How did South Carolina sales tax apply to the requesting company's electric-vehicle charging stations?

Plain-English summary

South Carolina Private Letter Ruling #20-5 separates the electric-vehicle charging transaction into a wholesale purchase and a taxable retail sale.

The charging-station operator's purchase of electricity from utilities was a wholesale sale because the company bought the electricity for resale to charging customers. That utility sale was not subject to South Carolina sales tax.

The operator's sale of electricity to drivers was a taxable retail sale. South Carolina expressly includes sales of electricity within tangible personal property and imposes sales tax on gross proceeds from electricity sales.

Every charge tied to that retail electricity sale entered the tax base. The company charged based on charging time, added a session fee, and imposed an idling fee when a vehicle remained connected after charging finished. The ruling says charging fees, session fees, idling fees, and similar amounts were all taxable gross proceeds. The same retail-sale analysis would apply if regulatory approval later allowed billing by kilowatt-hour.

What this means for you

Charging-station operators

Purchase utility electricity for resale under the applicable wholesale treatment, then collect sales tax on the full amount charged to the driver. Do not exclude session or idling fees merely because they are not stated as the per-unit electricity price.

Utilities

The ruling treats electricity sold to a licensed retail merchant for resale at charging stations as a wholesale transaction rather than the final retail sale.

Billing teams

Configure the tax base to include time-based charging, per-session charges, post-charge idling fees, and any other charge that is part of the retail electricity transaction.

Common questions

Q: Is electricity tangible personal property in South Carolina?
A: Yes. Section 12-36-60 expressly includes sales of electricity.

Q: Was the utility's sale to the charging operator taxable?
A: No. It was a wholesale sale for resale to charging customers.

Q: Is an idling fee taxable even after charging is complete?
A: Yes. The ruling includes idling fees among the charges connected with the retail electricity sale and therefore within gross proceeds.

Citations and references

• S.C. Code Ann. § 12-36-60 — electricity as tangible personal property
• S.C. Code Ann. §§ 12-36-110 and 12-36-120 — retail and wholesale sales
• S.C. Code Ann. §§ 12-36-90 and 12-36-910(B)(2) — gross proceeds and sales of electricity
• S.C. Code Ann. §§ 12-23-10 and 12-23-20 — electric power tax noted in the ruling's footnote

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: PLR20-5.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 PRIVATE LETTER RULING #20-5

SUBJECT:

Sales of Electricity – Vehicle Charging Stations
(Sales Tax)

REFERENCES:

S.C. Code Ann. Section 12-36-60 (2014)
S.C. Code Ann. Section 12-36-90 (2014)
S.C. Code Ann. Section 12-36-110 (2014)
S.C. Code Ann. Section 12-36-120 (2014)
S.C. Code Ann. Section 12-36-910 (2014)

AUTHORITY:

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

SCOPE:

A Private Letter Ruling is an advisory opinion issued to a specific
taxpayer by the Department to apply principles of law to a specific set of
facts or a particular tax situation. It is the Department’s opinion limited to
the specific facts set forth, and is binding on agency personnel only with
respect to the person to whom it was issued and only until superseded or
modified by a change in statute, regulation, court decision, or another
Departmental advisory opinion, providing the representations made in the
request reflect an accurate statement of the material facts and the
transaction was carried out as proposed.

QUESTIONS

1. Are sales of electricity by utilities to 123 Company for its vehicle charging stations, as
   described in the facts, subject to South Carolina sales tax?
2. Are sales of electricity by 123 Company to customers at its vehicle charging stations, as
   described in the facts, subject to South Carolina sales tax?

CONCLUSIONS

1. Sales of electricity by utilities to 123 Company for its vehicle charging stations, as described
   in the facts, are wholesale sales not subject to South Carolina sales tax.
   1

2. Sales of electricity by 123 Company to its customers at its charging stations, as described in
the facts, are retail sales subject to South Carolina sales tax. All charges (i.e., charging fees,
session fees, idling fees, etc.) with respect to the retail sale of electricity are includable in
gross proceeds of sales and, therefore, subject to South Carolina sales tax.

FACTS
123 Company owns and operates electric vehicle charging stations in South Carolina. Customers
of 123 Company pay for electricity based on charging time, a session fee, and an “idling” fee if
the vehicle is left connected to a charger for longer than a specified time after the charge is
complete. In the future, subject to utility regulatory approval, 123 Company may charge for
electricity by kilowatt hour.

LAW AND DISCUSSION
Code Section 12-36-910(A) imposes the sales tax and provides:
A sales tax, equal to [six] 1 percent of the gross proceeds of sales, is imposed upon
every person engaged or continuing within this State in the business of selling
tangible personal property at retail.
Code Section 12-36-60 defines the term “tangible personal property” and states, in part:
“Tangible personal property” means personal property which may be seen,
weighed, measured, felt, touched, or which is in any other manner perceptible to
the senses. It also includes services and intangibles…and sales of electricity.
Therefore, the term tangible personal property includes the sale or use of services and
intangibles, including sales of electricity, which are subject to South Carolina sales or use taxes
under Chapter 36 of Title 12.
Sales of electricity are subject to sales tax under Chapter 36 of Title 12 pursuant to Code Section
12-36-910(B)(2), which imposes the tax on the “gross proceeds accruing or proceeding from the
sale of electricity.”
Code Section 12-36-110 defines the terms “retail sale” and “sale at retail” to mean, in part:
… all sales of tangible personal property except those defined as wholesale sales.
The quantity or sales price of goods sold is immaterial in determining if a sale is
at retail.

1

Code Section 12-36-1110 increased the state sales tax rate to 6% from 5% beginning June 2007.

2

Code Section 12-36-120 defines the terms “wholesale sale” and “sale at wholesale” to mean, in
part, a sale of:
(1) tangible personal property to licensed retail merchants, jobbers, dealers, or
wholesalers for resale, and do not include sales to users or consumers not for
resale.
Therefore, wholesale sales are defined, in part, as sales of tangible personal property (including
electricity) to licensed retail merchants for resale. Retail sales are defined as all sales of tangible
personal property (including electricity) except those defined as wholesale sales.
The basis or measure of the sales tax on retail sales is “gross proceeds of sales.” Gross proceeds
of sales means “the value proceeding or accruing from the sale, lease, or rental of tangible
personal property” without any deduction for the cost of materials, labor or service, or any other
expenses. Code Section 12-36-90(1)(b).
Based on the above, sales of electricity by utilities 2 to 123 Company for resale to customers at
vehicle charging stations are wholesale sales and, therefore, are not subject to South Carolina
sales tax.
Sales of electricity by 123 Company to its customers at its charging stations are retail sales
subject to South Carolina sales tax. All charges (i.e., charging fees, session fees, idling fees, etc.)
with respect to the retail sale of electricity are includable in gross proceeds of sales and,
therefore, subject to South Carolina sales tax.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/W. Hartley Powell
W. Hartley Powell, Director
July 7
, 2020
Columbia, South Carolina
CAVEAT: This advisory opinion is issued to the taxpayer requesting it on the assumption
that the taxpayer’s facts and circumstances, as stated, are correct. If the facts and
circumstances given are not correct, or if they change, then the taxpayer requesting the
advisory opinion may not rely on it. If the taxpayer relies on this advisory opinion, and the
Department discovers, upon examination, that the facts and circumstances are different in
any material respect from the facts and circumstances given in this advisory opinion, then
the advisory opinion will not afford the taxpayer any protection. It should be noted that
subsequent to the publication of this advisory opinion, changes in a statute, a regulation, or
case law could void the advisory opinion.
2

Persons engaged in the business of selling electricity for resale (wholesale sales), and public utilities and electric
cooperatives (not including municipalities) engaged in the business of selling electricity at retail, are liable for the
electric power tax unless the electricity has been previously taxed in South Carolina or the sale is otherwise exempt.
See Code Sections 12-23-10 and 12-23-20.

3