State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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South-Carolina (SC)

SC Sales Tax - Name of Tax and General Application:

South Carolina imposes a tax on the business of selling tangible personal property at the retail level in the state. This tax is known as a "sales tax". In addition there is a tax imposed on use, storage or consumption of tangible personal property purchased at retail in the state. This tax is known as a "use tax" and only applies where sales tax has not been paid.

SC Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

South Carolina imposes nexus on the presence of intangible assets such as a trademark or the licensing of software. Sales made as a result of attendance at a trade show are taxable, regardless of any determination of nexus.

SC Local Tax - Do Localities Impose Tax?

Yes, South Carolina imposes local sales tax.

SC Resale Certificate Renewal Agreements:

Sales for resale are not taxable and are defined as "wholesale sales" which are not included in the taxable definition of a "retail sale." If a seller obtains a resale certificate from the purchaser, liability for the sales tax shifts to the purchaser.

SC Resale Certificate Renewal Periods

The exemption certificate remains in effect as long as the business is in operation.

SC Statute of Limitations

Later of three years from: the date the return was due or the date the return was filed. If tax is understated by 20% or more, the limitation period becomes the later of six years from: the date the return was due or the date the return was filed.