SOUTH CAROLINA SALES AND USE TAX MANUAL

1 SOUTH CAROLINA department OF REVENUE POLICY DIVISION GooW. Hartley Powell, Do SOUTH CAROLINA SALES AND USE TAX MANUAL 2019 EDITION (THROUGH THE 2018 SESSION OF THE GENERAL ASSEMBLY) Introduction The purpose of this SALES and use tax MANUAL is to provide businesses, department of Revenue employees and tax professionals a central summary of information concerning SOUTH CAROLINA s SALES and use tax law and regulations. To that end, the MANUAL references specific authority, including the law, regulations, court cases, Attorney General Opinions, and department advisory While it is not possible to discuss every issue, this MANUAL strives to deal with a variety of issues.

2 In addition, due to changes in tax law as well as new court decisions, this MANUAL is a constant work-in-progress. With that in mind, your suggestions for improvements and areas of discussion for future editions are welcomed. Disclaimer This publication is written in general terms for widest possible use and may not contain all the specific requirements or provisions of authority. It is intended as a guide only, and the application of its contents to specific situations will depend on the particular circumstances involved. This publication does not constitute tax, legal, or other advice and may not be relied on as a substitute for obtaining professional advice or for researching up to date original sources of authority.

3 Nothing in this publication supersedes, alters, or otherwise changes provisions of the SOUTH CAROLINA code, regulations, or department advisory opinions. This publication does not represent official department policy. The department would appreciate any comments or notification of any errors. Such comments should be sent to Corey Smith or Walter Tarcza at: SOUTH CAROLINA department of Revenue Post Office Box 12265 Columbia, SC 29211 This book is up to date as of December 2018. Legislation passed, cases decided, or department advisory opinions issued after that date are not reflected in this publication unless otherwise specified.

4 1 department advisory opinions include revenue rulings, revenue procedures, private letter rulings, technical advice memorandums and information letters. References department Website. This publication cites many SOUTH CAROLINA code sections, regulations, attorney general opinions, and department advisory opinions (Revenue Procedures, Revenue Rulings, etc.) The full text of these references is available through the department s website at: Advisory Opinions by E-Mail. The department has an Advisory Opinion E-Mail Subscription Service. Persons who sign up for this free service will automatically receive draft, temporary, and final Revenue Rulings and Revenue Procedures, and final Private Letter Rulings and Information Letters by e-mail.

5 These statements provide guidance concerning the application of laws administered by the department . To sign up, go to the department s website and click on Resources, then Law & Policy, and then Sign up to receive Policy emails. Advisory Opinion Index. Advisory opinions issued by the department are available on the department s website and are indexed by both tax type and calendar year. To view these indexes, click on Resources, then Law & Policy. Other Sites. Also available through the department s website are Administrative Law Court decisions and proposed legislation at the General Assembly.

6 These sites can be accessed from the department s website by clicking on Resources, then Law & Policy, and then Helpful Links. Acknowledgements We would like to thank Hartley Powell, Director of the SOUTH CAROLINA department of Revenue, and Deana West, Deputy Director over Policy. We would also like to thank others who worked on and assisted with this publication including John McCormack, Jerilynn VanStory, Andrew Saleeby, Bob Thomas, Terry Carter, and the many department employees and retirees who contributed to this publication over the years. We would also like to express a special thanks to Richard Handel and Harry Cooper whose visions were the genesis for this project and Susan Shumpert who each year makes this MANUAL and its publication possible.

7 Table of Contents Chapter Page 1. Chapter 1 General Overview A. History .. Chapter 1, Page 1 B. Rates and Impositions .. Chapter 1, Page 2 C. Local SALES and Use Chapter 1, Page 3 D. Local Taxes Administered by the department .. Chapter 1, Page 3 E. Local Taxes Administered by Local Chapter 1, Page 5 F. Exclusions .. Chapter 1, Page 6 G. Partial Exemptions .. Chapter 1, Page 8 H. Full Exemptions .. Chapter 1, Page 9 2. Chapter 2 SALES Tax Impositions A. General SALES Tax Imposition .. Chapter 2, Page 1 B. Definitions .. Chapter 2, Page 2 C. Summary of the General SALES Tax Imposition.

8 Chapter 2, Page 3 D. Special SALES Tax Impositions .. Chapter 2, Page 4 E. SALES to Individuals 85 Years of Age and Older .. Chapter 2, Page 10 3. Chapter 3 Use Tax Impositions A. General Use Tax Imposition .. Chapter 3, Page 1 B. Definitions .. Chapter 3, Page 4 C. Summary of the General Use Tax Imposition .. Chapter 3, Page 6 D. Special Use Tax Impositions .. Chapter 3, Page 6 E. Temporary Storage Exclusion from the Use Tax .. Chapter 3, Page 11 F. SALES to, or Purchases by, Individuals 85 Years of Age and Older .. Chapter 3, Page 13 4. Chapter 4 Casual Excise Tax A. General Information.

9 Chapter 4, Page 1 B. Examples of Exempt Transfers .. Chapter 4, Page 3 C. SALES to Individuals 85 Years of Age and Older .. Chapter 4, Page 5 5. Chapter 5 SALES or Purchases at Retail .. Chapter 5, Page 1 6. Chapter 6 Gross Proceeds of Sale and SALES Price A. Gross Proceeds and SALES Price - What is Includable? .. Chapter 6, Page 1 B. Examples of Charges Included in Gross Proceeds and SALES Price .. Chapter 6, Page 2 C. Gross Proceeds and SALES Price - What is Not Includable? .. Chapter 6, Page 7 D. Examples of Charges not Included in Gross Proceeds and SALES Price.

10 Chapter 6, Page 9 Chapter Page 6. Chapter 6 Gross Proceeds of Sale and SALES Price (Continued) E. Gross Proceeds Withdrawals for Use .. Chapter 6, Page 11 F. Gross Proceeds Promotional Items Provided to Customers For No Consideration, a Nominal Consideration, or an Amount Significantly Below Cost .. Chapter 6, Page 20 G. Gross Proceeds Withdrawals for Use in Rental Business .. Chapter 6, Page 20 7. Chapter 7 Tangible Personal Property A. General Guidelines .. Chapter 7, Page 1 B. Service vs. Sale of Tangible Personal Property .. Chapter 7, Page 1 C.