For a detailed explanation of South Carolina’s business taxes, please visit the SC Department of Revenue’s Tax Guides.
Corporate Income Tax
South Carolina, with one of the lowest corporate income tax rates in the nation, bases it corporate income tax primarily on federal gross and taxable income. Companies engaged in multi-state activities will only pay taxes on the income derived from business activity conducted in South Carolina.
Annual corporate income is based on the following:
- Income allocated to South Carolina operations (interest, dividends, royalties, rents, property sale gains and losses, and personal services income); and
- Income apportioned to South Carolina. South Carolina offers a single factor sales apportionment formula.
A 5% corporate income tax rate is applied to the sum of these incomes. The resulting figure is the company’s state corporate income taxes.
Sales and Use Tax
South Carolina’s sales and use tax rate is 6 percent. Counties, by approval of a majority of county voters, may assess an additional one to two percent local option sales tax. Proceeds go towards infrastructure improvements or a rollback of property taxes. A variety of sales tax exemptions for companies are offered. Greenville only has a local option sales tax on prepared food for recreational improvements. All other sales tax rates are maintained at the 6 percent rate.
In South Carolina, only local governments may levy property taxes. A company’s property tax liability is a function of: Property Value x Assessment Ratio x Millage.
To determine Fair Market Value, real property is appraised, while tangible personal property is recorded at cost and then depreciated based on a statutory depreciation rate (for manufacturers) and income tax depreciation (for other businesses). The Fair Market Value is then assessed at rates established in the South Carolina Constitution. The local millage rate is applied to the assessed value to determine the property taxes. Millage rates in South Carolina are site specific and set annually by local government. A mill is equal to $0.001.
Tax Example: (assumes manufacturer & non-depreciable asset)
$10 Million investment x 10.5% assessment ratio x .2750 millage rate = $288,750 annual tax (before abatement)
Property Tax Exemptions may include inventories (raw materials, work-in-progress, finished goods), intangibles (stocks, dividends, interest) and pollution control equipment. A partial Property Tax Exemption, called an abatement, may be made available to manufacturing, research and development, corporate headquarters, office and distribution facilities meeting certain requirements.
Corporate License Tax
All companies must pay an annual corporate license tax. The rate is $15.00 plus $1.00 for each $1,000 of capital stock and paid-in or capital surplus. For multi-state corporations, the license tax is determined by apportionment in the same manner employed in computing apportioned corporate income.
Would you like more information about Greenville’s taxes and incentives?
Please contact GADC for more details, or learn more about the business climate in Greenville, SC.