Learn about the annual report and tax filing obligations for Alabama limited liability companies.
If you want to form and operate a South Carolina limited liability corporation (LLC), you must prepare and submit many paperwork with the state. This article discusses the most significant South Carolina LLC continuing reporting and state tax filing obligations.
Table of Contents
Report Annual
South Carolina, unlike most other states, does not require LLCs to submit an annual report.
State Corporation Tax
Most LLCs are pass-through tax corporations when it comes to income taxes. In other words, the burden for paying federal income taxes is passed via the LLC to the individual LLC members. LLCs do not pay income taxes by default; only its members do. Some states charge LLCs a separate tax or fee for the privilege of conducting business in their jurisdiction. South Carolina, on the other hand, is not one of those states.
However, in certain situations, the owners of an LLC elect to have their firm taxed as if it were a corporation. This decision is made by submitting IRS Form 2553 to the IRS. (The form is available on the IRS website.) When an LLC elects to be taxed as a corporation rather than as a pass-through entity, the firm must submit a separate tax return. South Carolina, like almost every other state, has a corporate income tax. In South Carolina, the corporation tax is typically 5% of the business’s total net income. Pay the tax to the Department of Revenue using the state’s company income tax return (Form SC-1120) (DOR)
Employer Taxes in the State
Do you have workers in your LLC? If this is the case, you must pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not addressed in this section. (However, it is important to understand that federal employer tax duties begin with getting a federal employer identification number (EIN).) Employers in South Carolina, on the other hand, must pay state taxes.
To begin, you must withhold and pay employee income taxes to the DOR. Begin by registering your company with the DOR, either online or in print form (Form SCDOR-111). After you’ve enrolled, you must submit withholding taxes online on a regular basis (usually monthly or quarterly) using Form WH 1601, WH 1605, or WH 1606. Each year, you’ll also need to utilize any variation of Form WH-1606 to reconcile your LLC’s tax withholding.
You’ll also need to register to pay state unemployment insurance (UI) taxes. These taxes are administered by the South Carolina Department of Employment and Workforce (DEW). These taxes may be registered for online or on paper (Form UCE-151). Then, each quarter, utilize Form UCE-120/101 to record your salary and pay your unemployment insurance taxes.
Taxes on Sales and Use
If your LLC sells items to consumers in South Carolina, you must collect and remit sales tax. This implies you’ll have to register with the Department of Revenue for this reason and then make periodic sales tax payments for products sold. You may register both online and on paper (Form SCTC-111). You will be awarded a sales tax license after you have registered. Then, you must file sales tax returns with the DOR on a regular basis (typically monthly or quarterly). This may be done by mail (Form ST-3) or online.
Other States Registration
If you want to do business in states other than South Carolina, your LLC may need to be registered in any or all of those states. The exact states concerned will determine if you are needed to register: each state has its own regulations for what defines conducting business and whether registration is required. For registration reasons, having a physical presence (a business location) in a state, recruiting personnel in a state, or soliciting business in a state (through telephone, print advertisements, mail, or the Internet) are sometimes considered conducting business. Obtaining a certificate of authority or comparable document is normally required for registration.