Nexus | Frequently Asked Questions

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Income Tax Nexus

Sales & Use Tax Nexus

Nexus FAQ

Voluntary Disclosure

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Nexus FAQs

What gives a business Income Tax nexus with South Carolina?

To determine whether Income Tax nexus exists, the SCDOR must consider all activities that the company is performing in South Carolina, as well as all relationships and transactions occurring within South Carolina. For more information, see Revenue Ruling 16-11.

What gives a business Sales & Use Tax nexus with South Carolina?

To determine whether Sales Tax nexus exists, the SCDOR must consider all activities that the company is performing in South Carolina as well as all relationships within South Carolina. For more information, see Revenue Ruling 14-4 and Revenue Ruling 18-14.

What should a business do if they have nexus, but have not filed tax returns? Is there a voluntary program?

Non-compliant taxpayers having a filing requirement but not filing may be subject to taxes, penalties and interest for periods of ten years or more. Accordingly, such a taxpayer should contact the SCDOR and request consideration for the Voluntary Disclosure Program.

How do I respond to your letter?

Your letter will include the Business Activities Questionnaire (NX-100) form. Return your completed NX-100 by the due date on your letter and submit it by one of the methods below:

Attach and email the completed form to the person listed on your letter
Print and mail the completed form to: South Carolina Department of Revenue, Nexus, PO Box 125, Columbia, SC 29214-0970
Fax the completed form to 803-737-2921

Why did I receive this letter?

We have identified your company as potentially making sales or providing services to customers located in South Carolina. We are looking into your company's activities to determine if nexus is established for any Sales and Use Taxes and any relevant Income Taxes.

I am registered and filing in South Carolina - what more do I need to do?

Please complete and submit the Business Activities Questionnaire (NX-100) form so that we can update our records.

What is de minimis?

De minimis means that a violation of a law or rule is so small that it is immaterial and should be ignored. This is determined by looking at all of the taxpayer's in-state connections and activities, ;not focusing on each factor individually.

Once established, how long does Income Tax nexus last?

Nexus determinations are made on a fiscal year by year basis.

What is PL86-272?

This law protects businesses from Income Tax nexus IF the only business activity of the business within the state consists of 1) the solicitation of orders for sales of tangible personal property; and 2) those orders are sent outside the state for acceptance or rejection, and, 3) if the orders are accepted, they are filled by shipment or delivery from a point outside the state. For more information see Revenue Ruling 97-15.

Is there a way to see if a business has nexus in South Carolina?

Out of state businesses who are currently conducting business in South Carolina should submit a Nexus Questionnaire (NX-100) to the SCDOR. Please include a cover letter explaining your need for nexus determination.

If you are planning on conducting business in South Carolina, review the Revenue Rulings below. If you answer "yes" to any of the questions in the Revenue Rulings, then you would have nexus for the related tax type.

Income Tax: Revenue Ruling 16-11
Sales & Use Tax: Revenue Rulings 14-4 and 18-14

Can a business file and pay online?

A business can register and open tax accounts online using our secure tax portal, MyDORWAY. Returns for nexus purposes or for the voluntary filer program must be filed directly with the Nexus/VDA Section.

If an out-of-state seller does not have nexus, and is not required to file returns, who owes the Use Tax?

When the seller does not have nexus, the Use Tax liability rests with the South Carolina purchaser. However, as a convenience to customers who are concerned with the potential for a Use Tax audit, the out-of-state seller may wish to voluntarily register to collect and remit the Use Tax. In this case, the seller will be provided a discount of up to $10,000 per fiscal year. (All other filers have a $3,000 per fiscal year discount cap.)

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