South Carolina Income & Tax for eCommerce Businesses
At Tall Oak Advisors, South Carolina is a state where sellers often discover they have physical nexus through FBA inventory before they expect it — particularly because Amazon's Southeast distribution network routes a significant amount of inventory through South Carolina facilities.
💡 Marketplace Sales Count Toward Your Threshold: South Carolina includes marketplace-facilitated sales in your personal $100,000 threshold calculation — even though the marketplace collects and remits the tax on those sales. This means your Amazon FBA sales and your Shopify sales are added together to determine whether you've crossed the threshold. If the combined total exceeds $100,000, you must register to collect on your direct sales.
Part 1: South Carolina Corporate Income Tax
South Carolina imposes a flat 5% corporate income tax on C corporations with nexus in the state. The rate is among the more moderate in the Southeast and applies to net income apportioned to South Carolina. South Carolina uses a single-factor sales apportionment formula, consistent with the national trend toward market-based sourcing.
S corporations, partnerships, and LLCs taxed as partnerships are generally not subject to South Carolina corporate income tax at the entity level — income passes through to individual owners at their personal rates.
What Creates South Carolina Corporate Income Tax Nexus?
South Carolina's corporate income tax nexus follows standard physical and economic presence standards:
Owning, renting, or using property in South Carolina — including FBA inventory in South Carolina fulfillment centers
Having employees, agents, contractors, or representatives operating in South Carolina
Carrying on a business, trade, profession, or occupation in South Carolina through regular, ongoing commercial activity
Deriving income from South Carolina sources on a systematic basis through sales of goods delivered into the state
Remote employees working from South Carolina addresses — creates immediate nexus
PL 86-272 in South Carolina
Federal Public Law 86-272 protects C corporations from South Carolina corporate income tax when their only South Carolina activity is soliciting orders for tangible goods approved and shipped from outside South Carolina. South Carolina honors this protection in standard form. FBA inventory stored in South Carolina warehouses eliminates this protection immediately, as does any employee or contractor activity beyond pure order solicitation.
Part 2: South Carolina Sales Tax
Economic Nexus Threshold
South Carolina's economic nexus threshold is $100,000 in gross revenue from sales delivered into South Carolina in the previous or current calendar year. Key details:
No transaction count threshold — revenue only
Marketplace sales count toward YOUR threshold — even though the marketplace collects and remits the tax, those sales are included when determining whether you've crossed $100,000
Threshold includes all sales — taxable, exempt, and electronic products
Registration window: once you exceed $100,000, you must register and begin collecting on the first day of the month that starts at least 30 days after exceeding the threshold
South Carolina Sales Tax Rate
South Carolina's base state sales tax rate is 6%. Local jurisdictions can add their own levies, typically 0%–2%, bringing combined rates to approximately 6%–8% depending on the customer's county. South Carolina is a destination-based state for remote sellers — charge based on the customer's delivery address.
South Carolina is also an SST associate member, which means it follows Streamlined Sales Tax conventions for product taxability definitions, simplifying determination of what's taxable.
Important Exemptions
South Carolina has several exemptions relevant to eCommerce:
Unprepared groceries (food for home consumption) are exempt from state sales tax
Prescription medications are exempt
Manufacturing machinery and agricultural products have specific exemptions
Annual August sales tax holiday: clothing, computers, and school supplies are exempt from both state and local tax during this annual event
FBA Sellers and South Carolina
Amazon's Southeast distribution network includes fulfillment center presence in South Carolina. FBA inventory stored in South Carolina creates immediate physical nexus for both sales tax and corporate income tax, regardless of your annual revenue. The South Carolina Department of Revenue has been active in using Amazon Seller Central inventory data to identify non-registered FBA sellers — this is not a state where assuming you've flown under the radar is safe.
Practical tip: Check your Amazon Inventory Event Detail Report to see which fulfillment centers hold your products. If South Carolina appears on that report, you have physical nexus and should register promptly.
What About Sales Tax?
South Carolina's 6% base rate and 30-day registration trigger (once threshold is crossed) create a tight compliance window for growing sellers. The fact that marketplace sales count toward your threshold also means multi-channel sellers can cross $100,000 faster than they expect.
At Tall Oak Advisors, we put together this guide as a resource for our eCommerce community. Tax rules vary significantly from state to state, and we want sellers to have the information they need to make informed decisions. More info at talloakadvisors.com
Disclaimer: This article is for general informational purposes only and does not constitute legal or tax advice. Tax laws change frequently. Consult a qualified tax advisor or CPA regarding your specific situation.
Sources: S.C. Code Ann. § 12-6 (Corporate Income Tax); S.C. Code Ann. § 12-36 (Sales Tax); SC Economic Nexus (eff. Nov. 1, 2018); SCDOR Remote Seller Guidance; Pub. L. No. 86-272.
