South Carolina LLC Taxes: The Complete Filing Guide (2025)
Running a limited liability company (LLC) in South Carolina means dealing with taxes at federal, state, and sometimes local levels. This guide simplifies everything you need to know to stay compliant and avoid surprises, from income tax and sales tax to city-specific requirements.
Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes.
South Carolina LLC Tax Basics
Navigating your South Carolina LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain South Carolina’s specific requirements, and highlight strategies to stay compliant and organized. This guide covers everything from federal income taxes to city-specific requirements and filing deadlines.
Use the links below to jump directly to the section you need:
- South Carolina LLC Taxes at a Glance
- Understanding LLC Taxation Basics
- Federal Tax Obligations
- South Carolina State Taxes
- Local Tax Considerations
- Tax Calendar and Filing Tips
- Tax Strategies for South Carolina LLCs
- Forms and Resources
South Carolina LLC Taxes at a Glance
| Tax Type | Rate | Filing Deadline | Forms Required |
|---|---|---|---|
| Federal Income Tax | 10-37% (personal brackets) | April 15, 2025 | Form 1040 + Schedule C or Schedule E/K-1 |
| Self-Employment Tax | 15.3% | April 15, 2025 | Schedule SE |
| South Carolina Individual Income Tax | 0%–6.2% | April 15, 2025 | Form SC1040 |
| South Carolina Corporation Income Tax | 5% | April 15, 2025 | Form SC1120 |
| South Carolina Pass-Through Entity Tax | 3% | March 15, 2025 | Form SC1065/SC1120S |
| Federal Payroll Taxes (If Employees) | 7.65% employer + 7.65% employee (FICA) | Quarterly (April 30, July 31, October 31, January 31) | Form 941 |
| South Carolina Unemployment Tax (If Employees) | 0.06%–5.46% (new employers: 1.0%) | Quarterly | Filed online |
| Federal Unemployment (FUTA) | 6% on first $7,000 per employee (0.6% after credits) | January 31, 2026 (annual) | Form 940 |
| Sales & Use Tax | 6% statewide (local surtaxes up to 3%) | Monthly, quarterly, or annually (based on volume) | Form ST-3 |
Understanding LLC Taxation Basics
How South Carolina LLCs Are Taxed By Default
Your South Carolina LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on personal tax returns. This is called pass-through taxation.
Here’s how it works:
- Your LLC earns income from business activities
- The LLC itself files no tax return (unless you elect otherwise)
- Profits “pass through” to members based on ownership percentage
- Each member reports their share on their personal tax return
- Members pay tax at their individual income tax rates
What this means for you: Unlike corporations, your business profits are only taxed once, which typically saves money.
Time-Saving Tip: If you’re uncertain about your LLC’s tax classification, a tax professional can review your LLC’s tax setup in 30 minutes and help you choose the most tax-efficient option.
Tax Classification Options
While pass-through taxation is the default, your South Carolina LLC can choose alternative tax treatments:
Default LLC Tax Status:
- Single-member LLC: Taxed as a sole proprietorship
- Multi-member LLC: Taxed as a partnership
Optional Tax Classifications:
- S Corporation: Can reduce self-employment taxes by paying “reasonable salaries”
- C Corporation: LLC pays corporate tax on profits, members pay personal tax on distributions (creates double taxation)
South Carolina Pass-Through Entity Tax Option:
- Optional tax that allows LLCs taxed as partnerships or S Corps to pay tax at the entity level
- Can help overcome the $10,000 SALT deduction limitation
- Must be elected each year
Not sure which tax classification is right for your business? Schedule a free consultation with 1-800Accountant.
Federal Tax Obligations
Income Tax
As a South Carolina LLC owner, you’ll report your share of business profits on your personal tax return using:
- Form 1040 + Schedule C (single-member LLCs)
- Form 1040 + Schedule E + Schedule K-1 (multi-member LLCs)
Federal income tax rates range from 10% to 37% based on your tax bracket (actual brackets will depend on inflation adjustments and any tax law changes).
Simply Put: Whatever money your business makes (after expenses) gets added to your personal tax return, just like income from a job.
Self-Employment Tax
LLC members actively involved in the business must pay self-employment tax of 15.3% (covering Social Security and Medicare) on their share of LLC profits.
Key points:
- Applies to net earnings of $400 or more
- Calculated on Schedule SE
- You can deduct 50% of the self-employment tax as an “above-the-line” deduction, which lowers your adjusted gross income
What happens if I miss this payment? The IRS charges penalties of 0.5% per month plus interest. However, first-time mistakes can often qualify for penalty abatement if you have a clean compliance history.
Employment Taxes
If your LLC has employees, you must:
- Withhold federal income tax
- Pay and withhold FICA taxes (7.65% each for employer and employee)
- Pay federal unemployment tax (FUTA)
- File quarterly employment tax returns (Form 941)
- Provide W-2 forms annually
Estimated completion time: 2-3 hours per quarter (significantly less with payroll software or professional help)
Estimated Tax Payments
Because no tax is withheld from your LLC profits, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES. These payments cover both income and self-employment taxes on your share of the business income. Missing deadlines or underpaying can lead to IRS penalties, even if you pay in full later.
Working with an accountant can help ensure accurate calculations, on-time payments, and a smarter overall tax strategy.
Key deadlines:
- April 15
- June 16
- September 15
- January 15
Pro Tip: Set calendar reminders 15 days before each deadline. This gives you time to prepare without the last-minute rush that leads to mistakes.
South Carolina State Taxes
South Carolina Individual Income Tax
South Carolina has a graduated personal income tax rate of 0% to 6.4% that applies to your LLC’s profits on your personal return.
Filing requirements:
- Use South Carolina Form SC1040
- Due April 15, 2025
- South Carolina follows federal adjusted gross income as a starting point
Bottom Line: For every $1,000 your LLC earns, you could owe up to $64 in South Carolina state income tax (in addition to federal taxes).
South Carolina Pass-Through Entity Tax
This optional tax can benefit many South Carolina LLC owners:
- Tax rate: 3% (flat rate on business income)
- Paid by your LLC, not individual members
- Members receive a tax credit on their personal returns
- Helps bypass the $10,000 SALT deduction limitation
- Must be elected each year with Form SC1065
- Does not renew automatically and cannot be retroactively applied
Real Savings Example: For an LLC with $200,000 in profits, the Pass-Through Entity Tax could save owners up to $7,400 in federal taxes by working around the SALT deduction cap.
South Carolina Corporation Income Tax
If your LLC has elected to be taxed as a C corp, you will be subject to the state’s 5% corporation income tax as well as an additional corporate license fee.
Filing requirements:
- File using Form SC1120
- Due April 15, 2025
- Corporate license fee: 0.1% of your capital and paid-in surplus, plus $15 (minimum total $25)
Sales and Use Tax
If your South Carolina LLC sells physical products or certain services:
- Collect 6% sales tax on taxable sales (plus any applicable local surtaxes)
- Register for a retail license through the South Carolina MyDORWAY portal
- File and pay collected taxes monthly, quarterly, or annually based on sales volume
- Due dates depend on your assigned filing frequency
- Use South Carolina Form ST-3 to file
60-Second Check: Do I Need to Collect Sales Tax?
- Do you sell physical products in South Carolina? → If yes, collect tax
- Do you sell digital products? → Generally not taxable
- Do you provide services? → Most services are exempt
- Do you sell online to South Carolina customers? → If yes, collect tax
Services typically exempt from sales tax include:
- Professional services (legal, accounting)
- Personal services (haircuts, fitness training)
- Medical services
Products typically subject to sales tax include:
- Tangible personal property
- Prepared food
- Some digital products
Payroll Taxes
If you have employees in South Carolina, you will be responsible for two types of payroll taxes.
Unemployment Insurance (UI) Tax
- Register through the SC Department of Employment and Workforce
- Rate is 1.0% for new employers (0.06% to 5.46% afterwards)
- Due quarterly
Withholding Tax
- Register through the South Carolina Department of Revenue
- Use the SC withholding tables to determine how much to withhold per paycheck
- Due monthly, quarterly, or annually (based on your assigned filing schedule)
Local Tax Considerations
Local Option Sales & Use Taxes
South Carolina allows counties and municipalities to impose their own local sales and use taxes, which apply in addition to the state’s 6% base rate.
Examples of combined rates (state and local) by city:
- Charleston (9%)
- Myrtle Beach (9%)
- North Charleston (9%)
- Columbia (8%)
- South Carolina sales tax rates by municipality
Filing requirements:
- All local taxes are filed through the state using MyDORWAY
- You do not need to file separately with individual cities or counties
- You must use the correct location codes to allocate taxable sales by jurisdiction
Property Taxes
If your LLC owns real property in South Carolina:
- Rates vary by county and municipality
- Real property is assessed annually based on fair market value
- May qualify for various exemptions based on business type
- Personal property tax may apply to business equipment
Tax Calendar and Filing Tips
Key Deadlines for South Carolina LLCs
January:
- January 15: Final estimated tax payment for previous year
- January 31: Issue W-2s/1099s to employees/contractors
- January 31: Fourth quarter federal payroll tax payment due
- January 31: South Carolina UI tax due
March:
- March 15: South Carolina PTET election and return due
April:
- April 15: Personal tax returns due
- April 15: Federal income and self-employment tax returns due
- April 15: First quarter estimated tax payment due
- April 30: South Carolina UI tax due
- April 30: First quarter federal payroll tax payment due
June:
- June 16: Second quarter estimated tax due
July:
- July 31: South Carolina UI tax due
- July 31: Second quarter federal payroll tax payment due
September:
- September 15: Third quarter estimated tax payment due
October:
- October 31: Third quarter federal payroll tax payment due
- October 31: South Carolina UI tax
Record-Keeping Checklist
Keep these records for at least seven years:
- Business income records (invoices, receipts)
- Expense receipts and documentation
- Bank and credit card statements
- Asset purchase and improvement records
- Vehicle mileage logs
- Home office documentation
- Payroll records
- Previous tax returns
Tax Strategies for South Carolina LLCs
S Corporation Election Benefits
Converting your LLC to an S Corporation for tax purposes can save on self-employment taxes:
- File Form 2553 with the IRS
- Pay yourself a “reasonable salary” subject to employment taxes
- Take remaining profits as distributions exempt from self-employment tax
Example: An LLC making $100,000 in profit pays 15.3% self-employment tax on the entire amount. As an S Corp, if $60,000 is a reasonable salary and $40,000 is taken as distributions, only the $60,000 is subject to employment taxes.
Potential Savings: In this example, you’d save about $6,120 in self-employment taxes.
Pass-Through Entity Tax Election
Consider electing South Carolina’s Pass-Through Entity Tax if:
- You’re affected by the $10,000 SALT deduction cap
- You expect your LLC to generate significant income
- All members agree to the election
Business Expense Deductions
Common deductions South Carolina LLC owners often overlook:
- Home office deduction
- Business mileage (70¢ per mile for 2025)
- Health insurance premiums
- Retirement plan contributions
- Professional development expenses
- Business meals (50% deductible)
Forms and Resources
Federal Tax Forms
- Schedule C: Profit or Loss From Business (sole proprietors)
- Form 1065: U.S. Return of Partnership Income
- Schedule K-1: Partner’s Share of Income, Deductions, Credits
- Form 1120-S: U.S. Income Tax Return for an S Corporation
- Form 2553: Election by a Small Business Corporation (S Corp)
- Form 8832: Entity Classification Election
South Carolina Tax Forms
- Form SC1040: South Carolina Individual Income Tax Return
- Form SC1120: South Carolina Corporation Income Tax Return
- Form ST-3: South Carolina Sales and Use Tax Return
Helpful Resources
South Carolina LLC Taxes FAQs
There are different types of local, state, and federal taxes that LLCs may need to pay, such as South Carolina employer taxes, property taxes, and state income taxes.
This will ultimately depend on each LLC’s specificities (e.g., location, industry, etc.).
This depends on how your LLC is taxed. In general, South Carolina LLCs are not required to file annual reports. However, LLCs taxed as a C corporation or S corporation must file an annual report with their state tax returns each year.
To see the differences in how LLCs are taxed, check our LLC Taxes guide.
South Carolina is a favorable location for starting an LLC due to its business-friendly environment.
The state offers low startup costs, limited liability protection, pass-through taxation, and no annual report filing requirement for LLCs. Additionally, the state’s growing economy and supportive resources for small businesses enhance its attractiveness for new LLCs.
The primary fee for an LLC is $110 for filing the Articles of Organization. There is no annual fee or report requirement for LLCs in the state, though LLCs taxed as corporations (C corp or S corp) will have to pay the annual License Fee (a minimum of $25).
To help you get started, you can use a third-party LLC formation provider, a business law attorney, or you can follow our step-by-step guide on how to start an LLC in South Carolina.
Need Professional Help? While this guide covers the essentials, tax laws are complex and constantly changing. Schedule a free consultation with 1-800Accountant to ensure your South Carolina LLC remains fully compliant while minimizing your tax burden.