South Carolina taxes personal income at 0% to 6%, starting from your federal taxable income. A sole proprietor, and an LLC the IRS disregards, owe no separate business tax and file nothing for the business. C corporations pay 5% corporate income tax, and every corporation pays an annual license fee of at least $25 with its return.
Personal income tax
South Carolina residents file Form SC1040. The rate is 0% on the first $3,560, 3% on the next $14,270, 6% on everything above $17,830 of taxable income, for every filing status. At $100,000 and above, the booklet has you take 6% of taxable income and subtract $642.
The return starts from your federal taxable income, after your federal standard or itemized deduction. So there is no second South Carolina deduction to take. Social Security and railroad retirement are not taxed.
- Return
- Form SC1040
- Rates
- 0%, 3%, 6%
- Starting point
- Federal taxable income, so no separate state deduction
- Dependent exemption
- $4,930 per dependent, and $4,930 more for each dependent under 6
- Retirement deduction
- Up to $3,000 under age 65, $10,000 at 65 or over, reduced by any military retirement deduction
- Age 65 deduction
- $15,000, reduced by the retirement and military retirement deductions
- Not taxed
- Social Security, railroad retirement, and military retirement
- Net capital gain
- 44% of it is deducted
- Child care credit
- 7% of federal child care expenses, up to $210 for one child or $420 for two or more, not for married filing separately
Sole proprietor
A sole proprietor owes South Carolina no annual report and no license fee for the business itself.
Your business profit is taxed on your own Form SC1040, at the personal rates above.
Single-member LLC
South Carolina charges an LLC no annual report and no license fee unless it is taxed as a corporation. So a single-member LLC the IRS disregards files nothing for the business and pays nothing.
If the LLC elects to be taxed as a corporation, both the annual report and the license fee apply, and it files Form CL-1 within 60 days of starting business. Otherwise its profit is taxed on your own Form SC1040.
Partnership
A South Carolina partnership files Form SC1065. The profit is taxed on the partners' own returns.
On a partner's own Form SC1040, active trade or business income from a pass-through can be taken out of the normal rates and taxed at a flat 3% instead, using Form I-335.
S corporation
A South Carolina S corporation files Form SC1120S every year, even with no income. It pays an annual license fee with the return, based on its capital and paid-in surplus and never less than $25. The fee covers the year after the income tax year, which matters when you close the business.
Normally the profit is taxed on the shareholders' own returns, where Form I-335 can tax active business income at a flat 3%. Or the S corporation can elect, each year, to pay 5% on its active trade or business income itself.
C corporation
A C corporation files Form SC1120 every year, even with no income, and pays 5% of its South Carolina taxable income. A corporation working in several states counts only its South Carolina share. A business selling goods uses its sales ratio; a service business, contractor or professional practice uses its gross receipts ratio.
It also pays the annual license fee with the return, on top of the income tax, never less than $25. The fee covers the year after the income tax year.
- Return
- Form SC1120, due even with no income
- Corporate income tax
- 5% of South Carolina taxable income
- Multi-state profit
- Sales ratio for goods, gross receipts ratio for services
- License fee
- At least $25, based on capital and paid-in surplus
Estimate your state tax
Pick your business type and enter this year's numbers to see the state business tax South Carolina charges. It assumes all your sales are in South Carolina.
An estimate for planning, not tax advice.
Sources
- 2025 SC1040 Individual Income Tax Form and Instructions
- 2025 Form I-335, Active Trade or Business Income Reduced Rate Computation
- dor.sc.gov C Corporation
- dor.sc.gov S Corporation
- dor.sc.gov Form SC1120: Part II, line 21 and Schedule D (the annual report)
- dor.sc.gov C Corporation: rate, licence fee formula and minimum
- dor.sc.gov S Corporation: the licence fee applies, and the entity-level election
- dor.sc.gov Form SC1120: line 7 (tax at 5%), line 21 (licence fee), line 30, and Schedules H-1 and H-2
Last reviewed August 2026.
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