Stay up to date with sales tax: Join our mailing list!

The South Carolina Department of Revenue has compiled a listing of current local sales and use taxes, including their exemptions, of thirty-three counties in the state. The tax type and the effective dates of the exemption include: state exemptions, maximum tax items, casual excise items, stamp purchases and certain food sales. Additionally, various types of local options taxes are listed and described, including those pertaining to school districts, capital projects tax and the transportation tax. The state notes that Information Letters are only issued with the intent to assist the public with general tax knowledge; they hold no precedence and are not binding on the public or the Department. (Information Letters 04-9, South Carolina Department of Revenue, April 14, 2004)


The South Carolina Department of Revenue outlines the department's opinion on what items are considered exempt from sales and use tax for purposes of manufacturing in Revenue Ruling 04-7 by referencing a few cases and providing specific examples. This advisory opinion addresses the issues and subsequent questions caused by the decisions made during 2003 in Springs Industries, Inc v SCDOR (99-ALJ-17-0153-CC) and Anonymous Taxpayer v SCDOR (02-ALJ-17-0350-CC). The Springs case is referenced because it changed the qualification standard for what is considered to be used in manufacturing from items that are "used directly" in the manufacturing process to items that are "integral and necessary" to the manufacturing process. This means that the exemption no longer applies strictly to machinery on the production line but now includes chemicals (as parts), conveyances, and quality control and other machines used as a function of the manufacturing process to the effect that it is an "ongoing, continuous activity." The Anonymous case is referenced in relation to the case Hercules Contractors and Engineers, Inc v SC Tax Commission (1984) to clarify that buildings do not functions as machines and are not exempt for manufacturing purposes. The issues addressed by means of specific taxability examples include: (1) chemicals, greases, oils, lubricants and coolants; (2) classification of machines used in manufacturing, maintenance, or storage; (3) conveyances; (4) manufacturing buildings; (5) administrative machines, furniture, equipment and supplies; and (6) protective clothing. In summary, a machine would be deemed exempt if it "is used at a manufacturing facility," and is considered "integral and necessary to the manufacturing process and the product being manufactured is being manufactured 'for sale.'" (Revenue Ruling 04-7, South Carolina Department of Revenue, April 21, 2004)


"not subject to sales tax since this transaction is not a sale of tangible personal property. The transaction is merely the exchange of money for an intangible evidence of a future right to telephone service. The taxable transaction takes place when the telephone calling card is used." However, South Carolina does consider prepaid calling cards purchased for use exclusively with wireless phones or other wireless devices to be subject to sales tax at the time of purchase. Calling cards will be taxable upon the initial purchase in Virginia as of July 1, 2004 and exempt from all other state or local utility taxes. The initial purchase of calling cards has been outlined in the definition of the term "tangible personal property," as it refers to personal property that may be seen weighed, measured, felt, or touch, or is in any other manner perceptible to the senses. (Revenue Ruling 04-4, South Carolina Department of Revenue, March 25, 2004; Virginia Ch 60 (HB 246), Laws 2004, signed March 8, 2004)


For example, the revenue ruling makes it clear that canned or customized software sold and delivered by tangible means is subject to sales and use tax in South Carolina. The ruling also states that canned and customized software sold and delivered electronically is tax exempt if no tangible property is transferred along with the transaction. In addition to other information, the revenue ruling also gives information about software transactions involving maintenance contracts. Please see Revenue Ruling #03-5 for complete details. (Revenue Ruling #03-5)


South Carolina has enacted a sales tax holiday that begins Friday, August 1, 2003 and continues through Sunday, August 3, 2003. This exemption, applicable to both state and local taxes, is granted toward purchases such as clothes, shoes, and school supplies. Items such as jewelry, cosmetics, furniture, clothing and shoe rentals, and items purchased for use in a trade or business are not exempt. (News Release, 2003 Sales Tax Holiday, Department of Revenue, July 2, 2003)



Scroll to Top