Summary

Corporations transacting or conducting business within South Carolina are required to file a corporate tax return. Domestic corporations must submit the "Articles of Incorporation" and related documents to the Secretary of State. Foreign corporations must submit an Application for a "Certificate of Authority to Transact Business in South Carolina" and related documents to the Secretary of State. Form CL-1 Initial Annual Report of Corporations must be submitted by both domestic and foreign corporations to the Secretary of State. LLC's filing as a corporation must submit Form CL-1 to SCDOR within 60 days of conducting business in this state.

Corporate returns must be filed as long as the corporation's charter or authority to do business is registered with South Carolina Secretary of State. If you do not have any income or business to report in an accounting period, you are still required to file a corporate tax return, including the annual report (Schedule D) and pay any tax or License Fee due each year by the 15th of the fourth month after the end of your business year. The annual report (Schedule D) is part of the corporate tax return. The return and estimated tax payment due dates are the same as the federal requirements.

All estimated tax payments for corporate entities are to be made using Form SC1120-CDP or online using MyDORWAY. In addition, every taxpayer having employees or a withholding tax liability or making retail sales in South Carolina must register by filing a SCDOR-111 Business Tax Application. SCDOR-111 can also be used to enable a taxpayer to claim an exemption from nonresident withholding or for a purchaser to obtain a certificate of registration for Use Tax.

The Corporate Income Tax rate on C Corporations is 5% on South Carolina taxable income. The starting point in determining South Carolina taxable income is federal taxable income with certain South Carolina modifications subject to allocation and apportionment. Multi-state corporations must directly allocate certain nonbusiness related items of income and gains and losses and apply an apportionment ratio to all income remaining after allocation. Corporations involved in manufacturing, selling or otherwise dealing with tangible personal property (except for repair) use an apportionment ratio based on sales alone.

Most other corporations including financial businesses, services businesses, doctors, architects, installation and repair businesses and contractors use a gross receipts apportionment ratio. Railroads, telephone companies, pipeline companies, airlines, and shipping lines use special apportionment methods. C Corporations must pay an annual License Fee which is 0.1% of capital and paid in surplus plus $15. The License Fee cannot be less than $25. The License Fee is payable by the original due date for filing the Income Tax return or request for extension and applies to the tax year following the Income Tax year. The Income Tax and License Fee are reported on Form SC1120.

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