Updated July 1, 2025

Key PointsA three-dimensional topographic relief map of South Carolina in shades of green and brown showing elevation changes—from the higher ridges in the northwest to the flat coastal plain in the southeast—set against a soft beige background. Bold white text overlay reads “South Carolina Cannabis Tax Guide (CBD Only).”

  • No Legal Cannabis Sales Yet: South Carolina does not currently allow recreational or medical cannabis sales. There are no excise or special cannabis sales taxes in effect.

  • Legal CBD Program Only: The state permits the sale of low‑THC, high‑CBD oil for qualifying epilepsy patients. These products are treated as ordinary retail goods and are subject only to the state’s standard sales tax.

  • 280E Tax Rule Doesn’t Apply: Because there is no legal cannabis industry, South Carolina has not enacted any state‑level “decoupling” from IRC Section 280E (the federal rule that disallows most business deductions for marijuana businesses).

  • Future Law Changes Possible: Should South Carolina legalize cannabis in the future, the legislature is likely to create excise and sales taxes, strict reporting requirements, and penalties for late filings or noncompliance.

280E Decoupling (State Level)

  1. Not Applicable Today: No state law overrides federal 280E for cannabis, since cannabis sales remain illegal.

  2. Federal Penalties Remain: Any business that operated in violation of state law would still face full 280E limitations at the federal level.

  3. Potential Future Benefit: If South Carolina legalizes and decouples, businesses could deduct ordinary expenses instead of being restricted to cost of goods sold.

  4. Watch Proposed Bills: Legislators have introduced proposals (e.g., Compassionate Care Act bills) that, if passed, might include tax‑deduction allowances akin to decoupling.

  5. Stay Informed: Monitor developments closely — any legalization vote will trigger new rules on tax rates, reporting, and deductions.

Current Tax Treatment

  • Excise Tax: None — no legal retail cannabis to tax.

  • General Sales Tax: 6% statewide on all retail products, including CBD oil. Local jurisdictions can add up to 3% more for a total of 7–9%.

  • Medical Cannabis: Only low‑THC/high‑CBD oil is permitted. It is taxed like any other retail good at the combined state/local rate.

Examples of Local Sales Tax Rates

  • Columbia: 6.5% total

  • Charleston: 7.0% total

  • Greenville: 7.0% total

Documentation & Compliance for CBD Oil

  • Patients must register through the South Carolina Department of Health and Environmental Control (DHEC).

  • Keep a physician’s certification and DHEC registration on file.

  • Treat all CBD oil sales as general retail sales — no special tax forms.

Filing & Payment Deadlines (General Sales Tax)

  • Frequency: Most retailers file monthly or quarterly, depending on average tax liability.

  • Forms: Use Form S‑1080 for sales tax.

  • E‑Filing: Required through the state’s MyDORWAY online portal.

  • Zero‑Sales Filers: Must submit a “zero” return if there were no taxable sales during the period.

  • Quarterly Option: Available if monthly liability averages less than $50.

Penalties for Late or Missed Filings

  • 5% penalty per month, up to a maximum of 25%.

  • Repeated failures can lead to license suspension or revocation.

How to Calculate Your Tax (When Cannabis Is Legalized)

  1. Determine Your Tax Jurisdiction: Find the combined state + local rate.

  2. Apply Excise Tax: If and when an excise tax is enacted, calculate it on wholesale or retail price as specified.

  3. Add Sales Tax: Charge the combined sales rate on the final invoice (including any excise tax, if required).

  4. Account for Medical Exemptions: Subtract or exempt medical‑use transactions if the law provides special treatment.

Trade Associations to Watch

Key Government Contacts

Financial Calendar (As of July 2025)

Tax Type Rate/Details Applies To Filing Frequency Due Date
Cannabis Excise None (no program)  —  —  —
General Sales Tax 6% state + local add‑ons (0–3%) All retail goods Monthly/Quarterly 20th of next period
State Income Tax Standard brackets; federal 280E applies All businesses Annually April 15
Medical CBD Sales Taxed as general retail Low‑THC/high‑CBD oil Monthly/Quarterly 20th of next period

Disclaimer: This guide is for informational purposes only. Always consult the IRS, the South Carolina Department of Revenue, and a qualified tax professional before making any business, tax, or compliance decisions.