For entrepreneurs evaluating South Carolina as a business location in 2026, the tax landscape is a key factor. With a state sales tax of 6% and potential local additions of up to 3%, the combined rate can reach 9.00%.
Economic Nexus in South Carolina
Remote sellers must collect South Carolina sales tax if they exceed $100,000 in annual sales within the state. This threshold has been in effect since 2019-11-01. Marketplace facilitators like Amazon and Etsy are also required to collect and remit tax on behalf of third-party sellers. The South Carolina Department of Revenue enforces these provisions and provides registration guidance at https://dor.sc.gov.
LLC Formation in South Carolina (2026)
Forming an LLC in South Carolina costs $110 for the initial filing. There is no annual franchise tax, keeping ongoing costs low. South Carolina imposes a state income tax, which affects pass-through LLC taxation.
The process involves filing Articles of Organization with the Secretary of State, obtaining a federal EIN, and registering for applicable state tax accounts. You will also need a sales tax permit from the South Carolina Department of Revenue.
Key Tax Rules
• South Carolina has a 6% state sales tax rate.
• Local taxes can add up to 3%, for combined rates up to 9%.
• Groceries are exempt from state sales tax but subject to local taxes.
• Economic nexus threshold is $100,000 in annual sales.
Sales Tax Exemptions
The following categories are generally exempt from sales tax in South Carolina: groceries, prescription drugs, medical devices. Businesses should maintain proper documentation for exempt transactions.