Sales Tax Guide for South Carolina

What Is Taxable in South Carolina?

In South Carolina, most tangible personal property is subject to sales tax. However, exemptions include prescription drugs, unprepared food, newspapers, and some manufacturing equipment.

If your business sells taxable goods or services, you are required to collect and remit sales tax accordingly. Additionally, businesses should be aware of use taxes for out-of-state purchases, which are applicable in certain situations.

Who Needs to Collect Sales Tax?

Businesses required to collect sales tax include:

• Retailers with a physical presence in South Carolina
• Online sellers that meet the state’s economic nexus threshold
• Certain service providers, based on service type

South Carolina enforces an economic nexus threshold of $100,000 in sales. If you exceed this limit, even without a physical presence in the state, you must register and collect sales tax. Avoiding this responsibility can result in penalties and back taxes, which is why doola’s Bookkeeping service can be crucial for compliance and peace of mind.

How to Register for a Sales Tax Permit in South Carolina

Obtaining a sales tax permit in South Carolina involves a few steps:

1. Collect necessary documents such as your EIN, business license, and basic business information.
2. Visit the South Carolina Department of Revenue website to access the registration form.
3. Submit the completed application online.
4. Receive your Sales Tax License and begin collecting tax.

It’s illegal to collect sales tax without a permit, so ensure you complete registration before initiating taxable sales. Assistance from doola’s bookkeeping team can ease the process by managing these bureaucratic tasks, allowing you to focus on business growth.

How to Calculate Sales Tax in South Carolina

For accurate sales tax calculation, follow these steps:

Step 1:
Identify the correct sales tax rate according to where your business and the purchaser are located.

Step 2:
Collect the right amount of tax at the time of sale.

Step 3:
Maintain detailed records of all sales transactions.

Filing frequency in South Carolina—monthly, quarterly, or annually—depends on your sales volume. Be aware of due dates to prevent late filing penalties. Businesses should also consider local sales tax rates imposed by specific counties or municipalities, which may affect collection and remittance.

Common Sales Tax Exemptions in South Carolina

Certain businesses and organizations in South Carolina can benefit from sales tax exemptions, including:

• Goods purchased for resale (using a resale certificate)
• Sales to nonprofit organizations
• Certain agricultural and industrial purchases

To make use of these exemptions, the appropriate certificates must be submitted, and businesses are responsible for keeping precise records. Improper use of exemption certificates can trigger audits and financial penalties.

Remote Seller and Marketplace Sales Tax Rules in South Carolina

For remote sellers and marketplaces like Amazon, eBay, Shopify, and Etsy, South Carolina has defined sales tax regulations.

The state mandates compliance with economic nexus standards once sales reach $100,000 in value. Remote sellers are bound to adhere to South Carolina’s tax regulations if these limits are surpassed.

Staying informed about sales tax responsibilities can be challenging, but it’s crucial for marketplace sellers to register and collect sales tax when they reach threshold levels.

What Triggers a Sales Tax Audit

The South Carolina Department of Revenue may conduct audits for various reasons, such as discrepancies in reported sales, late or missing filings, frequent discrepancies, and misuse of exemption certificates.

Reducing audit risk involves maintaining comprehensive records of all sales, tax exemptions, and payments. Periodic internal reviews can help ensure accuracy in tax filings and compliance with state regulations.

FAQs About Sales Tax in South Carolina

Here are some common questions regarding South Carolina sales tax:

Are digital goods taxable in South Carolina? 

Some digital goods are taxable, while others may be exempt. It’s important to consult state-specific guidelines.

Are out-of-state businesses required to collect South Carolina sales tax? 

Yes, if they surpass the $100,000 sales threshold.

What are the implications of overcharging or undercharging sales tax? 

Businesses may need to provide refunds to customers or settle the difference with the state. Keeping precise records helps avoid such errors.

Are services taxable in South Carolina? 

Most services are not subject to sales tax, with specific exceptions like accommodation and telecommunications services.

Stay Compliant With doola

Managing sales tax obligations can be complex, but staying informed and using the right resources ensures compliance and smooth operations.

doola offers guidance and resources to help you adhere to sales tax rules, assisting businesses with financial management, tax advice, and bookkeeping services.