Business Tax
Starting a Business in South Carolina? Get the Tax Setup Right From Day One
We take a new South Carolina business through its tax setup in the right order: classification, EIN, state accounts, local licenses, books and the first year's payments.
A new South Carolina business usually needs a federal tax classification, a free EIN from the IRS, accounts with the SC Department of Revenue for sales tax or withholding, an unemployment insurance account with SC DEW once it pays wages, and a business license from each city or town where it operates. On top of that, it needs separate books and a bank account from day one, and a plan for estimated taxes and 1099s. We work through that list with you after your attorney forms the entity.
How we handle it
Free consultation
We go through what you sell, where you will operate, who owns the business and whether you will hire or use contractors. From that we build the list of registrations that apply to you and the order to do them in.
Choose the tax classification
We explain how an LLC is taxed by default and when an S corporation election is worth considering, so your attorney can form the right entity. If the election makes sense, we handle its timing.
Federal and state registrations
We walk you through the EIN application on irs.gov and the SCDOR Business Tax Application in MyDORWAY, and tell you which tax accounts to open. If you will have employees, we flag the withholding and SC DEW accounts your payroll provider will need.
Books, bank account and records
We help you set up a business bank account and a clean chart of accounts, in QuickBooks Online if you want it, and a system for receipts and W-9s. Ongoing monthly bookkeeping is a separate service if you want us to keep the books.
First-year tax calendar
We estimate the first year's tax, set estimated payment amounts and dates, and list every return and filing deadline that now applies to you. Then we prepare the first year's returns.
What to have ready
- Your business plan or a short description of what you will sell and where
- Names, addresses and ownership percentages of every owner
- Formation documents from your attorney, if the entity already exists
- Your EIN letter, if you already have one
- Expected first-year revenue and major startup costs
- Plans to hire employees or pay contractors, and when
- The address you will operate from, including any home office
- Any lease, franchise or purchase agreement for the business
Please don’t send tax documents or Social Security numbers through the website form. Bring them to the consultation. More in documents to bring to your CPA.
The setup checklist, in order
| Step | Who you deal with | When it applies |
|---|---|---|
| Form the entity (LLC or corporation) | Your attorney, filing with the SC Secretary of State | Before you open, if you want a separate legal entity |
| Pick the federal tax classification | IRS (Form 2553 or 8832 only if electing) | At formation; S election timing matters |
| Get an EIN | IRS, free on irs.gov | Before opening a bank account or registering with the state |
| Open SCDOR accounts | SCDOR, MyDORWAY Business Tax Application | Retail License before taxable sales; withholding before the first paycheck |
| Open an unemployment insurance account | SC DEW, through SUITS | Once you pay wages; liability starts at $1,500 in a quarter or one employee in 20 weeks |
| Get a local business license | Each city or town you operate in | Before you start operating there |
| Open a business bank account and books | Your bank; your bookkeeping system | Day one |
| Plan estimated tax payments | IRS and SCDOR | First year you expect to owe |
| Collect W-9s from contractors | Each contractor | Before the first payment |
Get the EIN from the IRS, not a look-alike site
An Employer Identification Number is free. The IRS says you never have to pay a fee for one and warns about websites that charge for it. The online application on irs.gov issues the number right away if it is approved, but it is only open during set hours and allows one EIN per responsible party per day. If a site asks for a credit card, you are not on the IRS site.
South Carolina accounts: SCDOR and SC DEW
The SCDOR's MyDORWAY Business Tax Application opens a Retail License and the tax accounts a business needs, including sales and use tax and withholding. You will need an SSN, ITIN or EIN, your addresses, owner details and a NAICS code. The SCDOR asks you to allow up to 5 business days for processing. If you have an employee working in South Carolina, you need a withholding account and file quarterly returns.
Employers also register separately with the SC Department of Employment and Workforce. A business becomes liable for quarterly unemployment insurance tax once it pays $1,500 or more in wages in any calendar quarter or has at least one employee during any 20 weeks in a calendar year. We do not run payroll, but we make sure these accounts exist before your provider runs the first paycheck.
Local business licenses: each town licenses separately
A South Carolina business license is issued locally, and Charleston, Mount Pleasant and Summerville each run their own. Fees are generally based on business activity and gross receipts; in Charleston, a new business's first fee uses projected gross receipts. The license follows where you do business, not just where your office is, so a contractor or service business working in several towns may need several licenses.
City of Charleston
Businesses operating or generating income in the city need an annual license, including those with no physical location there. A home-based business also needs a Home Occupation Application, and the city suggests checking zoning before you sign a lease. Licenses expire April 30 each year.
Town of Mount Pleasant
Anyone engaged or intending to engage in business in the town needs a license, and the fee is due before operations begin. Applications and renewals are online, and fees are due annually on April 30.
Town of Summerville
Businesses located in town, businesses outside town limits providing goods or services in town, and home offices in town need a license. Licenses run from May 1 to April 30, and you can apply through the town's online portal.
Outside city or town limits, licensing is handled by the county or by the smaller town you are in. In Charleston County, the county's Revenue Collections office handles unincorporated areas and several towns, including James Island and Folly Beach.
Books, estimates and 1099s in the first year
- Keep business money in a business account from the first transaction. Mixing personal and business spending makes every later step, from bookkeeping to the return, harder.
- Individuals, including sole proprietors, partners and S corporation shareholders, generally need to make estimated payments if they expect to owe $1,000 or more. Paying at least 90% of this year's tax or 100% of last year's (110% if last year's AGI was over $150,000) generally avoids the penalty.
- Get a Form W-9 from every contractor before you pay them. For payments made in 2026, Form 1099-NEC is required for each person paid $2,000 or more for services, due January 31; the IRS says the threshold may be adjusted for inflation from 2027.
- Payments to corporations, including LLCs taxed as corporations, generally do not need a 1099-NEC, though attorney fees are an exception.
Sources
- IRS — Get an employer identification number
- SCDOR — Business tax registration
- SC DEW — Employer resources
- IRS — Estimated taxes
- IRS — Instructions for Forms 1099-MISC and 1099-NEC
- City of Charleston — Business License Information
- Town of Mount Pleasant — Business License Division
- Town of Summerville — Business Licenses
By Haigler CPA Group. Updated . Reviewed by Matthew Haigler, CPA on . The information on this site is general in nature and is not tax, legal, or accounting advice for your situation. Tax law changes and the right answer depends on facts we would need to review with you. Please speak with a qualified professional before acting on anything you read here.
This is for you if
- You are about to start a business in South Carolina and want the tax side set up correctly the first time.
- You formed an LLC recently and are not sure what else you were supposed to register for.
- You are moving an existing business to South Carolina or opening a location here.
- You plan to hire your first employee or start paying contractors soon.
- You want to know whether an S corporation election makes sense from the start.
What sits outside this service
- Forming the entity and drafting the operating agreement. Organizing documents are attorney work.
- Running payroll. We do not process payroll; we help you set it up with a provider and reconcile its filings.
- Legal advice on contracts, leases, zoning or permits.
Start somewhere else if you need
Questions people ask about this
What tax accounts does a new business need in South Carolina?
It depends on what you do. Businesses making retail sales need a Retail License and sales tax account from the SCDOR, employers need an SCDOR withholding account and an SC DEW unemployment insurance account, and corporations and partnerships file their own state returns. We build the list for your business in the consultation.
Do I need a business license in Charleston, Mount Pleasant and Summerville?
You need one from each city or town where you do business, not just the one your office is in. All three require a license for businesses working in town from outside its limits, and they set fees by business activity and gross receipts.
Should I pay a website to get my EIN?
No. The IRS issues EINs for free on irs.gov and warns about websites that charge for them.
Do I need a CPA before or after forming my LLC?
Before is better. The tax classification and any S corporation election have deadlines tied to when the business starts, and your attorney can form the entity with that decision already made. See LLC vs. S corporation taxes in South Carolina for how the two differ.
When does a new business have to start paying estimated taxes?
Generally in the first year you expect to owe $1,000 or more on your personal return after withholding and credits, or $500 or more for a C corporation. We estimate the first year's profit and set payment amounts with you so the first April is not a surprise.
Keep reading
- Business TaxYear-round planning, corporate returns, pass-through entities and multi-state compliance.
- S corporation electionWe work out whether an S corporation election pays for itself on your numbers, file Form 2553 inside the window, and set up the salary, payroll and returns that come with it.
- Payroll Setup for Your First EmployeeThe first employee changes the shape of a business more than the second through the twentieth put together, because it is the point at which you start holding other people's money and answering to three agencies about it.
- South Carolina Sales Tax for Small BusinessSales tax is the obligation small businesses most often discover late, because nothing about it is triggered by profit. It is triggered by making a sale, and it starts on the first one.
- Tax Deadline CalendarThe federal dates that matter, in order, with what each one actually requires.
Talk to a tax expert
Tell us what you are dealing with and we will tell you how we would handle it.