Taxation in South Carolina
Updated on Tuesday 29th January 2019
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South Carolina is an appealing business destination to international investors who would like to set up their operations in this American state. Even though the formalities of incorporation are quite simple, it is best to talk to our team of company formation specialists in USA and find out more about the requirements in this matter. You should also observe the tax structure and the rules in this sense, in agreement with the registered entity in South Carolina.
What is the sales tax rate in South Carolina?
The general sales tax imposed on products and services on the market in South Carolina is set at 6% rate, with the reference that cities of this state can collect their own sales tax not exceeding 1% rate.
What is the corporate tax rate in South Carolina?
The corporate income tax is set at a flat rate of 5% and applied to traditional corporations in South Carolina. Foreign investors should also pay attention to the corporation license tax that applies to S and C corporations in the form of a franchise tax based on the net worth. In other words, this kind of tax is based on the capital surplus at a rate of one dollar for each $1,000 and an additional charge of $15. Foreign entrepreneurs should know that according to the South Carolina Income Tax Act the "active trade or business income or loss" of a limited liability company is levied at a 3% tax rate.
Taxation on personal income in South Carolina
Residents in South Carolina are subject to 6-brackets taxation on personal incomes as seen in the following table:
|Taxable Income||Tax Rate|
|Between $0 and $2,910||No tax|
|Between $2,911 and $5,820||3%|
|Between $5,821 and $8,730||4%|
|Between $8,731 and $11,640||5%|
|Between $11,641 and $14,550||6%|
|More than $14,551||7%|
It is important to know what are the taxes for your company established in South Carolina and an accountant can provide the needed information in this direction. Also, we invite you to read the general guide to company incorporation in South Carolina and find out more about the ways in which you can register a business in this American state. If you would like to start a business in USA, we kindly invite you to get in touch with our team of consultants.
What is nexus?
If your primary business is set in South Carolina and you also have operations in other American states, you might have nexus, meaning that you need to pay the taxes in those states too. The same thing is available to corporations located in other states but generating money in South Carolina. We remind that each American state has its own taxation regime, therefore, it is recommended to talk to your accountant and fulfill the requirements in tax matters if you have nexus. You should also know that the South Carolina Department of Revenue oversees the activities of taxpayers in this state and provides the needed tax form for each kind of business.
Short facts about taxes in South Carolina
The local government in South Carolina collects and manages the property tax, in compliance with the rules and regulations of the Department of Revenue in this state. A tax rate of 4% of the market value applies to primary residences and on the agricultural properties of citizens in South Carolina. As for the personal properties in South Carolina, these are levied with a tax rate of 10% of the income tax depreciated value. Property tax exemptions apply to disabled persons or seniors above 65 years of age. South Carolina imposes an excise tax of 5% on boats, motor vehicles, and motorcycles. It is good to know that there is no inheritance tax in South Carolina.
As for the capital gains registered in South Carolina, these are levied in two different ways: the short-term capital gains created in less than a year are levied just like the normal taxable income earlier described. The long-term capital gains are subject to a specific exemption, meaning that there are no taxes on 44% of the net capital gain. The cigarette tax, the gas tax and the alcohol tax are important fees imposed by the government in South Carolina. Knowing the tax regime for each type of business structure in USA will help the international entrepreneurs decide on the suitable entity that suits most of their needs. Also, the USA company formation is subject to no harsh bureaucracy, however, we invite you to talk to our specialists.
Let us remind you that if you want to open a company in USA, including South Carolina, you can easily get in touch with our team of company incorporation representatives in USA and find out the ways in which we can provide assistance and support for company formation.