The South Carolina Department of Revenue issued a revenue ruling to advise taxpayers on the treatment of warranties, maintenance contracts and similar service contracts. The state advised that tax was due on the sale or renewal of service contracts whether or not they were purchased in conjunction with the tangible personal property. If, however, the property sold is exempt from sales and use tax, the service contract charge would also be exempt. Also exempt from tax are parts used in repair of defective property if they are given without charge, sales tax was charged on the defective part or on the sale of the property on which the defective property was part, and the holder of the warrantee is not charged for labor or materials. (South Carolina Revenue Ruling #06-9, Effective Oct 1, 2005, Released November 16, 2006)