Department of Revenue — dor.sc.gov
- Filing Frequency: Monthly filers — due by the 15th of the following month; quarterly filers — due by the last day of the month following the quarter; annual filers — due January 31
- Annual Reconciliation Deadline: January 31 (Form WH-1606 — Annual Withholding Reconciliation)
- New Hire Reporting Deadline: Within 20 days of hire; report to the South Carolina New Hire Reporting Program
Minimum Wage
| Category | Rate |
|---|
| Standard Minimum Wage | $7.25/hour (follows federal minimum wage — no state minimum) |
| Tipped Employee Rate | $2.13/hour (federal tipped minimum; employer must ensure total wages meet $7.25) |
| Youth / Training Wage | $4.25/hour for employees under 20 during first 90 days of employment |
| Next Scheduled Increase | No increase currently scheduled; follows federal law |
South Carolina Property Tax
- Assessment Ratio: 4% of fair market value (owner-occupied residential); 6% (other real property and personal property); 10.5% (commercial/industrial)
- Effective Average Rate: ~0.57% of fair market value — one of the lowest in the United States
- Assessment Cycle: Countywide reassessments occur every 5 years; values may be adjusted upon transfer or new construction
- Appeal Deadline: Within 90 days of receiving the assessment notice; appeal filed with the county assessor or Board of Assessment Appeals
Business Personal Property Tax
- South Carolina taxes business personal property including furniture, fixtures, equipment, and machinery
- Form: PT-300 (Business Personal Property Return)
- Filing Deadline: April 30 annually (or within 4 months of fiscal year end)
- Exemption Threshold: Personal property valued under $500 per taxpayer may qualify for de minimis exemption depending on county
Homestead & Other Exemptions
| Exemption Type | Amount / Benefit | Eligibility |
|---|
| Homestead Exemption | $50,000 reduction in fair market value | South Carolina residents age 65+, totally disabled, or legally blind who own and occupy their home |
| Legal Residence | 4% assessment ratio (vs. 6% for non-primary) | Owner-occupied primary residence; application required with county assessor |
| Veteran / Disabled | Full exemption on primary residence | 100% service-connected disabled veterans or surviving spouse; must apply with county |
| Agricultural Land | Assessed at use value (agricultural productivity value) | Land actively used for agricultural purposes for 3+ years; application required |
Property Tax Due Dates
| Installment | Due Date | Discount / Penalty |
|---|
| Full Year Payment | January 15 of following year | No penalty if paid by January 15 |
| Penalty Period Begins | February 1 | 3% penalty added after January 15 |
| Early Payment Discount | No formal early discount | Timely payment avoids all penalties and interest |
Other Key South Carolina Taxes
Franchise / Privilege Tax
- Exists: Yes — South Carolina imposes an annual License Fee (also referred to as a privilege tax) on corporations doing business in the state
- Rate: $1 per $1,000 of capital stock and paid-in surplus attributable to South Carolina
- Base: Capital stock and paid-in surplus
- Minimum Amount: $25 per year
- Due Date: Filed with the corporate income tax return; April 15 for calendar year filers
Gross Receipts Tax
South Carolina does not impose a general statewide gross receipts tax. Certain industries, such as telecommunications, may be subject to specific gross receipts-based levies, but these are sector-specific and not broadly applied.
Excise Taxes
| Product | Rate |
|---|
| Gasoline | $0.28 per gallon |
| Diesel | $0.28 per gallon |
| Cigarettes | $0.57 per pack (20 cigarettes) |
| Beer | $0.77 per gallon |
| Wine | $0.90 per gallon (table wine); $1.08 per gallon (sparkling wine) |
| Cannabis | Not applicable — recreational cannabis is not legal in South Carolina |
South Carolina Tax Credits & Incentives
| Credit / Incentive | Value / Rate | Eligibility |
|---|
| Job Tax Credit | $1,500 – $25,000 per new job per year (up to 5 years) | Businesses creating new full-time jobs in eligible industries; credit amount varies by county designation |
| Research & Development Tax Credit | 5% of qualifying R&D expenditures above the base amount | Businesses conducting qualified research in South Carolina; credit applied against corporate income tax |
| Corporate Headquarters Credit | 20% of cost of establishing SC headquarters | Companies relocating or establishing a corporate headquarters in South Carolina |
| Historic Rehabilitation Tax Credit | 10% – 25% of certified rehabilitation expenditures | Certified historic structures in South Carolina undergoing qualified rehabilitation projects |
| Film Production Credit | Up to 35% of SC production expenditures | Film, TV, and digital productions spending qualifying amounts on South Carolina goods, services, and wages |
| Port Volume Increase Credit | Up to $0.01 per pound of goods transported | Businesses that increase port cargo volume through SC ports by 5% or more above prior year baseline |
| SC Earned Income Tax Credit | 125% of federal EITC amount (refundable) | South Carolina residents who qualify for and claim the federal Earned Income Tax Credit |
How to Register a Business in South Carolina
- Choose Your Business Structure: Select from LLC, Corporation, Partnership, or Sole Proprietorship based on liability protection and tax treatment needs.
- Register with the South Carolina Secretary of State: File Articles of Organization (LLC) or Articles of Incorporation (Corporation) online at sos.sc.gov. Filing fees start at $110 for LLCs and $135 for corporations.
- Obtain a Federal EIN: Apply for an Employer Identification Number from the IRS at irs.gov — free and instant online.
- Register for State Tax Accounts: Register with the South Carolina Department of Revenue for state withholding tax, retail license (sales tax), and use tax via the MyDORWAY portal at mydorway.dor.sc.gov.
- Register for Unemployment Insurance: Register with the South Carolina Department of Employment and Workforce (DEW) at dew.sc.gov if you have employees.
- Obtain Required Licenses & Permits: Check for industry-specific state licenses through the South Carolina Department of Labor, Licensing and Regulation (LLR) at llr.sc.gov.
- Register for a Local Business License: Contact the city or county business licensing office in your operating jurisdiction to obtain any required local business licenses or privilege taxes.
Key South Carolina Tax Agencies & Resources
| Agency | Responsibility | Website |
|---|
| South Carolina Department of Revenue (SCDOR) | State income tax, sales tax, withholding, corporate license fee, excise taxes | dor.sc.gov |
| SC Department of Employment and Workforce (DEW) | Unemployment insurance (SUI/SUTA), new hire reporting, workforce programs | dew.sc.gov |
| South Carolina Secretary of State | Business registration, filings, annual reports, entity management | sos.sc.gov |
| SC Workers' Compensation Commission | Workers' comp compliance, claims, employer obligations | wcc.sc.gov |
| SC Administrative Law Court | Tax appeals, dispute resolution, assessment challenges | scalc.net |
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Note: This guide is for informational purposes only and does not constitute legal or tax advice. Consult a licensed tax professional for advice specific to your situation.
