If your business makes sales to customers in South Carolina, you may be responsible for collecting and remitting sales tax to the state. Whether or not you need to do this depends largely on whether you have a substantial physical presence, or nexus, in the state, as well as whether or not what you’re selling is subject to sales tax under South Carolina laws.
The state sales tax rate in South Carolina is 6%. Counties and municipalities can impose additional sales tax locally as well, with the maximum rate in the state currently 8.5% in Charleston. You can review a complete list of sales tax rates in South Carolina by zip code on the South Carolina Department of Revenue website.
If you have a physical location, and the customer purchases an item in person and takes it with them on the spot, you will charge the rate applicable at that location. If you are shipping goods to customers in South Carolina, the rate you will need to charge is usually based on the final destination of those goods, regardless of whether they originate from inside or outside the state.
An buyer who is 85 years old or older may claim a 1% exemption state sales tax, provided that the purchase is made for his or her personal use. Proof of age must be provided at the time of the sale.
South Carolina considers a business to have a nexus in the state if it meets one of several main conditions, or a combination of other conditions. Although the specific details can get somewhat complicated for special situations, most businesses will either meet or not meet some of the main general requirements. These include:
One significant element to keep in mind is that there are two Amazon fulfillment centers in South Carolina. If your sales are fulfilled by Amazon, and you sell to customers in South Carolina, your goods are likely stored in one of these warehouses, thereby creating a nexus in the state for your business. Although there may still be some ambiguity surrounding this arrangement, any substantial sales that proceed in this way will likely be looked on by the state as taxable sales, and so you should register to collect sales tax in South Carolina if this applies to you.
It’s also important to note that nexus determinations are made on a fiscal year basis. So, if you have a nexus for any part of the fiscal year, you should collect sales tax on any purchases made during that time frame, even if you no longer meet the nexus requirements by the end of the period in question.
In general, sales of tangible personal property are subject to sales tax in South Carolina. Most services, on the other hand, are not unless they involve the production of a tangible good. Installation charges associated with the purchase of tangible personal property are not taxable if they’re listed separately on the bill, while set-up charges are taxable in similar situations.
Most groceries are not taxable, and this encompasses any food meant to be taken home and consumed. Items like beverages, snacks, and seasonings are included here, but hot, ready-to-eat foods are not. Other excluded items are:
Exceptions to the tax on prepared food items applies if these meals are served in a facility that cares for elderly or disabled persons, or when sold to certain non-profit organizations that have previously obtained a sales tax exemption certificate from the state. It’s also important to note that these exceptions and exemptions apply to the state sales tax, but local tax rates may still apply depending on the regulations in the specific municipality.
Although most services are not taxable in South Carolina, there are certain taxable categories. These include furnishing of accommodations, providing of electricity, laundry and dry cleaning services, and most communication services.
If you have a nexus in South Carolina and sell a taxable good, you must register with the state to collect and remit that tax before you start making sales. You can do this by visiting the Department of Revenue website and filling out the online form. While registering by mail is still an option, it is being phased out, and registering online is the preferred method going forward. The cost to register is $50.
To complete the registration process, you will have to provide certain details about your business including, but not limited to:
Other information may be required as well based on the nature of your business and your specific situation.
The frequency with which you’ll have to file your South Carolina state sales tax returns will depend on your average monthly tax liability. You may file annually if that average is between $0 and $16.66. Quarterly filing is required for an average tax liability of $16.67 to $100, and monthly filing is required if your monthly tax liability is over $100 on average.
|Period End||Due Date|
|January 31||February 20|
|February 28||March 20|
|March 31||April 20|
|April 30||May 20|
|May 31||June 20|
|June 30||July 20|
|July 31||August 20|
|August 31||September 20|
|September 30||October 20|
|October 31||November 20|
|November 30||December 20|
|December 31||January 20|
|Period End||Due Date|
|March 31 (Q1)||April 20th|
|June 30 (Q2)||July 20th|
|September 30 (Q3)||October 20th|
|December 31 (Q4)||January 20th|
If you file annually, your return and payment will be due on January 20 of the following year.
Failing to file a sales tax return once you’re registered to collect sales tax in South Carolina can result in a fine of 5% of the tax due if the return is filed within one month of the due date. An additional 5% will be added for each subsequent month, up to a maximum of 25%. If you file a return on time but are late with the payment, you’ll face a penalty of 0.5% for each month the payment is late.
South Carolina does require all registered businesses to submit zero returns for periods in which no sales tax was collected. Penalties will also apply if you fail to file this type of return.
As with any state, the specific rules and regulations governing who must collect sales tax in South Carolina and on what are subject to change at any time. Local rates also change regularly, with various municipalities adding or repealing new taxes or adding exemptions. Keeping track of all of this can be a challenge, especially if South Carolina is not the only state you do business in.
That’s why it’s quite helpful to have sales tax software designed to handle all of this and more. TaxTools is just such a program, and it provides a comprehensive solution to all your sales tax tracking and filing needs. The program is designed to regularly monitor and adjust to local changes in the tax code, and it will ensure you collect tax at the appropriate rate based on the destination of the products sold, whether that’s in South Carolina or another state.
TaxTools also makes it easy to see exactly how much you owe, when your returns are due, and what your payment history looks like. You can pull up reports on various areas quickly and easily, and it will integrate smoothly with whatever eCommerce platform you use.
So if you’re interested in learning more about how TaxTools can streamline your selling process and help you stay on top of local sales tax regulations, click here to learn more or sign up for a free trial today.