Do candy and soft drinks stay exempt from South Carolina sales tax even though the state is removing them from SNAP eligibility?

Plain-English summary

South Carolina does not charge sales tax on unprepared food — groceries — under S.C. Code Ann. § 12-36-2120(75). That exemption has historically tracked the federal SNAP ("food stamp") list of eligible food.

South Carolina is launching a demonstration project called Healthy Food SC that, effective August 31, 2026, removes candy, energy drinks, soft drinks, and sweetened beverages (as defined by Executive Order No. 2025-30) from the items that can be purchased with USDA food coupons (SNAP).

The concern: if the state sales-tax exemption simply followed SNAP eligibility, those items could have lost their exemption and become taxable. To prevent that, Governor McMaster signed Bill H. 5208 on May 19, 2026 (effective immediately), amending § 12-36-2120(75) to say the unprepared food exemption is not impacted by "any demonstration project pursuant to United States Department of Agriculture regulations that would limit the use of food coupons on otherwise eligible items for a limited period of time."

Bottom line: candy, energy drinks, soft drinks, and sweetened beverages remain exempt from South Carolina sales tax as unprepared food — even though, starting August 31, 2026, they can no longer be bought with SNAP benefits under Healthy Food SC.

What this means for you

Grocery shoppers and SNAP recipients

Two different rules are now decoupled. Under Healthy Food SC, you can't use SNAP to buy candy, energy drinks, soft drinks, or sweetened beverages starting August 31, 2026 — but those items are still sales-tax-free as unprepared food when you buy them.

Grocery and convenience-store retailers

Don't start charging South Carolina sales tax on candy, soft drinks, energy drinks, or sweetened beverages just because Healthy Food SC removes them from SNAP eligibility. Bill H. 5208 keeps them within the § 12-36-2120(75) unprepared food exemption. (As always, prepared or hot food and items consumed on premises are a separate question.)

Tax professionals

The Act severs the state unprepared food exemption from the SNAP-eligibility list for the duration of a USDA demonstration project, so a SNAP-eligibility change does not automatically change sales-tax treatment. Watch the definitions in Executive Order No. 2025-30 for exactly which beverages and candy are covered.

Common questions

Q: Will candy and soft drinks be taxed in South Carolina once they're off SNAP?
A: No. Bill H. 5208 amended § 12-36-2120(75) so the unprepared food sales-tax exemption is not affected by a USDA demonstration project that limits food-coupon use. They remain exempt.

Q: What is Healthy Food SC?
A: A South Carolina demonstration project under USDA regulations that, effective August 31, 2026, restricts candy, energy drinks, soft drinks, and sweetened beverages from the foods that can be purchased with SNAP food coupons.

Q: When did the sales-tax clarification take effect?
A: May 19, 2026, when Governor McMaster signed Bill H. 5208.

Q: Which items are affected?
A: Candy, energy drinks, soft drinks, and sweetened beverages, as defined by Executive Order No. 2025-30.

Citations and references

Authority and statutes:

• S.C. Code Ann. § 12-4-320 (Department's authority to issue advisory opinions)
• SC Revenue Procedure #09-3
• S.C. Code Ann. § 12-36-2120(75) (unprepared food sales-tax exemption)
• Bill H. 5208 (2026 Act amending § 12-36-2120(75); effective May 19, 2026)
• Executive Order No. 2025-30 (defines the restricted candy, energy drinks, soft drinks, and sweetened beverages)

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL26-13.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE

300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 125, Columbia, South Carolina 29214-0575

SC INFORMATION LETTER #26-13
SUBJECT:

Unprepared Food – Amended Exemption
(Sales and Use Tax)

EFFECTIVE DATE: May 19, 2026
AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2014)
S.C. Code Ann. Section 1-23-10(4) (2005)
S.C. Revenue Procedure #09-3

SCOPE:

An Information Letter is a written statement issued to the
public to announce general information useful in complying
with the laws administered by the Department. An
Information Letter has no precedential value.

On May 19, 2026, Governor Henry McMaster signed Bill Number H. 5208 (the
“Act”), effective May 19, 2026. The Act amends Section 12-36-2120(75) by adding
language stating that the unprepared food exemption is not impacted by “any
demonstration project pursuant to United States Department of Agriculture
regulations that would limit the use of food coupons on otherwise eligible items for
a limited period of time.”
Under South Carolina’s approved demonstration project (Healthy Food SC),
effective August 31, 2026, certain food items 1 are restricted from the definition of
eligible foods that may be purchased with USDA food coupons. The Act makes
clear that those food items will continue to be exempt as unprepared food pursuant
to Section 12-36-2120(75).

1

The restricted food items include candy, energy drinks, soft drinks, and sweetened
beverages as defined by Executive Order No. 2025-30.