Sales Tax Registration and Filing in South Carolina

Introduction

Navigating the complexities of sales tax registration and filing in South Carolina is crucial for businesses operating within the state. Understanding the process not only ensures compliance with state laws but also helps in avoiding potential penalties. This guide provides a comprehensive overview of the sales tax registration and filing process in South Carolina, including state-specific rules and frequently asked questions.

Registration Process

How to Register for Sales Tax in South Carolina

To legally collect sales tax in South Carolina, businesses must obtain a sales tax permit. The registration process can be completed through several methods:

1. Online Registration: The most convenient way to register is through the South Carolina Department of Revenue's MyDORWAY portal. This online service allows businesses to apply for a retail license quickly and efficiently.
2. Mail Registration: Businesses can also register by completing Form SCDOR-111 and mailing it to the South Carolina Department of Revenue. The form is available on the department's website.
3. In-Person Registration: For those who prefer face-to-face interaction, registration can be done at one of the South Carolina Department of Revenue's service centers located in cities like Charleston, Columbia, Florence, Greenville, Myrtle Beach, and Rock Hill.

Required Information

When registering, businesses need to provide the following information:

• Business name and type
• Physical and mailing addresses
• Type of ownership (e.g., sole proprietorship, partnership, corporation)
• Names of business owners, partners, or corporate officers

Registration Fee

There is a $50 fee to register for a sales tax permit in South Carolina. Additional business registration fees may apply depending on the nature of the business.

Filing Process

How to File Sales Tax in South Carolina

Once registered, businesses must regularly file sales tax returns. The filing process involves three main steps:

1. Calculate Sales Tax Owed: Businesses must determine the amount of sales tax collected from customers. This can be done using sales tax reports from platforms like Cove, which integrate with sales channels to provide accurate calculations.
2. File Sales Tax Return: Returns can be filed online through the MyDORWAY portal. This system allows for easy submission and tracking of sales tax returns.
3. Make Payment: Payments can be made electronically through the MyDORWAY system. Businesses can also opt for services like Cove's AutoFile, which automates the filing and payment process.

Filing Frequency

The frequency of filing sales tax returns in South Carolina depends on the volume of sales tax collected:

• Monthly: For businesses with high sales volumes.
• Quarterly: For moderate sales volumes.
• Annually: For businesses with low sales volumes.

Sales tax returns are due on the 20th of the month following the reporting period. If the due date falls on a weekend or holiday, the deadline is extended to the next business day.

State-Specific Rules

Sales Tax Rate

South Carolina has a statewide sales tax rate of 6%. However, local jurisdictions may impose additional sales taxes, which can vary by county.

Nexus Rules

Businesses must collect sales tax if they have a nexus in South Carolina. Nexus can be established through:

• Physical presence, such as an office or warehouse
• Economic presence, defined as exceeding $100,000 in sales annually

Taxable Goods and Services

Most tangible personal property and certain services are taxable in South Carolina. Notable exemptions include certain groceries, prescription medications, and machinery used in research and development.

Shipping Charges

Shipping charges are taxable if they are part of the sale of taxable goods. Businesses must include these charges when calculating sales tax owed.

FAQs

Do I need a sales tax permit for online sales in South Carolina?

Yes, if you have a nexus in South Carolina, you must obtain a sales tax permit and collect sales tax on online sales to customers in the state.

How do I know if I have a nexus in South Carolina?

You have a nexus if you have a physical presence, such as an office or employees, or if you exceed the economic threshold of $100,000 in sales annually.

What happens if I miss a sales tax filing deadline?

Missing a filing deadline can result in penalties and interest charges. It's important to file and pay on time to avoid these additional costs.

Can I file sales tax returns manually?

While manual filing is possible, it is recommended to use the MyDORWAY portal for efficiency and accuracy.

Are there any exemptions to sales tax in South Carolina?

Yes, certain items like prescription medications and some groceries are exempt from sales tax. It's important to check the specific exemptions applicable to your business.

By understanding and following the sales tax registration and filing processes in South Carolina, businesses can ensure compliance and avoid potential legal issues. For more detailed guidance, consulting with a tax professional or the South Carolina Department of Revenue is advisable.