IntroductionThe purpose of this sales and use tax manual is to provide businesses, Department of Revenueemployees and tax professionals a central summary of information concerning South Carolina’ssales 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 advisoryopinions. 1While it is not possible to discuss every issue, this manual strives to deal with a variety of issues.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 ofdiscussion for future editions are welcomed.DisclaimerThis publication is written in general terms for widest possible use and may not contain all thespecific requirements or provisions of authority. It is intended as a guide only, and theapplication of its contents to specific situations will depend on the particular circumstancesinvolved. This publication does not constitute tax, legal, or other advice and may not be relied onas a substitute for obtaining professional advice or for researching up to date original sources ofauthority. Nothing in this publication supersedes, alters, or otherwise changes provisions of theSouth Carolina code, regulations, or Department advisory opinions. This publication does notrepresent official Department policy. The Department would appreciate any comments ornotification of any errors. Such comments should be sent to Corey Smith or Walter Tarcza at:South Carolina Department of RevenuePost Office Box 12265Columbia, SC vThis book is up to date as of December 2018. Legislation passed, cases decided, or Departmentadvisory opinions issued after that date are not reflected in this publication unless otherwisespecified.1Department advisory opinions include revenue rulings, revenue procedures, private letter rulings, technical advicememorandums and information letters.

ReferencesDepartment Website. This publication cites many South Carolina code sections, regulations,attorney general opinions, and Department advisory opinions (Revenue Procedures, RevenueRulings, etc.) The full text of these references is available through the Department’s website Opinions by E-Mail. The Department has an “Advisory Opinion E-Mail SubscriptionService.” 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 andInformation Letters by e-mail. These statements provide guidance concerning the application oflaws 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 theDepartment’s website and are indexed by both tax type and calendar year. To view theseindexes, click on “Resources,” then “Law & Policy.”Other Sites. Also available through the Department’s website are Administrative Law Courtdecisions and proposed legislation at the General Assembly. These sites can be accessed fromthe Department’s website by clicking on “Resources,” then “Law & Policy,” and then “HelpfulLinks.”AcknowledgementsWe 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 includingJohn McCormack, Jerilynn VanStory, Andrew Saleeby, Bob Thomas, Terry Carter, and themany 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 whosevisions were the genesis for this project and Susan Shumpert who each year makes this manualand its publication possible.

Table of ContentsChapterPage1. Chapter 1 – General OverviewA. History.B. Rates and Impositions .C. Local Sales and Use Taxes.D. Local Taxes Administered by the Department .E. Local Taxes Administered by Local Governments.F. Exclusions .G. Partial Exemptions .H. Full Exemptions .Chapter 1, Page 1Chapter 1, Page 2Chapter 1, Page 3Chapter 1, Page 3Chapter 1, Page 5Chapter 1, Page 6Chapter 1, Page 8Chapter 1, Page 92. Chapter 2 – Sales Tax ImpositionsA. General Sales Tax Imposition .B. Definitions.C. Summary of the General Sales Tax Imposition .D. Special Sales Tax Impositions .E. Sales to Individuals 85 Years of Age and Older .Chapter 2, Page 1Chapter 2, Page 2Chapter 2, Page 3Chapter 2, Page 4Chapter 2, Page 103. Chapter 3 – Use Tax ImpositionsA. General Use Tax Imposition .B. Definitions.C. Summary of the General Use Tax Imposition .D. Special Use Tax Impositions .E. Temporary Storage – Exclusion from the Use Tax .F. Sales to, or Purchases by, Individuals 85 Years of Ageand Older .Chapter 3, Page 1Chapter 3, Page 4Chapter 3, Page 6Chapter 3, Page 6Chapter 3, Page 11Chapter 3, Page 134. Chapter 4 – Casual Excise TaxA. General Information .B. Examples of Exempt Transfers .C. Sales to Individuals 85 Years of Age and Older .Chapter 4, Page 1Chapter 4, Page 3Chapter 4, Page 55. Chapter 5 – Sales or Purchases at Retail .Chapter 5, Page 16. Chapter 6 – “Gross Proceeds of Sale” and “Sales Price”A. Gross Proceeds and Sales Price - What is Includable? .B. Examples of Charges Included in “Gross Proceeds”and “Sales Price”.C. Gross Proceeds and Sales Price - What is Not Includable? .D. Examples of Charges not Included in “Gross Proceeds”and “Sales Price”.Chapter 6, Page 1Chapter 6, Page 2Chapter 6, Page 7Chapter 6, Page 9

ChapterPage6. Chapter 6 – “Gross Proceeds of Sale” and “Sales Price” (Continued)E. Gross Proceeds – Withdrawals for Use .Chapter 6, Page 11F. Gross Proceeds – Promotional Items Provided to CustomersFor No Consideration, a Nominal Consideration, or anAmount Significantly Below Cost .Chapter 6, Page 20G. Gross Proceeds – Withdrawals for Use in Rental Business .Chapter 6, Page 207. Chapter 7 – Tangible Personal PropertyA. General Guidelines .B. Service vs. Sale of Tangible Personal Property .C. Examples of Persons Engaged in the Business of SellingTangible Personal Property at Retail .D. Examples of Persons Engaged in the Business of Selling aNon-Taxable Service .E. Sale of Tangible Personal Property vs. Improvement toReal Property .Chapter 7, Page 1Chapter 7, Page 1Chapter 7, Page 3Chapter 7, Page 4Chapter 7, Page 58. Chapter 8 – Exclusions .Chapter 8, Page 19. Chapter 9 – ExemptionsA. Exemptions Authorized under the Sales and Use Tax Law(Chapter 36 of Title 12) .B. Other Sales and Use Tax Exemptions Authorized by theGeneral Assembly .Chapter 9, Page 110. Chapter 10 – Maximum Tax ItemsA. General Information .B. Boats, Boat Motors, and Boat Trailers – Sold for PersonalUse .C. Manufactured Homes .D. Musical Instruments and Office Equipment Sold toReligious Organizations .Exhibit A – Infrastructure Maintenance Fee, Sales/Use Tax, andand Casual Excise Tax Implications of Purchases by SCResidents, Nonresidents, and Military Personnel .11. Chapter 11 – AccommodationsA. General Information .B. Transactions Not Subject to the Sales Tax onAccommodations .C. Additional Guest Charges .D. Hurricane Insurance .Chapter 9, Page 21Chapter 10, Page 1Chapter 10, Page 5Chapter 10, Page 6Chapter 10, Page 8Chapter 10, Page 9Chapter 11, Page 1Chapter 11, Page 7Chapter 11, Page 12Chapter 11, Page 13

Chapter11. Chapter 11 – Accommodations (Continued)E. Cancellations of Accommodations .F. Purchases by Persons Furnishing Accommodations.Exhibit A – SC Regulation 117-307.1 Examples of theApplication of Tax to Various Charges Imposed byHotels, Motels, and Other Facilities .12. Chapter 12 – Local Sales and Use TaxesA. General Information .B. Types of Local Sales and Use Taxes .C. Local Sales and Use Tax Due Dependent on County orMunicipality of Delivery.D. Retailer’s Responsibility to Remit Local Sales and Use Taxes .E. Purchasers – Reporting Requirements .F. Transactions Exempt from Local Sales and Use Taxes .Exhibit A – Local Tax Charts and Transactions Exempt fromLocal Sales and Use Taxes as of May 1, 2019.13. Chapter 13 – NexusA. General Information .B. Economic Nexus Standards .C. Physical Nexus Standards .D. Qualifications to SC Revenue Ruling #14-4 Responses .E. Responses .Exhibit A – Persons Contracting with State Commercial PrinterNexus Safe Harbor Statute Code Section 12-36-75 .14. Chapter 14 – Manufacturers, Processors, and CompoundersA. General Information .B. Machines, Parts, and Attachments .C. Machine Exemption – General Rule .D. Machines – Replacement Parts and Attachments .E. Examples of Exempt Machines or Machine Parts .F. Examples of Non-Exempt Machines or Parts .G. Machines – A Structure versus a Building .H. Pollution Abatement Machines .I. Machines Owned by Someone Other Than a Manufacturer .J. Machines Used Substantially in Manufacturing(Dual Usage Machines).K. Tangible Personal Property that is an “Ingredient orComponent Part” or “Used Directly” in the Process .L. Electricity .M. Coal, Coke, and Other Fuel.N. Fuel Used by Aircraft Manufacturer .PageChapter 11, Page 14Chapter 11, Page 15Chapter 11, Page 16Chapter 12, Page 1Chapter 12, Page 2Chapter 12, Page 5Chapter 12, Page 6Chapter 12, Page 7Chapter 12, Page 7Chapter 12, Page 8Chapter 13, Page 1Chapter 13, Page 2Chapter 13, Page 4Chapter 13, Page 4Chapter 13, Page 6Chapter 13, Page 15Chapter 14, Page 1Chapter 14, Page 1Chapter 14, Page 3Chapter 14, Page 4Chapter 14, Page 4Chapter 14, Page 5Chapter 14, Page 6Chapter 14, Page 6Chapter 14, Page 7Chapter 14, Page 7Chapter 14, Page 8Chapter 14, Page 8Chapter 14, Page 9Chapter 14, Page 9

ChapterPage14. Chapter 14 – Manufacturers, Processors, and Compounders (Continued)O. Packaging .Chapter 14, Page 10P. Sales for Resale or Wholesale Sales . Chapter 14, Page 10Q. Material Handling Systems and Equipment.Chapter 14, Page 11R. Computer Equipment .Chapter 14, Page 12S. Construction Material .Chapter 14, Page 1315. Chapter 15 – AgricultureA. General Information .B. Machines, Parts and Attachments .C. Livestock .D. Feed .E. Insecticides, Chemicals, Fertilizers, Soil Conditioners,Seeds and Seedlings .F. Containers and Labels .G. Fuel .H. Electricity and Gas .I. Building Materials, Supplies, Fixtures and Equipment ForCommercial Housing of Poultry and Livestock.J. Sales by Farmers .K. Hatcheries .16. Chapter 16 – Construction ContractorsA. General Information .B. Retailer vs. Contractor .C. Construction Contracts with Manufacturers .D. Light Construction Equipment .E. Construction Material Used to Construct a SingleManufacturing or Distribution Facility .F. Contracts with the Federal Government .G. Contracts with State, County and Municipal Governments .H. Contractors that Manufacture or Fabricate Items thatthey will Use in Constructing Real Property .I. Transient Construction Property .J. Local Sales and Use Taxes.17. Chapter 17 – CommunicationsA. Exemptions and Exclusions .B. Taxable Communications Services .C. Non-Taxable Communication Services .D. “Bundled Transactions” .Chapter 15, Page 1Chapter 15, Page 1Chapter 15, Page 2Chapter 15, Page 3Chapter 15, Page 3Chapter 15, Page 4Chapter 15, Page 4Chapter 15, Page 4Chapter 15, Page 5Chapter 15, Page 6Chapter 15, Page 6Chapter 16, Page 1Chapter 16, Page 2Chapter 16, Page 7Chapter 16, Page 8Chapter 16, Page 8Chapter 16, Page 9Chapter 16, Page 9Chapter 16, Page 10Chapter 16, Page 12Chapter 16, Page 13Chapter 17, Page 2Chapter 17, Page 3Chapter 17, Page 6Chapter 17, Page 7

Chapter18. Chapter 18 – Catawba Indian Reservation – State and TribalSales and Use TaxesA. The Catawba Indian Claims Settlement Act .B. Application of State and Tribal Sales and Use Taxes toSales of Tangible Personal Property Delivered on theReservation .C. Purchases by the Tribe for Tribal Government Functions .D. Artifacts Made by Members of the Tribe .E. Sales on the Reservation .F. Tangible Personal Property Made by Members of theTribe (Other than Artifacts) .G. Accommodations .H. Maximum Tax Items .19. Chapter 19 – Motion Picture Production CompaniesA. “Motion Picture Production Company”Comprehensive Exemption .B. “Motion Picture Company”Limited Exemption for Supplies and Equipment.PageChapter 18, Page 1Chapter 18, Page 3Chapter 18, Page 4Chapter 18, Page 4Chapter 18, Page 5Chapter 18, Page 5Chapter 18, Page 6Chapter 18, Page 6Chapter 19, Page 1Chapter 19, Page 620. Chapter 20 – Medicines, Prosthetics and Medical SuppliesA. Exemptions for Medicines, Prosthetics Devices, and OtherMedical Supplies .B. Other Relevant Exemptions .Chapter 20, Page 1Chapter 20, Page 421. Chapter 21 – Unprepared Food ExemptionRegulation on Unprepared Food Exemption .Chapter 21, Page 122. Chapter 22 – Administrative RequirementsA. Retail Licenses .B. Obtaining a Retail License .C. Operating Without a Retail License – Penalty .D. Returning a License .E. Purchaser’s Certificate of Registration .F. Special Events Returns .G. Types of Paper Returns .H. Reporting Requirements .I. Reporting and Paying the Tax Electronically .J. Discount for Timely Payment .K. Cash Deposit or Bond .L. Recordkeeping .M. Assessments .