Fractional CFO Services in Charleston

From 2027, Act 110 cuts the 5.21% rate in any year the Board of Economic Advisors projects individual income tax revenue to grow at least 5%, using the forecast in effect on February 15. Each cut is sized at the greater of $200 million or 25% of the surplus. Once the top rate reaches 1.99%, a single rate applies and keeps falling toward zero. No 2027 rate has been set.

Yes. Every corporation that files an annual report, S corporations included, pays a license fee of $15 plus $1 per $1,000 of capital stock and paid-in surplus, with a $25 minimum; retained earnings are not counted. S corporations and partnerships also withhold 5% of nonresident owners' South Carolina income, distributed or not, except to the extent the entity pays the elective 3% tax. An LLC taxed as a partnership pays no license fee.

Yes, in any year it also claims the federal research credit. The state credit is 5% of South Carolina qualified research expenses and offsets income tax or the corporate license fee, up to 50% of the liability left after other credits, with a 10-year carryforward and no refund or transfer. Because South Carolina did not adopt the 2025 federal law, domestic research costs are still amortized over five years on the state return.

General and mechanical contractors need one from the Contractor's Licensing Board once a job's total cost exceeds $10,000, the threshold since May 19, 2023. Each license group carries a job limit and a net-worth requirement, and the statement behind it rises with the group: owner-prepared for Groups 1 and 2, CPA-compiled for Groups 3 and 4 at application, and for Group 5 an audited balance sheet at application and a reviewed one at renewal. A surety bond equal to the net-worth requirement can replace the statement. More on fractional controllers for construction.

On private jobs, the owner pays the undisputed amount within 21 days of receiving a pay request, and the contractor pays its subcontractors within 7 days of being paid; residential homebuilders and residential projects of 16 or fewer units are not covered. Late payments earn 1% a month, but only if the payer was told about the statute when payment was requested, and a contract can change these terms only by waiving the sections by number in bold or underlined type. Pay-if-paid clauses are void by statute: payment from upstream cannot be made a condition of paying a subcontractor.

Private jobs have no statutory cap: the law allows a reasonable amount, and the contract controls. State construction contracts cap retainage at 3.5% of each progress payment, while counties, cities and school districts follow their own procurement codes. A mechanics' lien has to be served on the owner and recorded within 90 days of last furnishing labor or materials, and the foreclosure suit and lis pendens must follow within six months.

Yes, on materials. The contractor counts as the consumer, so it pays sales or use tax when it buys materials, and the contract price is not taxed. Anyone paying a nonresident contractor withholds 2% of each payment once the South Carolina portion exceeds, or could reasonably exceed, $10,000, unless the contractor is registered with the Secretary of State or the Department of Revenue and gives an affidavit saying so. On a job in Charleston, North Charleston or Mount Pleasant, a contractor based outside that city pays its license tax at double the resident rate and can license per project.

Yes, as a lien on the assets. When a majority of a business's assets by fair market value changes hands, any tax the business generated that was due on or before the transfer is a lien on those assets in the buyer's hands until paid, and the Department of Revenue can refuse or revoke the buyer's license to continue the business. The safe harbor is a Department of Revenue certificate of compliance dated no more than 30 days before closing. A City of Charleston business license doesn't transfer with the sale, so the buyer needs its own. See how we help owners prepare a business for sale.