How to Register for a Sales Tax Permit in South Carolina

Wherever you are starting a new business in the US, the steps to follow are fairly similar. You have to familiarize yourself with legal requirements and rules in order to be able to run your business legally. Running an online resale business is no exception. However, regulations for setting up such a business depend on the location.

The first thing to know is that South Carolina does not have a statewide business license requirement. Instead, businesses have to apply for their licenses locally. The state does require various types of license, permits and registrations prior to conducting any business. When it comes to registering for a license in South Carolina, the gateway to all regulatory guidelines is South Carolina Business One Stop (SCBOS), a government-provided online source for businesses.

The next step is to decide what the legal entity of your business would be. The common forms include sole proprietorship, partnership, and corporation, with a limited liability company (LLC) being a fairly new structure in South Carolina.

Once you have decided the legal form of your business, you must register with the Secretary of State, after which you receive Articles and a Certificate that your business is registered in South Carolina. This ensures the business name is available for you when registering with the IRS and other organizations within South Carolina, be it state, county or municipal. Most South Carolina towns and municipalities require you to file for a business license, while eight counties also require you do the same.

Prior to visiting your local municipality for further details on the license requirements, you have to obtain an Employer Identification Number (EIN), or if you are registered as a sole proprietorship or LLC with single member, you will be identified by the Social Security Number (SSN). To file for a business license, go to your local municipality. Since you will be purchasing products to resell, you will be acting as a retailer. According to the South Carolina Department of Revenue, sales made online fall under the retailer business category and require a retail license.

But before we focus on the retail license in detail, there are some other considerations you have to look into, such as zoning requirements, fire marshal requirements, and business, personal and property tax. To find more about on this, go to  MyDorway, South Carolina Department of Revenue’s online service, where you can also register your business or file tax returns, and more.

Applying for a Retail Sales Permit in South Carolina

To then resell the products to end consumers, you require a retail license. Even if you are selling from your home and do not have a store, nor do the customers come to your house to purchase products, you are still required to have a retail license.

To apply for a retail license you can either go to the MyDOORWAY website or file the SCDOR-111, Business Tax Registration Form in paper at your local office or by mail. Retail permit registration fee is $50 and you have to know that sales by and purchases from an online retailer are subject to sales and use tax. The license, once received, is valid as long as you continue to operate the business at your registered location. To apply for the license you have to provide the owner’s name, location and mailing address, type of your business, type of ownership and in case the business has multiple partners, names of the business owner and all the partners. If you chose to complete your filing in person or online, you will receive the sales tax registration number immediately, while the physical permit would be delivered to you in a few days following online registration. Registering through the mail could take up to two weeks.

However, in certain cases you will not be liable for the sales tax. In case your purchaser provides you with a resale certificate (also known as a resellers exemption certificate), you are relieved of the liability for the sales tax as it is passed on to the buyer. A resale certificate can be obtained from the South Carolina Department of Revenue. This certificate is intended for use by retailers who buy products for resale, but there are certain conditions that need to be met for the certificate to be valid. It has to contain all the SCDoR required information, the seller did not fraudulently fail to collect or remit the tax, and the seller can’t solicit a buyer to take part in unlawful claim that a sale was for resale.

In general, the rules are that sale for resale is a non-taxable wholesale sale, according to the South Carolina Department of Revenue regulations. This means that a wholesaler or a retailer is making a sale to another wholesaler or retailer who will sell the product on either to other retailers or wholesalers or end consumers.

But you should enquire at your local office about the proper use of a resale certificate because, in addition to being liable for the tax, you will have to pay an additional penalty of 5 “percent of the the amount of the tax for each month, or fraction of a month, during which the failure to pay the tax continues, not exceeding 50 percent in the aggregate,” SCDoR’s rules read.

In addition to familiarizing yourself with the permits and sale tax rules as well as the rules for the use of a resale certificate, you have to get familiar with the use tax, which is imposed on the storage, use or consumption of merchandise bought at retail in the state. A separate use tax registration is not required for retailers as they can remit use tax on products or services purchased for own use.

For more information, please contact:

South Carolina Department of Commerce

1201 Main Street, Suite 1600
Columbia, SC 29201-3200
Phone: (803) 737-0400; (800) 868-7232

SC Secretary of State’s Office

1205 Pendleton Street Suite 525 Columbia, SC
Phone Number – (803) 734-2158
Fax Number – (803) 734-1614 29201

South Carolina Department of Revenue

300A Outlet Pointe Boulevard Columbia, SC 29210
Phone: 803-898-5000
Toll Free: 1-844-898-8542

South Carolina Business One Stop

E-Mail – [email protected]
Phone Number – (803) 898-5690
Fax Number – (803) 737-6018

While this article serves as a guide to the steps needed to register your business in the state of South Carolina. We urge you to visit the addresses above for more information or request information at your local office, listed here.

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Henley Johnson

Henley currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Henley is here to help you grow your business.

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