South Carolina Taxes
Construction materials carry a tax the contractor pays, and federal unemployment tax has a credit that changes the effective rate. This chapter covers sales and use tax on materials and the FUTA rate.
Sales and use tax on materials
A lump-sum real-property contractor is treated as the consumer of the materials it permanently installs and owes South Carolina sales or use tax on the cost of those materials, rather than collecting tax from the owner like a retailer. The tax becomes a cost the contractor includes in the bid.
The FUTA rate and state credit
The gross federal unemployment (FUTA) rate is 6.0% on the first $7,000 of each employee's wages. With the full credit for state unemployment tax paid on time, the effective rate drops to 0.6% - a maximum of about $42 per employee per year. FUTA is paid entirely by the employer, never withheld from the worker.