South Carolina Mileage and Vehicle Tax Records (2026): Bonus Add-Back, 3% Business Income Election and TNC Rules
General information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
South Carolina starts from federal taxable income, so a self-employed driver's federal mileage deduction carries over. If you claimed federal bonus depreciation, you add back the difference on SC1040 line e. Pass-through business income may qualify for a flat 3% rate. Rideshare companies need a permit from the Office of Regulatory Staff.
South Carolina follows most of the federal return, with one big vehicle exception: bonus depreciation. This guide covers what the South Carolina Department of Revenue, the Office of Regulatory Staff and the General Assembly say as of October 16, 2026.
The federal baseline every South Carolina driver starts from
Most vehicle deductions begin on your federal return. If you're self-employed, you can generally use the standard mileage rate or actual expenses for the business share of your car (IRS Topic 510). For 2026 the business rate is 72.5¢ per mile for January 1 to June 30 (IR-2025-128 / Notice 2026-10) and 76¢ per mile for July 1 to December 31 (IR-2026-29 / Announcement 2026-11) (IRS standard mileage rates). EVs use the same rates; see the 2026 EV mileage rate guide. Most employees can't deduct unreimbursed car expenses federally (Topic 510). IRS Publication 463 asks for each business trip's miles, date, destination and purpose, plus total miles. Commuting stays personal (commuting vs business miles).
How South Carolina treats vehicle deductions
The 2025 SC1040 instructions start the return from federal taxable income, then list South Carolina additions and subtractions. Because the starting point comes after federal deductions, a Schedule C vehicle deduction figured with the standard mileage rate or actual costs is already reflected. Lines a through e are additions you enter as positive numbers.
Depreciation: the bonus add-back
Under line e, other additions, the instructions say taxpayers who claim federal bonus depreciation must add back the difference between the bonus depreciation taken and the depreciation that would have been allowed without it. The department's Revenue Ruling #05-2 on federal conformity explains why: S.C. Code § 12-6-50(4) doesn't adopt IRC Section 168(k), so South Carolina doesn't allow bonus depreciation for any year. In practice that means a separate South Carolina depreciation schedule for the vehicle, with larger South Carolina deductions in later years. Ask your preparer to keep both schedules. See robotaxi fleet depreciation and Section 179.
The 3% active trade or business income election
Line l is the active trade or business income deduction. The instructions say you may be able to elect to have South Carolina active trade or business income from a pass-through business taxed at a flat 3% rate, figured on Form I-335. If you drive through an LLC or S corporation, ask your preparer whether it fits. Your vehicle expenses still reduce that business income first, so the log matters either way.
Rideshare (TNC) rules in South Carolina
South Carolina regulates TNCs statewide under the Transportation Network Company Act (S.C. Code § 58-23-1610 and following sections). Section 58-23-1620 requires a TNC permit from the Office of Regulatory Staff before operating, and the ORS TNC page lists the permitted companies. Section 58-23-1660 says payment is made through the digital network and the driver shall not accept cash. In 2026, the General Assembly passed H. 3474, which the Governor signed on May 15, 2026, as Act 136 (effective May 15, 2026, per the 2026 list of acts). It revises the Act's definitions of "personal vehicle" and "prearranged ride." Save your own trip receipts and annual summaries. See which rideshare miles count.
Robotaxis and autonomous vehicles in South Carolina
This guide doesn't cover South Carolina autonomous vehicle rules. If you're planning a driverless fleet in South Carolina, check SCDOT's current guidance and talk to an attorney. For fleet records, see robotaxi fleet tax basics.
What to keep in your South Carolina records
- Each business trip's date, start, destination, purpose and miles, plus total miles for the year (Pub 463); a weekly log counts as timely kept.
- Separate Business, Commute and Personal totals for Form 4562 Part V.
- Keep records until the period of limitations runs out, generally 3 years federally (IRS); ask your preparer about the state period.
- If you claimed bonus depreciation: keep a South Carolina depreciation schedule next to the federal one.
- For rideshare: download ride receipts and annual summaries for your federal Schedule C.
For the full list of log fields, see what the IRS asks you to record.
Example: 1,000 hypothetical business miles driven in September 2026 × 76¢ (IR-2026-29) = $760 at the federal standard rate. Miles driven in March 2026 would use 72.5¢ (IR-2025-128) instead, so keep each trip's date. Estimates, not tax advice.
One log for both returns
A South Carolina return doesn't call for a second mileage log; your preparer works from the same business, commuting and personal miles. CyberDeduct builds a mileage log around IRS Pub 463 from your Tesla's own trip and odometer data (Model S, 3, X, Y and Cybertruck). You connect your Tesla account once through Tesla's standard account sign-in (OAuth); CyberDeduct never sees or stores your password. Home/work rules and route templates label most trips Business, Commute or Personal; you tap to change any label and confirm the purpose. The dashboard shows your business-use percentage and warns you on the 28th if you're under 50%. You export a PDF or CSV log plus a Form 4562 Part V worksheet for your preparer. See how the log is built or see plans.
Sources (checked October 16, 2026)
- South Carolina Department of Revenue, 2025 SC1040 instructions
- South Carolina Department of Revenue, Revenue Ruling #05-2 (federal conformity and exceptions)
- S.C. Office of Regulatory Staff, TNCs
- S.C. Transportation Network Company Act (ORS copy)
- S.C. General Assembly, H. 3474 (2025-2026)
- S.C. General Assembly, 2026 acts
- South Carolina Department of Transportation
- IRS, Standard mileage rates; IRS Publication 463; IRS Topic 510
Frequently asked questions
Does South Carolina use my federal mileage deduction?
Generally yes for the self-employed. The SC1040 starts from federal taxable income, which already reflects Schedule C vehicle expenses.
Does South Carolina allow bonus depreciation?
No. The 2025 SC1040 instructions say you add back the difference between federal bonus depreciation and the depreciation allowed without it, on line e.
What is South Carolina's 3% business income rate?
Line l lets you elect to have active trade or business income from a pass-through business taxed at a flat 3%, figured on Form I-335.
Do South Carolina rideshare companies need a permit?
Yes. S.C. Code § 58-23-1620 requires a TNC permit from the Office of Regulatory Staff.
What did South Carolina change for TNCs in 2026?
Act 136 (H. 3474), signed May 15, 2026, revises the TNC Act's definitions of "personal vehicle" and "prearranged ride."
This article is general information, not tax or legal advice. Talk to your tax preparer or attorney about your situation. State laws and bill status change; check the linked sources for the current text.
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