South Carolina Business License Tax: How the Local Gross-Receipts License Works

What the business license tax is, and what it is not

The Municipal Association of South Carolina describes the business license tax as an excise tax levied on the privilege of doing business, and is explicit that it is not an income tax. That distinction matters in practice. The base is gross income, so the tax is owed on revenue whether or not the year was profitable, and it is paid to the city or county, not to the South Carolina Department of Revenue. The SCDOR registrations a business needs, such as a Retail License or a withholding account, are separate obligations and do not satisfy a local license requirement.

Before 2022 every city wrote its own rules: its own license year, its own definitions and its own appeal process. Act 176 of 2020, codified at S.C. Code 6-1-400 through 6-1-420, replaced that patchwork with standard rules for every county and municipality that levies the tax. What it did not do is set the rates. Two towns can classify your business identically and still charge different amounts.

The calendar

• License year: May 1 through April 30 in every jurisdiction that levies the tax (S.C. Code 6-1-400(B)(1)).
• Renewal: due by April 30. If the tax is not paid by May 1, penalties may be charged. The law standardized the due date but not the penalty; the Municipal Association's model ordinance uses 5% per month, and each jurisdiction's ordinance controls.
• Measurement period: gross income for the calendar year before the due date, or the business's 12-month fiscal year before the due date.
• New businesses: the first license is computed on estimated gross income for the rest of the license year. A business open less than a year can project 12 months from its monthly average.
• Refunds of overpayments: requested before June 1, and issued within 30 days of the request.

How the tax is computed

Each jurisdiction's ordinance assigns your business to a rate class based on its NAICS industry code, then applies that class's rate schedule to your gross income. The standardized application shows the structure: a base rate covering the first tier of income, plus a rate for every $1,000 above it. The class schedule itself is statewide. Under S.C. Code 6-1-400(G), the Municipal Association revises it in even years using nationwide IRS profitability statistics and current NAICS codes, and every jurisdiction must adopt the latest version by ordinance by December 31 of each odd year. The schedule adopted in 2025 applies to the license years starting May 1, 2026 and May 1, 2027.

What counts as gross income

S.C. Code 6-1-400(E) defines gross income as gross receipts or gross revenue, received or accrued, for one year from business done within the jurisdiction. Where your business is domiciled changes what that means:

• Domiciled in the jurisdiction: all of your gross receipts count, except income earned outside the jurisdiction on which you paid another jurisdiction's business license tax and which you fully report.
• Not domiciled in the jurisdiction: only receipts received or accrued within that jurisdiction count.
• Excluded everywhere: taxes you collect for a government (sales tax, for example), escrow funds, and funds that belong to a third party. Bartered goods and trade-ins can be included.
• Agents, insurers and manufacturers have their own measurement rules in the same subsection.

Gross receipts reported on a license return can be checked against your federal and state income tax returns. If the license figure and the return figure disagree, expect a question, so reconcile the two before you file.

Working in more than one jurisdiction

A license follows where you do business, not only where your office is. A contractor based in one town and working on a job in another may owe a license in both. The domiciled-business deduction keeps the same dollars from being taxed twice: the home jurisdiction removes receipts already taxed by the jurisdiction where the work happened. Construction contractors can choose to license per project rather than annually where the jurisdiction allows it under 6-1-400(B)(2).

Renewing, and what happens if you don't

New licenses come from the city or county. Renewals can be filed through the state's Local Business License Renewal Center (localblrenewal.com), which the SC Revenue and Fiscal Affairs Office hosts. Jurisdictions must accept payment through it. You select the jurisdictions where you operate, report gross income and deductions, and the portal applies the classes and rates those jurisdictions supplied. RFA states it is not responsible for the accuracy of the rates, so check the result.

If the tax is unpaid by May 1, the business license official may serve a notice of assessment. S.C. Code 6-1-410 sets a fixed process from there:

• 30 days to request, in writing, an adjustment of the assessment.
• An informal conference within 15 days of that request, and a final assessment within 5 days after the conference.
• 30 days to appeal the final assessment to the council or its appeals board, paying at least 80% of the assessed tax under protest.
• A hearing within 30 days, a written decision, and then 30 days to appeal to the Administrative Law Court.

Third-party collection companies may help a jurisdiction find unlicensed businesses only under a contract adopted by ordinance, may not assess tax, and must stop contacting a business that asks in writing (S.C. Code 6-1-420).

Where we fit

Haigler CPA Group prepares the gross receipts figures that go on your license returns, reconciles them to your income tax returns, and works through the domiciled and non-domiciled split when you operate in several places. If an assessment arrives, we can help you assemble the records for the adjustment request and the conference. For the specific rules and rates in Charleston, Mount Pleasant and Summerville, see our Charleston-area business license guide.