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Starting on September 1, 2011, sales of a warranty, service, or maintenance contract for tangible personal property are exempt from South Carolina sales and use tax, with limited exceptions, if purchased after the purchase of the tangible personal property. (S.B. 36, Laws 2011, effective June 8, 2011)


The South Carolina Department of Revenue has issued a letter ruling advising that monthly fixed charges billed by a natural gas company are subject to South Carolina sales and use tax because they are part of the overall agreement for the sale of natural gas. The charges are therefore taxable even if a customer does not use gas during a billing period. However, if the sale of natural gas is otherwise exempt, such as the sale of natural gas for residential purposes, the monthly fixed charges are not taxable. (Revenue Ruling 12-2, South Carolina Department of Revenue, March 20, 2012)


The South Carolina Department of Revenue has issued a revenue ruling to remind taxpayers that effective September 1, 2011, a warranty or maintenance contract purchased after the tangible personal property is purchased is no longer taxable, with limited exceptions. If the warranty or maintenance contract is purchased at the same time as the tangible personal property, it remains taxable, unless the sale is otherwise tax-exempt. South Carolina Revenue Ruling #03-5, concerning “Software and Software Maintenance Contracts” has been reinstated and is effective for sales of software and software maintenance contracts occurring on or after September 1, 2011. (Revenue Ruling 11-2, South Carolina Department of Revenue, November 18, 2011)


The Department of Revenue issued a ruling on the qualification of property temporarily stored in South Carolina. The Department ruled that property purchased at retail (not wholesale) outside of the state and purchased for primary use outside of the state is exempt from South Carolina use tax. The party claiming this exclusion must have records proving the known intended use at time of purchase and proof showing that the purchases were retail purchases and not wholesale. For purposes of this provision, "storage" means keeping property purchased in the state for any purpose other than sale or subsequent use outside the state. (Revenue Ruling 09-17, South Carolina Department of Revenue, November 19, 2009)


The South Carolina Department of Revenue has issued an updated revenue ruling on the exemptions for certain medicines, prosthetic devices and medical supplies. The ruling explains how exemptions are applied for these items, including:

(a) prescription medicine and prosthetic devices, therapeutic radiopharmaceuticals used to treat rheumatoid arthritis, cancer, lymphoma, leukemia, or related diseases, including prescription medicines used to relieve the effects of any such treatment;

(b) hypodermic needles, insulin, alcohol swabs, blood sugar testing strips, monolet lancets, dextrometer supplies, blood glucose meters, and other similar diabetic supplies sold to diabetics under the authorization and direction of a physician;

(c) prescription drugs dispensed to Medicare Part A patients residing in a nursing home are not considered sales to the nursing home and are not subject to the sales tax;

(c) prescription and over-the-counter medicines and medical supplies, including diabetic supplies, diabetic diagnostic equipment, and diabetic testing equipment, sold to a free health care clinic; and

(e) durable medical equipment and related supplies as defined under federal and state Medicaid and Medicare laws. (Revenue Ruling 10-2, South Carolina Department of Revenue, January 12, 2010)



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