Under South Carolina's 2005 guidance, when did a retailer have to remit a county's local tax on delivered goods?

Plain-English summary

South Carolina Revenue Ruling #05-16 described a historical rule for retailers delivering tangible personal property into another county. It addressed local sales and use taxes collected centrally by the Department for counties and school districts, not local accommodations or prepared-meal taxes collected directly by counties or municipalities.

Under the ruling's pre-Wayfair framework, a retailer first needed physical-presence nexus with South Carolina. It then had to remit the delivery county's tax when its activities purposefully used that county's economic market or targeted its residents, even without a physical location in that county.

Delivery by the retailer's own vehicle or a contract carrier required remittance of the destination county's tax. For delivery by a common carrier such as UPS or mail, the ruling looked to county contacts such as property, personnel, agents, or advertising reaching the delivery county. The examples were not exhaustive, and the ruling warned that the legal standard could evolve.

It did evolve. RR 09-9 modified RR 05-16, RR 18-15 later superseded both the 2009 ruling and RR 05-16, and RR 22-8 then superseded RR 18-15.

What this means for you

Historical transaction review

For a transaction governed by this old framework, identify the delivery county, the delivery method, and the retailer's South Carolina and county-level contacts. The ruling treated own-vehicle and contract-carrier deliveries more directly than common-carrier shipments.

Retailers using common carriers

The ruling did not say every common-carrier delivery automatically created a county duty. It looked for purposeful county contacts, including facilities, property, personnel, agents, or advertising reaching county residents.

Current retailers and remote sellers

Do not configure current collection from this 2005 ruling. Its physical-presence premise predates later rulings and the post-Wayfair economic-nexus framework reflected in RR 22-8.

Common questions

Q: Did RR 05-16 cover every local tax?
A: No. It covered general local sales and use taxes collected by the Department for counties and school districts, not directly collected local accommodations or prepared-meal taxes.

Q: What if the retailer delivered in its own truck?
A: The ruling said the retailer had to remit the delivery county's tax.

Q: What if UPS or the mail delivered the product?
A: Under the ruling, remittance depended on whether the retailer had sufficient purposeful contacts with the delivery county.

Q: Is RR 05-16 current?
A: No. Later rulings modified and superseded it; RR 22-8 is the latest successor identified by the official ruling chain used here.

Citations and references

• S.C. Code Ann. Title 12, Chapter 36 — state sales and use tax framework cited by the ruling
• S.C. Code Ann. Title 4, Chapters 10 and 37 — local sales and use tax authority cited by the ruling
• Quill Corp. v. North Dakota, 504 U.S. 298 (1992) — pre-Wayfair nexus authority quoted by RR 05-16
• SC Revenue Ruling 09-9 — modified RR 05-16
• SC Revenue Ruling 18-15 — later superseded RR 09-9 and RR 05-16
• SC Revenue Ruling 22-8 — later superseded RR 18-15

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: RR05-16.pdf
• Official RR 09-9 PDF: RR09-9.pdf
• Official RR 18-15 PDF: RR18-15.pdf
• Official RR 22-8 PDF: RR22-8.pdf

Original ruling text

State of South Carolina
Department of Revenue
301 Gervais Street, P.O. Box 125, Columbia, South Carolina 29214
Department Website: www.sctax.org
SC REVENUE RULING #05-16

SUBJECT:

Local Sales and Use Taxes
Remittance of the Tax by Retailers
(Sales and Use Tax)

EFFECTIVE DATE:

January 1, 2006

MODIFIES:

SC Revenue Ruling #91-17, SC Revenue Ruling #96-9, and all previous
advisory opinions and any oral directives in conflict herewith.

REFERENCES:

Title 12, Chapter 36 of SC Code of Laws (2000; Supp. 2004)
Title 4, Chapter 10 of SC Code of Laws (2000; Supp. 2004)
Title 4, Chapter 37 of SC Code of Laws (2000; Supp. 2004)
School District and Other Local Sales and Use Tax Laws1

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2000)
S. C. Code Ann. Section 1-23-10(4) (Supp. 2004)
SC Revenue Procedure #03-1

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public
and to Department personnel. It is a written statement issued to apply
principles of tax law to a specific set of facts or a general category of
taxpayers. A Revenue Ruling is an advisory opinion; it does not have the
force or effect of law and is not binding on the public. It is, however, the
Department’s position and is binding on agency personnel until
superseded or modified by a change in statute, regulation, court decision,
or advisory opinion.

INTRODUCTION:
The South Carolina Code of Laws allows the imposition of various types of local sales and use
taxes. As such, the citizens of a county, depending upon the needs within the county, may
impose one or several local sales and use taxes.
The Department periodically publishes a chart with the various types of local sales and use taxes
collected by the Department and the exemptions allowed under each tax. This chart can be found
on the Department’s website (www.sctax.org) under “Law and Policy” (See “Dept. Advisory
Opinions”).
1

Many school district and other local sales and use tax laws have not been codified. For information as to
the act number assigned to, and the year of enactment of, such local sales and use tax laws, see SC
Information Letter #05-15. SC Information Letter #05-15 contains the most recently published
information; updated information will be published on the Department’s website (under “Law and Policy”
– “Dept. Advisory Opinions”) as warranted.

1

Note: This advisory opinion only addresses the general local sales and use taxes collected
by the Department of Revenue on behalf of the counties and school districts. It does not
address the local taxes on sales of accommodations or on sales of prepared meals that are
collected directly by municipalities and counties.
PURPOSE:
The purpose of this advisory opinion is to modify previous Department advisory opinions with
respect to the criteria that must be met to require a retailer to remit a county’s sales and use tax
when delivering the product to a purchaser located in another county.
With respect to deliveries by retailers into other counties, an opinion issued by South Carolina
Attorney General issued on July 30, 1991 concerning the Local Option Sales and Use Tax
provides guidance.
The opinion holds that a "retail sale of tangible personal property is not subject to the local
option sales tax when the seller located within a county that imposes the tax is required to
deliver the property to the purchaser outside of that county." The opinion stated in a footnote
that:
This opinion does not treat the question of whether the seller is required to collect the use
tax when the property is delivered into another county that also imposes the local option
sales and use tax. Such is dependent upon the controlling facts and the extent of the
seller's activity with that county. Such a sale, however, would be subject to the local
option use tax in the county wherein the sale was consummated by delivery. (Emphasis
added.)
Essentially, the determination as to when a retailer who is delivering a product into another
county must remit that county’s tax “is dependent upon the controlling facts and the extent of the
seller's activity with that county” and has been modeled after the criteria established for
determining when a retailer in another state must remit the state tax. Since the issuance of the SC
Revenue Ruling #91-17 and SC Revenue Ruling #96-9, the case law in this area has evolved.
LAW:
The issue in question is a retailer’s responsibility for remitting a county’s tax when a retailer is
delivering a product into another county.
The local sales and use taxes collected by the Department of behalf of local jurisdictions are
authorized by state law. There is support for the position that once a retailer has established Due
Process Clause and Commerce Clause nexus with South Carolina the retailer has Due Process
Clause and Commerce Clause nexus with every county in the state and must remit local taxes for
any county into which deliveries are made by, or on behalf of, the retailer. As a result of the
previously cited 1991 Opinion of the Attorney General, the Department has not enforced this
position, but could or may take this position in the future. Because of the Department’s reliance
on the 1991 opinion, the Department will not take this position without notice and any such
change would only be implemented on a prospective basis.
2

Therefore, in reviewing this issue in light of the Department’s reliance on the 1991 Opinion of
the Attorney General and subsequent case law, it must be first noted that before a retailer can be
required to remit a county’s tax, the retailer must have Due Process Clause and Commerce
Clause sales and use tax nexus.
Commerce Clause nexus for sales and use tax purposes requires a physical presence. Examples
of physical presence giving rise to Commerce Clause nexus for sales and use tax purposes
include, but are not limited to, maintaining (temporarily or permanently) an office, warehouse,
distribution house, sales house, other place of business, or property of any kind in the state or
having (temporarily or permanently) an agent, representative (including delivery personnel and
independent contractors acting on behalf of the retailer), salesman, or employee operating within
the state.
Once the retailer has established Commerce Clause nexus with South Carolina, the next issue
with respect to the remittance of a county’s tax is whether the retailer has Due Process nexus
with the county of delivery. (Commerce Clause nexus involves interstate commerce and is not
applicable with respect to the county tax once Commerce Clause nexus with the state is
established.)
In Quill Corp. v. North Dakota, 504 US 298, 112 S.Ct. 1904, 119 L. Ed 2d. 91 (1992), the Court
stated:
The Due Process Clause “requires some definite link, some minimum connection,
between state and the person, property or transaction it seeks to tax,” Miller Bros. Co. v.
Maryland 347 U.S. 340, 344-345 (1954), and that the “income attributed to the State for
tax purposes must be rationally related to 'values connected with the taxing State.'”
Moorman Mfg. Co. v. Bair, 437 U.S. 267, 273 (1978) (citation omitted). …

Our due process jurisprudence has evolved substantially in the 25 years since Bellas
Hess, particularly in the area of judicial jurisdiction. Building on the seminal case of
International Shoe Co. v. Washington, 326 U.S. 310 (1945) , we have framed the relevant
inquiry as whether a defendant had minimum contacts with the jurisdiction “such that the
maintenance of the suit does not offend 'traditional notions of fair play and substantial
justice.'” Id., at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). In that spirit,
we have abandoned more formalistic tests that focused on a defendant's “presence”
within a State in favor of a more flexible inquiry into whether a defendant's contacts with
the forum made it reasonable, in the context of our federal system of government, to
require it to defend the suit in that State. In Shaffer v. Heitner, 433 U.S. 186, 212 (1977) ,
the Court extended the flexible approach that International Shoe had prescribed for
purposes of in personam jurisdiction to in rem jurisdiction, concluding that “all assertions
of state-court jurisdiction must be evaluated according to the standards set forth in
International Shoe and its progeny.”

3

Applying these principles, we have held that if a foreign corporation purposefully avails
itself of the benefits of an economic market in the forum State, it may subject itself to the
State's in personam jurisdiction even if it has no physical presence in the State. As we
explained in Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985):
“Jurisdiction in these circumstances may not be avoided merely because the
defendant did not physically enter the forum State. Although territorial presence
frequently will enhance a potential defendant's affiliation with a State and reinforce
the reasonable foreseeability of suit there, it is an inescapable fact of modern
commercial life that a substantial amount of business is transacted solely by mail and
wire communications across state lines, thus obviating the need for physical presence
within a State in which business is conducted. So long as a commercial actor's efforts
are 'purposefully directed' toward residents of another State, we have consistently
rejected the notion that an absence of physical contacts can defeat personal
jurisdiction there. Id., at 476 (emphasis in original).
Comparable reasoning justifies the imposition of the collection duty on a mail-order
house that is engaged in continuous and widespread solicitation of business within a
State. Such a corporation clearly has “fair warning that its activity may subject it to the
jurisdiction of a foreign sovereign.” Shaffer v. Heitner, 433 U.S., at 218 (STEVENS, J.,
concurring in judgment). In “modern commercial life” it matters little that such
solicitation is accomplished by a deluge of catalogs rather than a phalanx of drummers:
the requirements of due process are met irrespective of a corporation's lack of physical
presence in the taxing State. Thus, to the extent that our decisions have indicated that the
Due Process Clause requires physical presence in a State for the imposition of duty to
collect a use tax, we overrule those holdings as superseded by developments in the law of
due process.
Based on the above, if a retailer that has established Commerce Clause nexus with South
Carolina purposefully avails itself of the benefits of the economic market a county or it has
purposefully directed its efforts toward the residents of a county, it is subject to that county’s
jurisdiction even if it has no physical presence in the county.
CONCLUSION:
The following gives examples of criteria that if met will require a retailer that has a physical
presence in South Carolina to remit a county's tax 2 and therefore modifies SC Revenue Ruling

91-17, SC Revenue Ruling #96-9, and all previous advisory opinions and any oral directives in

conflict with it. 3
2

Presently, all local taxes administered and collected by the Department of Revenue on behalf of local
jurisdictions are administered and collected on a county-wide basis. These criteria, unless otherwise
indicated in legislation enacted by the General Assembly, will also apply to any future sales or use taxes
administered and collected by the Department of Revenue on behalf of a jurisdiction on a county-wide or
other basis.
3
This advisory opinion specifically modifies Question #3 in both SC Revenue Ruling #91-17 and SC
Revenue Ruling #96-9.

4

Whether or not a retailer can be required to remit a county's tax is dependent upon the
controlling facts and the extent of the seller's activities with the county into which tangible
personal property is delivered.
In summary, if a retailer that has established Commerce Clause nexus with South Carolina
purposefully avails itself of the benefits of the economic market of a county or it has
purposefully directed it efforts toward the residents of a county, it has a minimal connection with
that county sufficient to subject it to that county’s jurisdiction and therefore require it to remit
the county’s tax on its deliveries into that county, even if it has no physical presence in that
particular county.
Examples of when a retailer that has established Commerce Clause nexus with South Carolina
must remit a county’s sales and use tax include, but are not limited to:
Retailers Using Their Own Vehicles: A retailer is required to remit a county's tax if the
retailer is shipping property into the county using his own vehicles (whether owned or
leased).
Retailers Using a Contract Carrier: A retailer is required to remit a county's tax if the
retailer is shipping property into the county using a contract carrier (an independent or
related company working specifically for or otherwise representing the retailer with
respect to the delivery.)
Retailers Using a Common Carrier: A retailer is required to remit a county's tax if the
retailer is shipping property into the county using a common carrier (e.g. UPS, the mail),
and the retailer is subject to the county of delivery’s jurisdiction (Due Process nexus has
been established with the county of delivery).
Examples of when a retailer is subject to the county of delivery’s jurisdiction include, but
are not limited to, the following:
(a) The retailer maintains, temporarily or permanently, directly or by subsidiary, an
office, warehouse, distribution house, sales house, other place of business, or property
of any kind in the county of delivery.
(b) The retailer or a subsidiary has, temporarily or permanently, an agent,
representative (including delivery personnel and independent contractors acting on
behalf of the retailer), salesman, or employee operating within the county of delivery.
(c) The retailer advertises via advertising media located in the county of delivery (e.g.
newspapers, television, cable systems, and radio).
(d) The retailer advertises via advertising media located outside the county but which
has coverage within the county of delivery (e.g. newspapers, television, cable systems,
and radio).

5

Please note that these statements are only examples and that there are other circumstances
in which a retailer must remit a county’s tax with respect to deliveries into that county.
Retailers must be aware that as the courts address this issue, the requirements for
remitting a county’s tax may evolve and the retailer will be liable for the tax if the retailer
fails to remit the tax when it has a connection with that county sufficient to require it to
remit that county’s tax. If upon being audited, it is found a retailer has a sufficient
connection with a particular county so as to require remittance of that county's tax, but
the retailer has failed to do so, the Department will assess the retailer for that county's
tax.

SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Burnet R. Maybank III
Burnet R. Maybank III, Director

October 31
, 2005
Columbia, South Carolina

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