Do You Need to Get a Sales Tax Permit in South Carolina?
Quick Answer: You need to get a sales tax permit in South Carolina if you have a physical presence or meet economic or affiliate nexus as determined by the state. Read on for more detailed information.
What is Sales Tax Nexus Anyway?
Your business owes sales tax in any state where it has “sales tax nexus”. In short, if you have sales tax nexus you need to collect and remit sales tax. If you don’t have sales tax nexus, you generally don’t need to get a permit.
Sales tax nexus is a legal term that means you have crossed a threshold and now have a sales tax collection responsibility in the state. Nexus can be created by having a physical presence, economic presence, or by other factors. Nexus rules vary by state and retailers have specific nexus rules based on where they have people, property or inventory.
What Should You Do Once You Determine You Have Sales Tax Nexus?
Once you determine that you have sales tax nexus in South Carolina, your next step is to register for a sales tax permit in the state. Check out our blog post on getting a sales tax permit in South Carolina for more information about that process.
Common Ways to Have Sales Tax Nexus in South Carolina
1. Economic nexus in South Carolina
If you have made $100,000 of sales in this or the last calendar year in South Carolina, then you are required to register for, collect, and pay sales tax to the state. If you meet this threshold, it does not matter if you have a physical presence in South Carolina. Nexus has been created based on your volume of sales.
For more information about economic nexus see SC REVENUE RULING #18-14.
If you need help determining which states you have crossed economic nexus thresholds, check out our Sales Tax Starter Kit service.
2. Physical presence nexus in South Carolina
The following creates physical presence nexus in South Carolina. If you have any of the following in South Carolina, you will need to get a sales tax permit:
- Retail locations in South Carolina;
- An office, warehouse or other place of business in South Carolina;
- A salesperson in South Carolina soliciting orders on a regular basis;
- An agent located in South Carolina;
- Delivery of his/her goods on his/her own trucks and advertises on a regular basis in South Carolina via South Carolina media; or delivers their goods on their own trucks and advertises on a regular basis in South Carolina via media located outside of South Carolina that has extensive coverage in South Carolina.
For more information, please see the South Carolina FAQ – Who is required to file a sales and use tax return?
If you need help determining which states you have a physical presence in, check out our Sales Tax Starter Kit service.
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Uncommon Ways to Have Sales Tax Nexus in South Carolina
1. Affiliate Nexus in South Carolina
What exactly is affiliate nexus? Affiliate nexus can exist when a business has sufficient contact with a state through a separate business. If your out-of-state business has a relationship with an in-state business, then you may have affiliate nexus.
Please keep in mind that an “affiliated business” does not necessarily mean that it is a marketing “affiliate” in the typical sense of the word. Instead, “affiliate nexus” refers to the relationship between two businesses.
If you have a relationship with a business in South Carolina who has any of the following, you must get a sales tax permit.
- If the related entity/affiliate sells similar merchandise and uses common trade names, trademarks or logos.
- If the South Carolina affiliate is used to accept returns, take orders, perform customer service, or distribute advertising materials on the corporation’s behalf.
- It authorizes an affiliated company to install, deliver, service, or repair merchandise in South Carolina.
- If it uses an affiliated company to investigate, handle or resolve customer issues, or provide training or technical assistance.
For more information about affiliate nexus, see SC Revenue Ruling 14-4.
Do You Need a Sales Tax Permit in South Carolina If You Only Sell on Marketplaces?
If you are an out-of-state online retailer who ONLY sells on approved marketplaces (such as Amazon, eBay, etc), South Carolina sales tax will be remitted by the marketplace and you do not need to get a sales tax permit.
For more information about this please see SC REVENUE RULING #19-x, Question 8.
If you are an e-commerce seller who is unsure of where you need to get a sales tax permit, feel free to check out our Sales Tax Starter Kit service.
Disclaimer: Our attorney wanted you to know that no financial, tax, legal advice or opinion is given through this post. All information provided is general in nature and may not apply to your specific situation and is intended for informational and educational purposes only. Information is provided “as is” and without warranty.