South Carolina Updates Guidance on Taxability of Fuel Surcharges

The South Carolina Department of Revenue (DOR) has updated its guidance on the taxability of fuel surcharges charged by retailers delivering tangible personal property. Per the updated guidance, fuel surcharges charged by a retailer to the customer when delivering merchandise via its own vehicles are to be included in “gross proceeds of sales” or “sales price” and are therefore subject to sales and use tax, unless the transaction is otherwise exempt. The guidance provides several examples to illustrate the proper tax treatment of fuel surcharges. The DOR notes that questions have arisen as to the taxability of fuel surcharges in the face of rising fuel costs. This Revenue Ruling supersedes South Carolina Revenue Ruling #05-1 and all previous advisory opinions and any oral directives in conflict with it. (Revenue Ruling 22-12, South Carolina Department of Revenue, November 17, 2022)

Posted on November 30, 2022