South Carolina lesson 5 of 6
South Carolina LLC taxes, licenses and permits
South Carolina has no franchise tax on a standard LLC. Members of a pass-through LLC pay the state's graduated individual income tax on their share of profit, and local licensing runs on its own separate track.
How members are taxed
A South Carolina LLC taxed as a partnership or sole proprietorship for federal purposes passes income through to its members, who report their share on their South Carolina individual income tax return under the state's graduated rate structure. Confirm the current top marginal rate and bracket thresholds on the Department of Revenue's site each filing season, since South Carolina has been phasing its top rate down in recent years.
An LLC that elects C corporation tax treatment instead files a South Carolina corporate income tax return and pays the flat corporate rate on its South Carolina taxable income, plus the corporate license fee.
Sales tax and industry licensing
If you sell taxable goods or certain services, register for a retail license and collect South Carolina sales tax, remitted through MyDORWAY. Many professions and trades, from contractors to cosmetologists, need a specific license from the relevant South Carolina board through the Department of Labor, Licensing and Regulation, separate from anything filed with the Secretary of State.
South Carolina has no single statewide general business license. Check both your city or county and any state licensing board that regulates your trade.
Key takeaways
- Pass-through LLC profit is taxed at South Carolina's graduated individual income tax rate for resident members.
- There is no LLC franchise tax; only a C-Corp election pays SC corporate income tax and the license fee.
- Check both local licensing and any state board licensing that applies to your industry.
Frequently asked questions
Does South Carolina have a franchise tax on LLCs?
No. A standard pass-through South Carolina LLC does not pay a franchise tax. Only an LLC that elects C corporation tax treatment pays SC corporate income tax and the license fee that comes with corporate status.
Is there a statewide business license in South Carolina?
No. Licensing depends on your city or county and on any state board that regulates your specific trade or profession.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team