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.
State-specific details
State exam facts
- State regulator
- South Carolina Contractor's Licensing Board (CLB), Department of Labor, Licensing and Regulation (LLR)
- Passing score
- 70%
- Scored questions
- 50
- Time limit
- 125 minutes
Does South Carolina require a state contractor license?
Yes. The South Carolina Contractor's Licensing Board (CLB), within LLR, licenses commercial contractors under S.C. Code Title 40, Chapter 11. A commercial license is required when the cost of the work exceeds $10,000 (after Act H.4115 of 2023).
What is on the South Carolina Business Management and Law exam?
The Business Management and Law exam is 50 questions, 125 minutes, and requires 70% to pass. Financial Groups I through V tie bid limit, working capital, net worth, and bond together (Group I $100,000 up to Group V unlimited), and applicants qualify by net worth or working capital.
What extra rules apply to South Carolina contractors?
A commercial CLB license also authorizes residential work, and a GC-Building contractor may self-perform ancillary specialty work only up to about 20% of project cost. The E-Verify requirement and the NPDES construction stormwater permit (one acre or more) also apply.
Sources: https://llr.sc.gov/clb/