Personal and Corporate Income Taxpayers’ Revenue Procedure
The South Carolina Department of Revenue has issued a revenue procedure to assist personal and corporate income taxpayers in complying with the relevant code sections concerning withholding on the state income of nonresident shareholders and partners. A revenue procedure is a statement which provides information of a procedural nature. It is valid and remains in effect until superseded or modified by a change in the statute or regulations or a subsequent court decision, revenue procedure, or revenue ruling.
Under the applicable statute, S corporations and partnerships are required to withhold income tax at the rate of 5 percent on nonresident S corporation shareholders’ and nonresident partners’ shares of South Carolina taxable income. An S corporation or partnership (including an LLC taxed as an S corporation or partnership) may file a composite individual income tax return on behalf of certain nonresident shareholders or partners. The revenue procedure discusses general withholding requirements, procedure, and exceptions; specific questions concerning Form I-309, Nonresident Shareholder or Partner Affidavit and Agreement Income Tax Withholding; and specific questions concerning Form SC I-338, Composite Return Affidavit.