Effective October 1, 2019, South Carolina clarified application of the sales tax exemption for electricity and other fuels used for residential purposes. Prior to this Ruling, the state relied on rate classifications used by power companies to determine classification as “residential” for purposes of the sales tax exemption. This Ruling replaces the reliance on rate classifications with respect to sales of electricity for use in primary residences, vacation homes and second homes.
A Questions and Answers section provides useful explanations, for example, the sale of electricity or fuel for use in a single family type home that is converted to business use – such as a professional office or restaurant – is not exempt from sales and use tax since the home is not being used for living purposes, the sale of electricity or fuel to a construction contractor for use during the construction and sale of a home (primary residence, vacation home, or second home) is not exempt either, however, the sale of electricity or fuel sold for use in a primary residence, vacation home or second home that is temporarily vacant (e.g. while the property is listed for sale or the owner is looking for another renter) remains exempt from sales and use tax, unless the property is no longer used for residential purposes. (Revenue Ruling 19-5, South Carolina Department of Revenue, July 7, 2019)