What taxes apply to a new small business?

Taxes for New Small Businesses in South Carolina

When starting a small business in South Carolina, understanding your tax obligations is essential for smooth operations and compliance. Below are the key taxes that typically apply to new small businesses in the state.

State Income Tax

South Carolina imposes a state income tax on business earnings. The specific tax treatment depends on your business structure:

• Corporations: Subject to South Carolina corporate income tax on net income.
• Pass-through entities (LLCs, S-Corps, Partnerships): Income typically passes through to owners’ personal tax returns and is taxed at individual rates.

Sales and Use Tax

If your business sells tangible goods or certain services, you must collect and remit South Carolina sales tax. Key points include:

• Current state sales tax rate is 6%, with possible additional local taxes.
• Register for a sales tax license through the South Carolina Department of Revenue.
• Maintain accurate sales records and file periodic sales tax returns.

Employment Taxes

If you hire employees in South Carolina, you will need to manage payroll taxes, including:

• State withholding tax: Withhold South Carolina income tax from employee wages.
• Unemployment insurance tax: Register with the South Carolina Department of Employment and Workforce and pay unemployment taxes based on your payroll.
• Federal payroll taxes: Include Social Security, Medicare, and federal withholding.

Other Relevant Taxes

• Property Tax: If your business owns real or personal property, you may owe local property taxes.
• Licensing and Permit Fees: Some business types require specific licenses that may include fees impacting your overall tax and compliance obligations.

Operational Tips

• Register your business with the South Carolina Department of Revenue early to obtain necessary tax accounts.
• Implement bookkeeping systems to track income, expenses, and tax liabilities accurately.
• Consider payroll software or automation tools to manage withholding and tax filings efficiently.
• Stay updated on tax rate changes and filing deadlines as of 2026 to avoid penalties.