South Carolina Business Taxes for LLCs
What taxes does an LLC pay in South Carolina? This guide covers state income tax, self-employment tax, sales tax, payroll withholding, and quarterly estimated payments — with the forms and deadlines you need.
Bizee Editorial Staff
Editorial Team
South Carolina LLC tax facts at a glance
Filing fee: $110 (Articles of Organization)
Processing time: [PROCESSING_TIME]
State agency: South Carolina Secretary of State
Annual report due: South Carolina does not require LLCs to file an annual report
State tax rate: No LLC-level state income tax for pass-through entities; individual members taxed at graduated rates up to 7%; C corp election taxed at flat 5%
South Carolina LLC tax overview
A South Carolina LLC is a pass-through entity by default, which means the LLC itself doesn't pay state or federal income tax. Instead, profits flow through to the members, who report their share on their own tax returns. Depending on how your LLC is structured, you may owe self-employment tax, South Carolina individual income tax, sales tax, and payroll withholding if you have employees.
How pass-through taxation works for South Carolina LLCs
Most South Carolina LLCs don't pay income tax at the entity level. The LLC's income passes through to its members, who report it on their own returns. How that works depends on how many members your LLC has and whether you've made a tax election.
Single-member LLC
A single-member LLC is treated as a disregarded entity by default. You report the LLC's income and expenses on your federal Form 1040 (Schedule C), and that income carries over to your South Carolina Form SC1040. The LLC files no separate state income tax return.
Multi-member LLC
A multi-member LLC is treated as a partnership by default. The LLC files an informational return — Form SC1065 with the South Carolina Department of Revenue and Form 1065 with the IRS — and issues a Schedule K-1 to each member. Members then report their share of income on their own SC1040 and federal Form 1040. South Carolina also allows a partnership to elect to pay a 3% entity-level tax on active trade or business income using Schedule I-435.
LLC taxed as an S Corporation
If your LLC has elected S Corporation status with the IRS, income still passes through to members, but you're required to pay yourself a reasonable W-2 salary. South Carolina follows the federal S Corp treatment for state income tax purposes. A tax professional can help you figure out whether an S Corp election makes sense for your situation.
LLC taxed as a C Corporation
An LLC that elects C Corporation treatment pays South Carolina corporate income tax at a flat 5% rate on South Carolina taxable income. It must file Form SC1120 by the 15th day of the fourth month after the close of its tax year. South Carolina also requires a corporate License Fee equal to 0.1% of capital and paid-in surplus plus $15, with a minimum of $25 per year.
Self-employment tax
If your South Carolina LLC is taxed as a sole proprietorship or partnership, you owe federal self-employment tax on your share of the LLC's net earnings. This is a federal tax — South Carolina doesn't add a separate self-employment tax on top of it.
The self-employment tax rate is 15.3% of net earnings — 12.4% for Social Security and 2.9% for Medicare. The Social Security portion applies only up to the annual wage base ($168,600 in 2024), while the 2.9% Medicare portion applies to all net earnings. You only owe self-employment tax if your net earnings from self-employment are at least $400 for the year. If they are, you file Schedule SE with your federal Form 1040. Most members of pass-through LLCs find this is one of the larger tax obligations they face — planning for it quarterly helps avoid a surprise bill in April.
South Carolina state income tax
South Carolina taxes individual income at graduated rates ranging from 0% to 7%. As a pass-through LLC member, your share of the LLC's income is included in your South Carolina taxable income and reported on Form SC1040. South Carolina generally starts from your federal adjusted gross income, then applies state-specific additions, subtractions, and credits.
South Carolina does not have a franchise tax on LLCs. There's no annual report requirement for LLCs either, which removes one compliance obligation that catches business owners off guard in other states.
South Carolina sales and use tax
South Carolina imposes a 6% state sales and use tax on the retail sale of tangible personal property and certain services. If your LLC sells taxable goods or services, you need to collect and remit this tax. Counties can add local sales taxes in 1% increments, so the effective rate your customers pay may be higher than 6% depending on where the sale is sourced.
Before making any taxable retail sales, your LLC must get a South Carolina Retail License. A separate license is required for each physical retail location. You register through the South Carolina Department of Revenue using the MyDORWAY Business Tax Application. If you sell in multiple counties, check the combined rate for each location — the state rate is fixed, but local add-ons vary.
Payroll taxes and withholding
If your LLC has employees, you're responsible for withholding South Carolina state income tax from their wages and remitting it to the South Carolina Department of Revenue. You'll also handle federal payroll obligations — withholding federal income tax, Social Security, and Medicare, and paying the employer's share of FICA.
To get started, register for a South Carolina withholding tax account through the MyDORWAY Business Tax Application. The state will issue a 9-digit Withholding File Number you'll use for all state payroll filings and payments. A tax professional can help you figure out your deposit schedule and filing frequency once you know your expected payroll volume.
Quarterly estimated tax payments
If you expect to owe at least $100 in South Carolina income tax after withholding and credits, you need to make quarterly estimated tax payments. For calendar-year filers, the due dates are April 15, June 15, September 15, and January 15 of the following year. You can pay using Form SC1040ES or through the MyDORWAY online portal.
Single-member and multi-member LLCs taxed as pass-through entities don't pay estimated taxes at the entity level — the members do, on their individual returns. If your LLC is taxed as a C Corporation and expects to owe $100 or more in South Carolina corporate income tax, the business itself makes estimated payments by the 15th day of the 4th, 6th, 9th, and 12th months of its tax year.
Local business licenses
South Carolina doesn't have a statewide business license for LLCs. Instead, licensing is handled at the local level — by the county or municipality where your business operates. Not every jurisdiction requires one, and requirements vary by location and business type.
Check with your specific county or city to find out whether a local business license applies to your LLC. The South Carolina Business One Stop website can help you identify the right licensing jurisdiction. If your business operates in Charleston, for example, the city has its own business license process separate from the county.
FAQ
It depends on how your LLC is classified. By default, a single-member LLC is a disregarded entity and a multi-member LLC is taxed as a partnership — in both cases, income passes through to the members, who report it on their own South Carolina Form SC1040 and federal Form 1040. The LLC itself doesn't pay South Carolina income tax at the entity level. If your LLC has elected C Corporation status, it pays South Carolina corporate income tax at a flat 5% rate and files Form SC1120.
Yes. South Carolina has a statewide sales and use tax of 6% on the retail sale of tangible personal property and certain services. Counties can add local sales taxes in 1% increments, so the combined rate your customers pay may be higher than 6% depending on the county. If your LLC makes taxable retail sales, you need a South Carolina Retail License before you start selling.
Yes. South Carolina taxes individual income at graduated rates ranging from 0% to 7%. As a pass-through LLC member, your share of the LLC's income is included in your South Carolina taxable income and reported on Form SC1040. South Carolina starts from your federal adjusted gross income and applies state-specific adjustments from there.
No. South Carolina does not impose a franchise tax on LLCs. LLCs taxed as C Corporations do owe an annual corporate License Fee — 0.1% of capital and paid-in surplus plus $15, with a $25 minimum — but that applies only to the C Corp election, not to pass-through LLCs.
Yes, in most cases. If you expect to owe at least $100 in South Carolina income tax after withholding and credits, you need to make quarterly estimated payments. For calendar-year filers, payments are due April 15, June 15, September 15, and January 15. You can pay using Form SC1040ES or through the MyDORWAY portal at dor.sc.gov.
Yes, if your LLC is taxed as a sole proprietorship or partnership. Self-employment tax is a federal tax — South Carolina doesn't add a separate layer on top of it. The federal self-employment tax rate is 15.3% of net earnings (12.4% for Social Security, 2.9% for Medicare). You owe it if your net earnings from self-employment are at least $400 for the year, and you file Schedule SE with your federal Form 1040.
The South Carolina Articles of Organization filing fee is $110, paid to the South Carolina Secretary of State. This is a one-time formation fee, not an annual tax. South Carolina does not require LLCs to file an annual report, so there's no recurring state filing fee after formation.
If your LLC has employees, you need to withhold South Carolina state income tax from their wages and remit it to the South Carolina Department of Revenue. You'll also handle federal payroll obligations — withholding federal income tax, Social Security, and Medicare, and paying the employer's share of FICA. Register for a South Carolina withholding tax account through the MyDORWAY Business Tax Application before your first payroll.
