How to File and Pay South Carolina Use Tax
Fulfill your South Carolina use tax obligations for out-of-state goods. Learn the complete process for accurate reporting and timely payment.
South Carolina’s use tax is a companion to its sales tax, applying to tangible goods bought from outside the state for use, storage, or consumption within South Carolina. If an out-of-state seller does not collect South Carolina sales tax on a purchase, the responsibility to pay the use tax shifts to the buyer. This system ensures that purchases intended for use in the state are taxed uniformly, whether they are bought from a local retailer or an out-of-state vendor.
Who Owes South Carolina Use Tax
Individuals
An individual’s obligation to pay use tax arises from common purchasing activities. When a person buys tangible items from online retailers, mail-order catalogs, or television shopping channels that do not collect South Carolina sales tax, use tax is due on the purchase price. This also applies to items purchased in another state and brought back into South Carolina for personal use. For example, if a resident buys furniture in a neighboring state that has a lower sales tax or no sales tax and then transports it home, they are required to remit South Carolina use tax on the value of that furniture. This requirement extends to a wide range of products, from electronics and clothing to books and home goods.
Businesses
Businesses operating in South Carolina are also subject to use tax on their untaxed out-of-state purchases. This applies to any tangible personal property acquired for use in the course of business operations when the seller did not collect South Carolina sales tax. Common examples include office equipment, manufacturing machinery, computer hardware, software, and general office supplies. The obligation is not limited by the size or type of the business; sole proprietorships, partnerships, and corporations are all responsible for self-assessing and paying use tax. For instance, if a construction company buys tools from an online supplier that doesn’t charge sales tax, that company must calculate and pay the use tax directly to the SCDOR.
Calculating and Preparing to File
The first step is to gather all documentation for untaxed purchases, such as invoices, receipts, and online order confirmations that show the purchase price. Next, calculate the tax amount. South Carolina has a statewide use tax rate of 6%, and many counties levy additional local use taxes. Taxpayers can find their specific combined rate on the SCDOR website. If sales tax was paid to another state, a credit may be available; if the tax paid is less than the South Carolina use tax due, the difference must be paid.
Individuals use Form UT-3, the Consumer’s Use Tax Return, while businesses typically report use tax on their sales and use tax return, Form ST-3. Blank copies of these forms are available on the SCDOR’s website.
How to File and Pay the Use Tax
The SCDOR recommends using its free online tax portal, MyDORWAY, for both filing and payment via credit card or electronic check. Filing online provides an immediate confirmation number for the taxpayer’s records. Businesses with a South Carolina tax liability of $15,000 or more per filing period are required to file and pay electronically.
Alternatively, taxpayers can mail a paper return to the address printed on the form. If mailing a return with a payment, a check or money order made payable to the SCDOR should be included. Individuals also have the option to report and remit use tax on their South Carolina Individual Income Tax Return, Form SC 1040.