Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for South Carolina.
April 6, 2026
South Carolina Advances Individual Income Tax Reductions and Flat Tax Framework
Authored by: Brian Meier, MSA and Courtney Easterday, MSA
South Carolina has enacted significant changes to its individual income tax structure with legislation signed by Governor McMaster. Beginning in the 2026 tax year, the state will replace its current multi-bracket system with a simplified rate structure that lowers the top marginal rate from 6% to 5.21% and applies a 1.99% rate to lower levels of taxable income. The legislation also includes a revenue-based mechanism that allows for additional rate reductions over time if state collections meet specified growth targets.
Beyond immediate rate cuts, the law sets the ultimate objective of transitioning to a single flat income tax rate of 1.99%, with the possibility of fully phasing out the individual income tax in the future. The legislation also introduces a new state-specific deduction framework, moving away from full conformity with federal itemized deductions. Under the new South Carolina Income‑Adjusted Deduction, deduction amounts and phaseout ranges vary by filing status, reshaping how taxable income is calculated for many taxpayers and signaling a broader structural shift in the state’s tax system.
If you have questions about state personal income taxes, please reach out to a member of the Withum SALT Team.
March 26, 2026
South Carolina Upholds Sales Tax Liability for Marketplace Sales
Authored by: Kiana McGowan, CPA and Katie Nguyen, CPA
On March 18, 2026, the South Carolina Supreme Court ruled that Amazon Services LLC was required to collect and remit South Carolina sales tax on third-party marketplace sales made during early 2016. The court held that under the law in effect at that time, a company could be treated as a seller even if it did not own the goods. Because Amazon controlled payment processing, customer interaction and transaction flow, it was considered engaged in the business of selling. The decision upheld more than $12.5 million in taxes, penalties and interest.
This ruling is significant because it applies to periods before South Carolina enacted its marketplace facilitator statute in 2019. The court made clear that states may rely on broad pre-marketplace-law definitions to assess taxes for earlier years. Businesses that facilitated third-party sales prior to marketplace laws should review historical sales tax exposure and any open audit periods. Taxpayers with similar operating models should be prepared for increased scrutiny and potential assessments.
The full text of the decision can be accessed here.
If you have questions about marketplace seller rules, please reach out to a member of the Withum SALT Team.
December 10, 2025
South Carolina Updates Guidance on the Application of Sales and Admissions Taxes to Dinner Theater Shows
Authored by: Bonnie Susmano, JD, MBA and Jessie Racioppi
On November 25, 2025, the South Carolina Department of Revenue issued Revenue Ruling #25-8 to provide guidance on the treatment of sales and admissions taxes for dinner theater shows. In situations in which a customer pays one price for admission to a show and a meal, the 5% admission tax applies to the portion of the ticket price for entertainment, and the 6% sales tax applies to the portion of the ticket price for the meal. Businesses can either separately state the entertainment and meal costs or reasonably allocate the charges. The business must have records to support that the ticket price breakdown is reasonable.
If you have questions about the taxability of transactions, please reach out to a member of the Withum SALT Team.
August 6, 2025
South Carolina’s New Jobs Tax Credit
Authored by: Bonnie Susmano, JD, MBA and Eric Wagener
Effective July 1, 2025, the South Carolina Department of Revenue finalized its guidance on the New Jobs Tax Credit (“Credit”). The Credit is intended to reward businesses for creating new jobs, with the credit amount scaled at the county level, giving a higher benefit to more economically challenged counties. The recent guidance was designed to simplify taxpayers’ understanding of this tax credit and streamline its administration.
According to South Carolina Revenue Ruling 25-16, the state outlined how employers can qualify, calculate the job count, and apply the credit against various tax and entity types, such as corporate income, individual income, pass-through entities, etc. Generally, a business must create at least 10 new jobs at a single facility to qualify for the Credit. However, small businesses with fewer than 100 employees only need to make two jobs, and some service-related industries must create between 25 and 175 jobs. The credit is nonrefundable but has a carry-forward period of up to 15 years and can offset up to half of a taxpayer’s tax liability. The credit can be passed through to partners and shareholders pro rata, though it must be applied at the entity level first.
If you have questions about South Carolina’s New Jobs Tax Credit, please get in touch with a member of the Withum SALT Team.
April 1, 2025
South Carolina New Guidance on Sourcing of Receipts from Services
Authored by: Jessie Racioppi and Katie Nguyen, CPA
On March 10, 2025, the South Carolina Department of Revenue released SC Revenue Ruling RR25-X (Public Draft), addressing the “income-producing activity method” currently in place for sourcing gross receipts from services. The draft ruling explains that income-producing activity, costs of performance, and market-based sourcing are distinct concepts. Depending on a company’s unique fact pattern, the income-producing activity method may mimic the performance cost or market-based sourcing. Generally, the income-producing activity location should be where the activity that the customer is paying for takes place.
The guidance also touches on South Carolina’s apportionment statutes, the definition of gross receipts, and considerations for transactions involving intangibles.
If you have questions about receipts sourcing, please reach out to a member of the Withum SALT Team.
Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.
Have Questions or Need Guidance?
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