South Carolina Business License

Starting a new business in South Carolina? You may find the licensing process a bit tricky.

This is because there’s no one-size-fits-all business license for the whole state, and instead, each city, county, and even some professions have their own set of rules.

Don’t worry, though; this South Carolina Business License guide is here to simplify things. We’ll break down the ins and outs of South Carolina’s business licensing so you can confidently take the steps needed in order to start your business legitimately.

Let’s get started.

Do I Need a Business License in South Carolina

In South Carolina, businesses are required to obtain various licenses and permits at the local, state, and federal levels. Here’s a general breakdown:

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Sales Tax Licenses: If your business will conduct any form of retail sales, it’ll need to obtain a South Carolina retail license from the state’s Department of Revenue. This license isn’t necessary, however, if your business plans to offer professional services instead of products
• Professional Licenses: Some professions require special licenses in order to offer their services legally. For example, new general and mechanical contractors in the state must obtain the appropriate license from the South Carolina Contractor’s Licensing Board
• Environmental Permits: If your business’s activities could have an impact on the health of the general public or the environment, it may need to obtain one of these permits. For example, most restaurants and food establishments must obtain a food permit from the state’s Department of Health and Environmental Control

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within South Carolina plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: As in many other states, South Carolina cities and counties have their own specific licenses and permits that businesses must obtain in order to operate legally. Businesses operating in the city of Charleston, for example, must obtain a business license from the Charleston Revenue Collections Division
• State: You’ll also need to keep an eye out for a number of business licenses at the state level. For example, all taxi businesses in South Carolina must get a certificate of public convenience from the state’s Office of Regulatory Staff
• Federal: If your business will operate within certain federally regulated industries or do specific types of work, you might need a license from the federal government. These include the alcohol, aviation, firearms and explosives, radio and television broadcasting, and transportation industries, among others

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in South Carolina

In order to get your business license(s) in South Carolina, you will need to complete the following steps:

• Form Your Business
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in South Carolina, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however it’s often seen as the most advantageous for small businesses in South Carolina to register as a Limited Liability Company (LLC). Here are a few reasons for why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding the double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the South Carolina Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: You’ll need to research your specific municipality’s licensing requirements because they often vary between cities and counties. If you plan to run a food establishment in the city of Greenville, for example, you’ll need to obtain a hospitality tax permit in order to collect the mandatory 2% local hospitality tax
• Statewide Licenses: You also may need to secure one or more business licenses at the state level. If you plan to open a restaurant in South Carolina, for example, you’ll need to apply for a food permit from the state’s Department of Health and Environmental Control
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and the sale of alcoholic beverages, it may be required to obtain additional federal licenses or permits

Note: For more detailed information on the permits your business may need, be sure to contact the South Carolina Small Business Development Center in your local area.

Step 4: Renewal of Licenses and Permits

Many businesses must renew their business licenses periodically — usually every one or two years — in order to keep them valid. If you’re uncertain whether you need to renew any of your business’s licenses, make sure to reach out to the agency that issued your business license for clarification.

Alternatively, due to how complicated each step of applying for and renewing business licenses is, third-party services that handle this entire process are becoming an increasingly popular option.

How Much is a Business License in South Carolina

The cost of business licenses in South Carolina can vary, depending on the local laws in your municipality, the industry in which your business operates, and even your total business revenue.

For example, Marion County uses a sliding scale for fees based on different rate classes. Businesses generating up to $2,000 in revenue must pay between $25 and $50 while those earning more than this amount will pay a license fee determined by multiplying a designated rate by their total business revenue.

To ensure full compliance with licensing requirements and budget accordingly, it’s important to confirm the specific fee structure of the municipality in which your business will operate. Alternatively, you can hire a third-party service that specializes in this area of accounting advice.