How did South Carolina apply sales tax, admissions tax, alcohol permits, and liquor-by-the-drink tax to nonprofit fundraising events?

Plain-English summary

This ruling is a broad 2010 guide to South Carolina nonprofit fundraisers. Its core message is that nonprofit status alone does not make every event tax-free. The result depends on the real object of the payment, the organization's eligibility for specific exemptions, who makes a retail sale, whether guests pay to enter a place of amusement, and how alcohol is provided.

A genuine charitable contribution was not treated as a sale or paid admission in the ruling's $1,000-per-plate example, where the meal cost only $20 and the true object was the donation. By contrast, when guests paid market-like amounts for meals, entertainment, drinks, or goods, the relevant part of the charge was generally subject to sales tax or admissions tax unless a statutory nonprofit exemption applied.

Alcohol rules were separate. The ruling treated alcohol as sold whenever consideration was required for the event—including an admission charge, donation, ticket, meal charge, or per-drink charge—and identified different temporary permits for member-and-guest events and events open to the public. Sales under the specified nonprofit temporary liquor permits were excluded from the 5% liquor-by-the-drink excise tax.

What this means for you

Nonprofit event organizers

Break the event into components: donation, meal, entertainment or admission, tangible goods, and alcohol. A single ticket can contain both a taxable meal amount and a taxable admission amount. Qualifying organizations could seek separate sales-tax and admissions-tax exemptions under §§ 12-36-2120(41) and 12-21-2420.

Churches and charities selling meals

Using the profit for charity did not by itself remove sales tax. The ruling's church dinner was a $5.50 retail meal even though $1 funded youth programs. It became exempt only if the church qualified under § 12-36-2120(41) and met the Department's exemption process described in the ruling.

Nonprofits conducting auctions

Who counts as the retailer matters. A licensed auctioneer engaged in retail sales—or an auction house on whose behalf the auctioneer acts—was liable for tax on auction gross proceeds. If no retail auctioneer or auction house conducted the sale, the nonprofit was the retailer unless its sales qualified for the nonprofit exemption.

Event and alcohol-licensing professionals

The ruling distinguished member-and-guest liquor events under § 61-6-2000 from general-public events under § 61-6-510, with beer-and-wine authority under Title 61. Because this guidance is from 2010, confirm current permits, fees, forms, and eligibility before an event.

Common questions

Q: Is a high-dollar fundraising dinner automatically taxable?
A: No. The ruling used the true-object test. Its $1,000-per-plate payment was a charitable contribution, not a meal sale or admission charge, because the meal was incidental to the donation.

Q: What if the ticket mainly pays for a meal and entertainment?
A: The meal portion can be subject to sales tax and the entertainment or entry portion can be subject to admissions tax, unless the organization and transaction qualify for the relevant exemptions.

Q: Does a nonprofit exemption cover items the organization buys for its own use?
A: No. The § 12-36-2120(41) exemption described here applied to qualifying nonprofit sales and purchases for resale, not computers, furniture, supplies, or other property the nonprofit used itself.

Q: Is alcohol "free" when no separate drink price is charged?
A: Not necessarily. The ruling treated alcohol as sold when any consideration was required for the event, including an admission fee, donation, ticket, or meal charge.

Q: Who pays sales tax at a charity auction?
A: Depending on the arrangement, it may be the retail auctioneer, the auction house, or the nonprofit as retailer. The nonprofit's own sales may be exempt if it qualifies under § 12-36-2120(41).

Citations and references

• S.C. Code §§ 12-36-70, 12-36-90 and 12-36-910 (retailer, gross proceeds, and sales tax)
• S.C. Code § 12-36-2120(41) (sales by specified nonprofit organizations)
• S.C. Code §§ 12-21-2410 and 12-21-2420(4), (11) (admissions and nonprofit exemptions)
• S.C. Code § 12-33-245(A) (alcoholic liquor by the drink excise tax and nonprofit-permit exclusion)
• S.C. Code §§ 61-4-240, 61-4-550, 61-6-510 and 61-6-2000 (temporary alcohol permits discussed in the ruling)
• Meyers Arnold, Inc. v. South Carolina Tax Commission, 285 S.C. 303, 328 S.E.2d 920 (1985)

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR10-1.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214
Website Address: http://www.sctax.org

SC REVENUE RULING # 10-1

SUBJECT:

Fundraising Events by Nonprofit Organizations
(Sales Tax, Admissions Tax, ABC, Liquor by the Drink Tax)

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

SC Revenue Ruling #04-8 and all previous documents and any oral
directives in conflict herewith.

REFERENCES:

S. C. Code Ann. Section 12-36-90 (2000; Supp. 2008)
S. C. Code Ann. Section 12-36-910 (2000; Supp. 2008)
S. C. Code Ann. Section 12-36-2120(41) (Supp. 2008)
S. C. Code Ann. Section 12-36-70 (2000)
S. C. Code Ann. Section 40-6-370 (Supp. 2008)
S. C. Code Ann. Section 12-21-2410 (2000)
S. C. Code Ann. Section 12-21-2420 (2000; Supp. 2008
S. C. Code Ann. Section 61-6-500 (2009)
S. C. Code Ann. Section 61-6-510 (2009)
S. C. Code Ann. Section 61-6-2000 (2009)
S. C. Code Ann. Section 61-4-550 (2009)
S. C. Code Ann. Section 61-4-240 (2009)
S. C. Code Ann. Section 61-6-1600 (2009)
S. C. Code Ann. Section 61-6-1620(B) (2009)
S. C. Code Ann. Section 12-33-245(A) (Supp. 2008)
SC Regulation 7-403 (Supp. 2008)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2000)
S. C. Code Ann. Section 1-23-10(4) (Supp. 2008)
SC Revenue Procedure #09-3

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public
and to Department personnel. It is an advisory opinion issued to apply
principles of tax law to a set of facts or a general category of
taxpayers. It is the Department’s position until superseded or modified
by a change in statute, regulation, court decision, or another
Departmental advisory opinion.

INTRODUCTION:
Questions have arisen concerning the application of the sales tax, admissions tax and the
alcoholic beverage laws to fundraisers conducted by charities.

1

Such fundraisers may invite anyone who contributes $1,000 or more or may be promoted as a
$1,000 per plate fundraising dinner. Other fundraisers may sell food or other items at or near the
market rate and use the amount over and above costs for the organization’s charitable purpose.
The following will discuss the law and, based on this discussion, provide examples in a question
and answer format in order to explain the application of the sales tax, admissions tax, the
alcoholic beverage laws, and the alcoholic liquor by the drink excise tax to fundraisers and other
events conducted by nonprofit organizations.

LAW AND DISCUSSION:
I. SALES TAX:
Code Section 12-36-910 imposes “a sales tax, equal to [six] 1 percent of gross proceeds of sales,
… upon every person engaged . . . within this State in the business of selling tangible personal
property at retail.”
The measure of the sales tax, “gross proceeds of sales,” is defined at Code Section 12-36-90, in
part, as:
...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....
In Meyers Arnold, Inc. v. South Carolina Tax Commission, 285 S.C. 303, 328 S.E.2d 920, 923
(1985), the Court of Appeals of South Carolina held the element of service involved in a lay
away sale was subject to tax as being part of the sale of tangible personal property. The test used
by the court was as follows:
...But for the lay away sales, Meyers Arnold would not receive the lay away fees.
The fees are obviously charged for the service rendered in making lay away sales.
For these reasons, this court holds the lay away fees are part of the gross proceeds
and subject to the sales tax.
Accordingly, the total amount charged in conjunction with the sale or purchase of tangible
personal property is subject to the tax. 2
The so-called “true object” test is generally used to delineate sales of services from sales of
tangible personal property. This test is one of determining the basic purpose of the buyer. 3
Applying the principles of this test to the matter at hand, it must be determined whether the meal
or the donation is the true object of these fundraisers.
1

Code Section 12-36-1110 increased the general state sales and use tax rate from 5% to 6% effective June 1, 2007,
with certain exceptions not applicable to this advisory opinion.
2
See also Regency Towers Association, Inc. v. South Carolina Tax Commission, Horry County Court of Common
Pleas, Case No. 88-CP-26-1109 (1989) (maid service at a hotel); and Commission Decisions #90-38 and #91-64
(engraving charges as part of the sale of trophies).
3
9 Vanderbilt Law Review 231 (1956).
2

If the meal is the true object, then the donation is incidental to the sale of the meal and the entire
charge for the ticket would be subject to the sales tax. If the true object of the transaction is to
make a donation to charity, then the meal would be incidental to the donation and the amount
received would not be subject to the sales tax.
Exemption for Sales by Certain Nonprofit Organizations
Code Section 12-36-2120(41) exempts from the sales and use tax sales made by certain nonprofit
organizations. The statute exempts:
items sold by organizations exempt under Section 12-37-220 A(3) and (4) and B(5), (6),
(7), (8), (12), (16), (19), (22), and (24) if the net proceeds are used exclusively for exempt
purposes and no benefit inures to any individual. An organization whose sales are
exempted by this item is also exempt from the retail license tax provided in Article 5 of
this chapter;
To simplify the administration of the exemption (Code Section 12-36-2120(41)), organizations
should complete and file Form ST-387– Application for Sales Tax Exemption under Code
Section 12-36-2120(41), "Exempt Organizations."
The statute does not require an organization to obtain an exemption certificate in order to
purchase items exempt under this exemption. However, the Department recommends that
organizations apply for the exemption certificate. If an organization is issued a certificate, this
will simplify for the organization the purchase from suppliers of items tax-free for resale.
Otherwise, suppliers may be reluctant to sell items tax-free (for resale) to an organization that
does not have a retail license or does not have some other documentation showing that it
qualifies for the exemption. The exemption certificate assures the supplier that the SC
Department of Revenue has reviewed the matter and determined, based on information supplied
with the application, that the organization qualifies for the exemption and that the supplier may
sell items tax-free for resale to the organization. However, it should be noted that if it is
determined that an organization does not meet the requirements of the statute or is not otherwise
operating in an exempt manner, then the certificate will not be issued or will be revoked if
previously issued.
Nonprofit organizations coming within the exemption are:
(1)

public libraries and churches;

(2)

charitable trusts and foundations used exclusively for charitable and public purposes;

(3)

The American Legion, the Veterans of Foreign Wars, the Spanish American War
Veterans, the Disabled American Veterans, and Fleet Reserve Association or any
similar Veterans Organization chartered by the Congress of the United States;

(4)

The Young Women's Christian Association, Young Men's Christian Association and
the Salvation Army;

(5)

The Boy's and Girl's Scouts of America;
3

(6)

The Palmetto Junior Homemakers Association, the New Homemakers of South
Carolina, the South Carolina Association of Future Farmers of America and the New
Farmers of South Carolina;

(7)

Any religious, charitable, eleemosynary, educational, or literary society, corporation, or
other association;

(8)

Volunteer Fire Departments and Rescue Squads;

(9)

All community owned recreation facilities opened to the general public and operated on
a nonprofit basis; and,

(10) nonprofit or eleemosynary community theater companies, symphony orchestras, county
and community arts councils and commissions and other such companies, which is used
exclusively for the promotion of the arts.
Note: This exemption only applies to sales or purchases for resale by the above nonprofit
organizations. Purchases of property used by such nonprofit organizations (i.e., computers,
furniture, supplies, etc.) do not come within the exemption.
Auctions and Auctioneers
Finally, with respect to auctioneers, Code Section 12-36-70 defines the term “retailer” to include
every person “selling or auctioning tangible personal property whether owned by the person or
others.” In addition, Code Section 40-6-370 states that the provisions Chapter 6 of Title 40,
which governs auctioneers, apply to auctions conducted by a licensed auctioneer on behalf of a
charitable, civic, or religious organization. As such, a licensed auctioneer is liable for the sales
tax on the “gross proceeds of sales” of the items sold at an auction he is conducting on behalf of
a nonprofit organization, whether or not he is donating his time and expertise, if the licensed
auctioneer is engaged in the business of selling tangible personal property at retail 4 or is
conducting the auction on behalf of his employer (e.g., an auction house) who is engaged in the
business of selling tangible personal property at retail. However, if a nonprofit organization does
not use a licensed auctioneer, or uses a licensed auctioneer who is not engaged in the business of
selling tangible personal property at retail, then the nonprofit organization is liable for the sales
tax on such sales unless the nonprofit organization qualifies for the exemption from the tax under
Code Section 12-36-2120(41).
II. ADMISSIONS TAX:
Code Section 12-21-2410 reads:
For the purpose of this article and unless otherwise required by the context:
(1)

The word "admission" means the right or privilege to enter into or use a place or
location;

4

A licensed auctioneer who only works as an employee for an auction house is not engaged in the business of selling
at retail. The auction house is the retailer.
4

(2)

The word "place" means any definite enclosure or location; and

(3)

The word "person" means individual, partnership, corporation, association or
organization of any kind whatsoever.

Code Section 12-21-2420 reads, in part:
There must be levied, assessed, collected and paid upon paid admissions to places of
amusement within this State a license tax of five percent. ...
*

*

*

*

The tax imposed by this section shall be paid by the person or persons paying such
admission price . . .
In summary, the tax is upon "paid admissions" and the person paying the admission is the
taxpayer with respect to the tax, whether that person is an individual, a partnership, or
corporation. Furthermore, “paid admissions” constitute the amounts paid by patrons to enter into
or use a place of amusement.
Over the years, the Department of Revenue has reviewed several times the issue of what charges
are includable in “paid admissions.” Essentially, the determination is based on what the patron
must pay to enter into or use a place of amusement.
Therefore, we must determine whether or not a person is paying to enter into or use a place of
amusement when considering the application of the admissions tax to fundraising events.
Code Section 12-21-2420(4) exempts from the admissions tax:
... admissions charged by any eleemosynary and nonprofit corporation or organization
organized exclusively for religious, charitable, scientific, or educational purposes; or the
presentation of performing artists by an accredited college or university; provided, that
the license tax herein levied and assessed shall be collected and paid upon all paid
admissions to all athletic events of any institution of learning above the high school level;
provided, however, that carnivals, circuses, and community fairs operated by
eleemosynary or nonprofit corporations or organizations organized exclusively for
religious, charitable, scientific, or educational purposes shall not be exempt from the
assessment and collection of admissions tax on charges for admission for the use of or
entrance to rides, places of amusement, shows, exhibits, and other carnival facilities, but
not to include charges for general gate admissions except when the proceeds of any such
carnival, circus, or community fair are donated to a hospital; provided, further, that no
admissions tax shall be charged or collected by reason of any charge made to any
member of a nonprofit organization or corporation for the use of the facilities of the
organization or corporation of which he is a member.

5

Code Section 12-21-2420(11) exempts from the admissions tax:
… admissions to events other than those events enumerated in item (4) of this section,
sponsored and operated exclusively by eleemosynary, nonprofit corporations or
organizations organized exclusively for religious, charitable, scientific, civic, fraternal, or
educational purposes when the net proceeds derived from admissions to the events shall
be immediately donated to an organization operated exclusively for charitable purposes.
The term “net proceeds” shall mean the portion of the gross admissions proceeds
remaining after necessary expenses of the event have been paid. This item shall not
apply to an event in which the above organizations receive a percentage of gross proceeds
or a stated fixed sum for the use of its name in promoting the event.
Nonprofit organizations qualifying for this exemption may apply for an exemption certificate
using Form L-2068.
III. ALCOHOLIC BEVERAGE LAWS:
The following concerns two types of events involving nonprofit organizations: (a) fundraisers
and other events in which alcoholic liquors, beer or wine are sold, and (b) events in which
alcoholic liquors, beer or wine are provided without charge.
A. Sales of Alcoholic Liquors, Beer or Wine at Fundraisers and Other Events –
For purposes of the ABC laws, alcoholic liquor, beer, or wine is sold if there is a per drink
charge, if an admissions fee is charged to enter a place or event where these beverages are
provided, if a donation is accepted with respect to the event where these beverages are provided,
if tickets are sold with respect to the event where these beverages are provided, if such beverages
are provided as part of a meal for which consideration, direct or indirect, is accepted or required,
or if any consideration is accepted or required with respect to the event where these beverages
are provided. In addition, please note that the temporary permits discussed below that allow the
sale of alcoholic liquors, beer, and wine may be issued for use in any designated area of a
commercial establishment (including an area within a licensed location, such as a meeting room
in a licensed restaurant or a ballroom in a licensed hotel) or in a private residence.

1. Sale of Beer and Wine at Fairs and Special Functions: Under Code Sections 61-4-240 and 614-550, the Department may issue temporary permits for the sale of beer and wine at fairs and
   special functions. Code Section 61-4-550 states:
   The department may issue permits running for a period not exceeding fifteen days for a
   fee of ten dollars per day. Such special permits shall be issued only for locations at fairs
   and special functions.
2. Sale of Alcoholic Liquor by the Drink, Beer and Wine at Events for Members and their Guests
   Only: Code Section 61-6-2000 concerns the possession, sale, and consumption of alcoholic
   liquor by the drink. This section also applies to beer and wine pursuant to the provisions of Code

6

Section 61-4-240. 5 Code Section 61-6-2000 states:
(A) In addition to the licenses authorized pursuant to the provisions of subarticle 1
of this article, the department also may issue a temporary license for a period not
to exceed twenty-four hours to a nonprofit organization 6 which authorizes an
organization to purchase and sell at a single social occasion alcoholic liquors by
the drink. Notwithstanding another provision of this article, the issuance of this
permit authorizes the organization to purchase alcoholic liquors from licensed
retail dealers in the same manner that a person with a biennial license is issued
pursuant to the provisions of subarticle 1 of this article are authorized to make
these purchases. The fee for the permit is thirty-five dollars payable at the time of
application. The permit application must include a statement by the applicant as
to the amount of alcoholic liquors to be purchased and the nature and date of the
social occasion at which they are to be sold. The issuance or nonissuance of
permits authorized pursuant to the provisions of this section is within the
discretion of the department.
(B) The department may require the applicant to obtain a criminal background
check conducted by the State Law Enforcement Division within thirty days prior
to an initial application. Background checks for subsequent applications are not
required unless the officers of the nonprofit organization change.
However, it is important to note that the provisions of Code Section 61-6-2000 are in Article 5 of
Chapter 6 of Title 61. This article also contains Code Section 61-6-1600(A), which states:
(A) A nonprofit organization which is licensed by the department pursuant to the
provisions of this article may sell alcoholic liquors by the drink. A member or
guest of a member of a nonprofit organization may consume alcoholic liquors
sold by the drink upon the premises between the hours of ten o’clock in the
morning and two o’clock the following morning. [Emphasis added.]
Therefore, the provisions of the temporary license authorized under Code Section 61-6-2000
allow nonprofit organizations to sell, at a single social occasion, alcoholic liquor by the drink to
their members and the authorized guests of their members as provided for in Code Section 61-61600(A). The provisions of this temporary license do not allow nonprofit organizations to sell
alcoholic liquor by the drink to the general public.

3. Sale of Alcoholic Liquor, Beer and Wine at Events Open to the General Public: Code Section
   61-6-510 concerns the possession, sale, and consumption of liquor. This section also applies to
   beer and wine pursuant to the provisions of Code Section 61-4-240. 7 Code Section 61-6-510
   states:
   5

Code Section 61-4-240 provides that temporary permits for the sale of beer and wine may also be issued for events
issued a temporary permit for the sale of alcoholic liquor under Code Section 61-6-2000.
6
Code Section 61-6-20(6) defines a nonprofit organization to mean “an organization not open to the general public,
but with a limited membership and established for social, benevolent, patriotic, recreational, or fraternal purposes.”
7
Code Section 61-4-240 provides that temporary permits for the sale of beer and wine may also be issued for events
issued a temporary permit for the sale of alcoholic liquor under Code Section 61-6-510.
7

(A) The department may issue a temporary permit to allow the possession, sale,
and consumption of alcoholic liquors. This permit is valid for a period not to
exceed twenty-four hours, and may be issued only to bona fide nonprofit
organizations that have been in existence and operating for at least twelve months
before the date of application, to nonprofit educational foundations, and to
political parties and their affiliates duly certified by the Secretary of State. The
department must charge a nonrefundable filing fee of thirty-five dollars for
processing each application. The department in its discretion must specify the
terms and conditions of the permit. For purposes of this section, “nonprofit
organization” means an organization not open to the general public, but with a
limited membership and established for social, benevolent, patriotic, recreational,
or fraternal purposes.
(B) The department may require the applicant to obtain a criminal background
check conducted by the State Law Enforcement Division within thirty days prior
to an initial application. Background checks for subsequent applications are not
required unless the officers of the nonprofit organization change.
Unlike the temporary license authorized in Code Section 61-6-2000, this temporary license is
authorized by Code Section 61-6-510, which is in Article 3 and not Article 5 of Chapter 6 of
Title 61. Therefore, it is not governed by the provisions of Code Section 61-6-1600. For this
reason, a nonprofit organization that is granted a temporary license authorized by Code Section
61-6-510 8 may sell alcoholic liquor to the general public at a fundraising event.
B. Alcoholic Liquors, Beer or Wine Provided Without Charge 9

1. Beer or Wine Provided at an Event Without Charge: When a function is held in an unlicensed
   premises, a permit is not necessary if a nonprofit organization provides beer or wine at the
   function free of charge or free of any consideration whatsoever.
2. Alcoholic Liquors, Beer and Wine Provided at a Private Function Without Charge: Code
   Section 61-6-1620(B) concerns the possession and consumption of liquor and states:
   Alcoholic liquors may be possessed or consumed in separate and private areas of an
   establishment whether or not the establishment includes premises which are licensed
   pursuant to Sections 61-6-1600 or 61-6-1610, where specific individuals have leased
   these areas for a function not open to the general public.

8

As stated in Code Section 61-6-510, these nonprofit organization must (a) ones in existence and operating for at
least twelve months, (b) nonprofit educational foundations, or (c) political parties and their affiliates duly certified
by the Secretary of State.
9
For purposes of the ABC laws, alcoholic liquor, beer, or wine is sold if there is a per drink charge, if an admissions
fee is charged to enter a place or event where these beverages are provided, if a donation is accepted with respect to
the event where these beverages are provided, if tickets are sold with respect to the event where these beverages are
provided, if such beverages are provided as part of a meal for which consideration, direct or indirect, is accepted or
required, or if any consideration is accepted or required with respect to the event where these beverages are
provided.
8

With respect to Code Section 61-6-1620(B), Regulation 7-403, which concerns the possession
and consumption of alcoholic liquors in a separate and private area of an establishment, states:
A. Lease must be written. When a separate and private area of an establishment is leased
by a holder of a sale and consumption license to a specific individual or individuals for a
function not open to the general public pursuant to Section 61-6-1620(B), the terms of the
lease agreement shall be reduced to writing and a copy of that instrument shall be
retained by the licensee upon the licensed premises.
B. Purchase, Delivery and Possession of Alcoholic Beverages. When a separate and
private area of an establishment is leased by a specific individual or individuals for a
function not open to the general public pursuant to Section 61-6-1620(B), the host or
sponsor of said function, or the designated agent or representative of said host or sponsor
must purchase and deliver to the leased area any alcoholic beverages to be possessed and
consumed therein and must remain constantly in actual possession of these beverages
until such time as the function is concluded, at which time all alcoholic beverages must
be removed from the leased area and taken to a location where they may be legally
stored. Nothing contained herein shall prohibit the host or sponsor or his designated agent
or representative from having other persons, whether employed by the licensee or
employed by the host or his agent or representative, from mixing and serving alcoholic
beverages belonging to the host of the party.
C. Termination of Lease. In the event that the area leased pursuant to Section 61-61620(B), is located upon the premises of an establishment holding either a sale and
consumption license or a retail beer and wine permit, the lease agreement shall
automatically terminate at two o'clock in the morning. To permit or knowingly allow the
possession and consumption of any alcoholic beverages upon the premises of the
establishment after two o'clock in the morning shall constitute a violation against the
license or permit. Such violation shall constitute sufficient cause for the South Carolina
Department of Revenue to revoke or suspend said license or permit.
At any event where alcoholic liquor is possessed and consumed under the provisions of the
above regulation, beer and wine may also be possessed and consumed.

3. Possession and Consumption of Alcoholic Liquor at a Publicly Owned Auditorium, Coliseum,
   or Armory: Code Sections 61-6-500 concerns the possession and consumption of liquor from big
   bottles. Code Section 61-6-500 states:
   (A) Notwithstanding any other provision of law, the authorities in charge of a
   publicly-owned auditorium, coliseum, or armory may allow the possession and
   consumption of beer, wine, and alcoholic liquors on their premises.
   (B) It is unlawful for a person to possess or consume beer, wine, or alcoholic
   liquors on the premises of a publicly-owned auditorium, coliseum, or armory
   unless the authorities in charge specifically have approved the possession or
   consumption of those beverages. A person who violates the provisions of this
   section is guilty of a misdemeanor and, upon conviction, must be fined not more
   than one hundred dollars or imprisoned not more than thirty days.
   9

IV. ALCOHOLIC LIQUOR BY THE DRINK TAX:
Code Section 12-33-245(A) imposes an alcoholic liquor by the drink tax, and states:
In addition to taxes imposed pursuant to the provisions of Sections 12-33-230, 1233-240, Article 5 of this chapter, and Chapter 36, Title 12, there is imposed an
excise tax equal to five percent of the gross proceeds of the sales of alcoholic
liquor by the drink for on-premises consumption in an establishment licensed for
sales pursuant to Article 5, Chapter 6, Title 61 or at a location holding a
temporary license or permit that authorizes the sale of liquor by the drink. All
proceeds of this excise tax must be deposited to the credit of the general fund of
the State. Except with respect to the distribution of the revenue of this tax, this
excise tax is considered to be imposed pursuant to Chapter 36, Title 12. For
purposes of this subsection, "gross proceeds of sales" has the meaning as provided
in Section 12-36-90, except that the sales tax imposed under Chapter 36, Title 12
is not included in "gross proceeds of sales". The term "gross proceeds of sales"
also includes, but is not limited to, the retail value of a complimentary or
discounted beverage containing alcoholic liquor, an amount charged for ice for a
drink containing alcoholic liquor, and an amount charged for a nonalcoholic
beverage that is sold or used as a mixer for a drink containing alcoholic liquor.
This section does not apply to nonprofit organizations that are issued a temporary
permit to allow possession, sale, and consumption of alcoholic liquors pursuant to
Section 61-6-510 or subarticle 5, Article 5, Chapter 6, Title 61.
Based on the above, there is imposed a 5% excise tax on the sales of alcoholic liquor by the
drink. However, this excise tax does not apply to the sales of alcoholic liquor by the drink sold
by a nonprofit organization at an event for which a temporary permit has been issued under
either Code Section 61-6-510 or Code Section 61-6-2000.
CONCLUSIONS:
The following will explain, through examples, the application of the sales tax, admissions tax,
and alcoholic beverage laws to fundraising and other events conducted by a nonprofit
organization:
Example 1:
Facts:
A nonprofit organization holds a $1,000 a plate function to raise money for a specific purpose.
This function will be open to the public. At this function, persons paying the $1,000 will be
served a meal and will listen to a speech by a famous person. A professional caterer will provide
the meal and will be paid $20 a plate by the nonprofit organization. Alcoholic liquors (poured
from big bottles), beer, and wine will be provided by the nonprofit organization and will be
available at no additional charge for any person of legal drinking age.

10

Answer:
Sales Tax: The caterer, as a retailer, must have a retail license and is liable for the sales tax on
the “gross proceeds of sales” of all the meals charged at $20 a plate to the nonprofit organization.
The $1,000 paid to the nonprofit organization by the persons attending the fundraiser is a
charitable contribution for sales tax purposes and is not consideration received from the sale of
tangible personal property.
Admissions Tax: The $1,000 paid to the nonprofit organization by the persons attending the
fundraiser is a charitable contribution and is not a charge to enter into and use a place of
amusement. As such, it is not subject to the admissions tax
Alcoholic Beverage Laws: The nonprofit organization must obtain the temporary permits
authorized under Code Sections 61-6-510 (alcoholic liquors) and 61-4-240 (beer and wine) in
order to allow the possession, sale, and consumption of alcoholic liquor, beer, and wine at the
fundraiser. This temporary permit only applies to those nonprofit organizations falling within
the definition of “nonprofit organization” as set forth in Code Section 61-6-510 (as well as
nonprofit educational foundations and political parties and their affiliates).
Note: Since this event will be open to the general public, the nonprofit organization does not
qualify for the temporary permit authorized under Code Sections 61-6-2000 for this fundraiser.
Alcoholic Liquor by the Drink Tax: The alcoholic liquor by the drink tax is not applicable since
the nonprofit organization is selling the alcoholic liquor by the drink at an event for which a
temporary permit has been issued under Code Section 61-6-510.
Example 2:
Facts:
A nonprofit organization is conducting a social. For $50.00 a person, members and their guests
will receive a meal and will be entertained by, and be able to dance to the music of, a local band.
Alcoholic liquors, beer, and wine will be provided by the nonprofit organization and will be
available at an additional charge for any member or guest of legal drinking age.
Answer:
Sales Tax and Admissions Tax: The nonprofit organization, as the retailer, must have a retail
license and is liable for the sales tax on the “gross proceeds of sales” of the portion of the charge
representing the meal and the drinks (alcoholic liquors, beer, wine, etc.) and is liable for the
admissions tax on the portion of the charge representing the admissions charge. See SC Private
Letter Ruling #92-5 for information and an example of a charge subject to both the sales tax and
the admissions tax.
However, if the nonprofit organization qualifies for the exemption under Code Section 12-362120(41), the sale of the meals and drinks by the nonprofit organization to its members and
visitors will not be subject to the sales tax provided the nonprofit organization has applied for
and received an exemption certificate from the department. Nonprofit organizations that have
11

obtained the exemption certificate are not required to obtain a retail sales tax license. See SC
Revenue Procedure #03-6 for more information concerning the sales tax exemption under Code
Section 12-36-2120(41).
Also, if the organization and the transaction qualify for the exemption under Code Section 1221-2420, the admissions charged by the nonprofit organization will not be subject to the
admissions tax.10 A nonprofit organization may seek a determination as to whether it qualifies
for the admission tax exemption under Code Section 12-21-2420 by completing the Application
for Admissions Tax Exemption - Form L-2068.
Alcoholic Beverage Laws: Since the event is a social for members and their guests, the
nonprofit organization must obtain the temporary permits authorized under Code Sections 61-62000 (alcoholic liquors) and 61-4-240 (beer and wine) in order to allow the possession, sale, and
consumption of alcoholic liquors, beer, and wine at the event. This temporary permit only
applies to those nonprofit organizations falling within the definition of “nonprofit organization”
as set forth in Code Section 61-6-20(6).
If the nonprofit organization does not qualify for the temporary permit under Code Section 61-62000, then the nonprofit organization may obtain the temporary permits authorized under Code
Sections 61-6-510 (alcoholic liquors) and 61-4-240 (beer and wine) in order to allow the
possession, sale, and consumption of alcoholic liquors and beer and wine at the event, provided
the organization must meet the requirements of Code Section 61-6-510 in order to obtain the
temporary permit under Code Section 61-6-510 for the sale of alcoholic liquors.
Alcoholic Liquor by the Drink Tax: The alcoholic liquor by the drink tax is not applicable since
the nonprofit organization is selling the alcoholic liquor by the drink at an event for which a
temporary permit has been issued under either Code Section 61-6-510 or Code Section 61-62000.
Example 3:
Facts:
A nonprofit organization is conducting a social. For $100.00 a person attending the event will
receive a meal and will be entertained by, and be able to dance to the music of, a local band.
While the $100 is not for the purposes of raising money, but is being charged for the purposes of
covering the costs of the social, the event is a community social that will be open to the general
public as well as members of the nonprofit organization and their guests. Alcoholic liquors will
be sold for an additional charge per drink. Beer and wine will also be sold for an additional
charge per drink.

10

In addition to exempting nonprofit organizations organized exclusively for religious, charitable, scientific and
educational purposes, Code Section 12-21-2420(4) also exempts charges made by a nonprofit organization, such as a
nonprofit private country club, to its members for the use of its facilities. It should be noted that this exemption does
not apply to charges to non-members (e.g., visitors).

12

Answer:
Sales Tax and Admissions Tax: The nonprofit organization, as the retailer, must have a retail
license and is liable for the sales tax on the “gross proceeds of sales” of the portion of the $100
charge representing the meal and is liable for the admissions tax on the portion of the $100
charge representing the admissions charge. The separate charges for the drinks (alcoholic liquors,
beer, and wine) are also subject to the sales tax. See SC Private Letter Ruling #92-5 for
information and an example of a charge subject to both the sales tax and the admissions tax.
However, if the nonprofit organization qualifies for the exemption under Code Section 12-362120(41), the sale of the meals by the nonprofit organization to its members and visitors will not
be subject to the sales tax provided the nonprofit organization has applied for and received an
exemption certificate from the department. Nonprofit organizations that have obtained the
exemption certificate are not required to obtain a retail sales tax license. See SC Revenue
Procedure #03-6 for more information concerning the sales tax exemption under Code Section
12-36-2120(41).
Also, if the organization and the transaction qualify for the exemption under Code Section 1221-2420, the admissions charged by the nonprofit organization will not be subject to the
admissions tax 11. A nonprofit organization may seek a determination as to whether it qualifies
for the admission tax exemption under Code Section 12-21-2420 by completing the Application
for Admissions Tax Exemption - Form L-2068.
Alcoholic Beverage Laws: The nonprofit organization must obtain the temporary permits
authorized under Code Sections 61-6-510 (alcoholic liquors) and 61-4-240 (beer and wine) in
order to allow the possession, sale, and consumption of alcoholic liquor, beer and wine at the
event.
Note: Since this event will be open to the general public, the nonprofit organization does not
qualify for the temporary permits authorized under Code Sections 61-6-2000 for this event.
Alcoholic Liquor by the Drink Tax: The alcoholic liquor by the drink tax is not applicable since
the nonprofit organization is selling the alcoholic liquor by the drink at an event for which a
temporary permit has been issued under Code Section 61-6-510.
Example 4:
Facts:
A church seeks to raise money for its youth programs. Each week the church holds a fellowship
dinner. Members and visitors pay $5.50 per meal. Alcoholic liquors, beer, and wine will not be
provided or available at this event. The cost per meal to the church is $4.50. Therefore, $1.00 of
every meal is deposited into a special church fund to pay for the youth programs.

11

See footnote #10.
13

Answer:
Sales Tax: The church, as the retailer, is liable for the sales tax on the “gross proceeds of sales”
of all the meals charged at $5.50 a meal to the members and visitors. The church may purchase
prepared meals, or foodstuffs used to prepare the meals, tax free since such items will be resold
to the members and visitors or constitute ingredients or component parts of the meal being sold
by the church.
However, if the church qualifies for the exemption under Code Section 12-36-2120(41), the sale
of the meals by the church to its members and visitors will not be subject to the sales tax
provided the church has applied for and received an exemption certificate from the department.
Churches that have obtained the exemption certificate are not required to obtain a retail sales tax
license. See SC Revenue Procedure #03-6 for more information concerning the sales tax
exemption under Code Section 12-36-2120(41).
Admissions Tax: The admission tax is not applicable to this example.
Alcoholic Beverage Laws: The alcoholic beverage laws are not applicable to this example.
Alcoholic Liquor by the Drink Tax: The alcoholic liquor by the drink tax is not applicable in this
example.
Example 5:
Facts:
A church seeks to raise money for its youth programs. Each week the church holds a show (e.g.,
a puppet show, play) for pre-schoolers and others. Members and visitors pay $1.00 to see the
show. The money received is deposited into a special church fund to pay for the youth
programs.
Answer:
Sales Tax: The sales tax is not applicable to this example.
Admissions Tax: The $1.00 paid to the church by the persons attending the show is a charge to
enter into and use a place of amusement. However, since the church qualifies for the exemption
under Code Section 12-21-2420(4), the admissions price charged by the church will not be
subject to the admissions tax.
Alcoholic Beverage Laws: The alcoholic beverage laws are not applicable to this example.
Example 6:
Facts:
A nonprofit organization is conducting a private event for invited guests only. No donation,
entrance fee, or consideration of any kind will be required of the guests. The guests will receive
14

a meal and alcoholic liquors, beer, and wine will be provided. No donation or consideration of
any kind will be accepted or required.
Answer:
Sales Tax: The nonprofit organization is not selling a meal or drinks and therefore is the user
and consumer of the drinks and foodstuffs purchased to prepare the meal or the prepared meal if
such a meal is purchased from a caterer. Therefore, the retailer selling the drinks, foodstuffs or
prepared meal to the nonprofit organization must have a retail license and is liable for the sales
tax on the “gross proceeds of sales” from the sale of the drinks, foodstuffs, or prepared meals.
Please note that since the nonprofit organization is not selling the drinks or meal, the exemption
under Code Section 12-36-2120(41) does not apply.
Admissions Tax: The admission tax is not applicable to this example.
Alcoholic Beverage Laws: The nonprofit organization may do one of the following:
(a) Alcoholic liquors, beer, and wine may be possessed or consumed in separate and private
areas of an establishment whether or not the establishment includes premises which are licensed
pursuant to Sections 61-6-1600 or 61-6-1610, where specific individuals have leased these areas
for a function not open to the general public. Regulation 7-403 establishes the rules for
conducting a private function at which alcoholic liquors will be served and at which no donations
are accepted or consideration required. The nonprofit organization in this example may conduct
this function without obtaining a permit for alcoholic liquors, beer, or wine provided the location
and the host of the private function comply with the provisions of Regulation 7-403.
(b) Alcoholic liquors, beer, and wine may be possessed or consumed in a private residence.
(c) If the event will be held at a publicly owned auditorium, coliseum, or armory, the public
authority in charge of the facility must specifically have approved the possession or consumption
of those beverages on its premises. See Code Section 61-6-500 (alcoholic liquors). Since beer
and wine will not be sold, a temporary permit is not necessary in order to possess and consume
beer and wine at this function. In this case, the nonprofit organization is not required to obtain
any temporary permits for the possession and consumption of alcoholic liquors, beer, and wine.
Alcoholic Liquor by the Drink Tax: The alcoholic liquor by the drink tax is not applicable in this
example.
Example 7:
Facts:
A nonprofit organization will sell beer at a local festival in order to raise money.
Answer:
Sales Tax: The nonprofit organization, as the retailer, must have a retail license and is liable for
the sales tax on the “gross proceeds of sales” of the beer.
15

However, if the nonprofit organization qualifies for the exemption under Code Section 12-362120(41), the sale of the beer by the nonprofit organization will not be subject to the sales tax
provided the nonprofit organization has applied for and received an exemption certificate from
the department. Nonprofit organizations that have obtained the exemption certificate are not
required to obtain a retail sales tax license. See SC Revenue Procedure #03-6 for more
information concerning the sales tax exemption under Code Section 12-36-2120(41).
Admissions Tax: The admission tax is not applicable to this example.
Alcoholic Beverage Laws: The nonprofit organization must obtain the temporary permit
authorized under Code Sections 61-4-550 (beer and wine) in order to allow the sale of the beer at
the festival.
Alcoholic Liquor by the Drink Tax: The alcoholic liquor by the drink tax is not applicable in this
example.
Example 8:
Facts:
A nonprofit organization will sell donated items at an auction to raise money. The nonprofit
organization has secured the services of a licensed auctioneer who is engaged in the business of
selling tangible personal property at retail. The licensed auctioneer may or may not be paid to
conduct the auction.
Answer:
Sales Tax: Under the provisions of Code Section 12-36-70(1)(a), the licensed auctioneer is the
retailer and must have a retail license. As such, the auctioneer is liable for the sales tax on the
“gross proceeds of sales” of the items sold at the auction, even if the money collected at the
auction is paid directly to the nonprofit organization.
Admissions Tax: The admission tax is not applicable to this example.
Alcoholic Beverage Laws: The alcoholic beverage laws are not applicable to this example. If
alcoholic beverages are served at the auction, see the other examples for information on the type
of permit, if any, that may be required under the ABC laws.
Alcoholic Liquor by the Drink Tax: The alcoholic liquor by the drink tax is not applicable in this
example. If alcoholic beverages are served at the auction, see the other examples for information
on the type of permit, if any, that may be required under the ABC laws.
Example 9:
Facts:
A nonprofit organization will sell donated items at an auction to raise money. The nonprofit
organization has secured the services of a licensed auctioneer who is not engaged in the business
16

of selling tangible personal property at retail but who is employed by an auction house. The
licensed auctioneer may or may not be paid to conduct the auction.
Answer:
Sales Tax:
(a) Under the provisions of Code Section 12-36-70(1)(a), the auction house is the retailer and
must have a retail license if the licensed auctioneer is conducting the auction for the nonprofit
organization on behalf of the auction house (a retailer). As such, the auction house is liable for
the sales tax on the “gross proceeds of sales” of the items sold at the auction, even if the money
collected at the auction is paid directly to the nonprofit organization.
(b) If the licensed auctioneer is not conducting the auction on behalf of the auction house, then
the nonprofit organization, as the retailer, must have a retail license and is liable for the sales tax
on the “gross proceeds of sales” of the donated items. Since the licensed auctioneer is not
engaged in the business of selling tangible personal property at retail outside of his work for his
employer (the auction house), he is not the retailer. The nonprofit organization is the retailer.
However, if the nonprofit organization qualifies for the exemption under Code Section 12-362120(41), the sale of the donated items by the nonprofit organization will not be subject to the
sales tax provided the nonprofit organization has applied for and received an exemption
certificate from the department. Nonprofit organizations that have obtained the exemption
certificate are not required to obtain a retail sales tax license. See SC Revenue Procedure #03-6
for more information concerning the sales tax exemption under Code Section 12-36-2120(41).
Note: If the licensed auctioneer is engaged in the business of selling tangible personal property at
retail outside of his work for his employer (the auction house), then he is a retailer who must
have a retail license. As such, if he is conducting an auction for a nonprofit organization, then he
is liable for the sales tax on the “gross proceeds of sales” of the items sold at the auction
(whether or not he is paid to conduct the auction), even if the money collected at the auction is
paid directly to the nonprofit organization.
Admissions Tax: The admission tax is not applicable to this example
Alcoholic Beverage Laws: The alcoholic beverage laws are not applicable to this example. If
alcoholic beverages are served at the auction, see the other examples for information on the type
of permit, if any, that may be required under the ABC laws.
Alcoholic Liquor by the Drink Tax: The alcoholic liquor by the drink tax is not applicable in this
example. If alcoholic beverages are served at the auction, see the other examples for information
on the type of permit, if any, that may be required under the ABC laws.

17

Example 10:
Facts:
A nonprofit organization will sell donated items at an auction to raise money. The nonprofit
organization will not secure the services of a licensed auctioneer. A local television personality,
who is not a licensed auctioneer, has agreed to conduct the auction.
Answer:
Sales Tax: The nonprofit organization, as the retailer, must have a retail license and is liable for
the sales tax on the “gross proceeds of sales” of the donated items. Since a television personality
conducting the auction is not a licensed auctioneer, the nonprofit organization is the retailer.
However, if the nonprofit organization qualifies for the exemption under Code Section 12-362120(41), the sale of the donated items by the nonprofit organization will not be subject to the
sales tax provided the nonprofit organization has applied for and received an exemption
certificate from the department. Nonprofit organizations that have obtained the exemption
certificate are not required to obtain a retail sales tax license. See SC Revenue Procedure #03-6
for more information concerning the sales tax exemption under Code Section 12-36-2120(41).
Admissions Tax: The admission tax is not applicable to this example.
Alcoholic Beverage Laws: The alcoholic beverage laws are not applicable to this example. If
alcoholic beverages are served at the auction, see the other examples for information on the type
of permit, if any, that may be required under the ABC laws.
Alcoholic Liquor by the Drink Tax: The alcoholic liquor by the drink tax is not applicable in this
example. . If alcoholic beverages are served at the auction, see the other examples for
information on the type of permit, if any, that may be required under the ABC laws.
Please note the following:
Longstanding Policy: Many of the conclusions reached in this advisory opinion also
represent the longstanding policy of the department with respect to the application of the
sales tax, admissions tax, and the alcoholic beverage laws to such fundraisers.
Administrative interpretations of statutes by the agency charged with their administration
and not expressly changed by the legislative body are entitled to great weight. Marchant v.
Hamilton, 279 S.C. 497, 309 S.E. 2d 781(1983). When as in this case, the construction or
administrative interpretation of a statute has been applied for a number of years and has
not been changed by the legislature, there is created a strong presumption that such
interpretation or construction is correct. Ryder Truck Lines, Inc. v. South Carolina Tax
Commission, 248 S.C. 148, 149 S.E. 2d 435 (1966); Etiwan Fertilizer Company v. South
Carolina Tax Commission, 217 S.C. 354, 60 S.E. 2d 682 (1950).

18

Other Facts and Circumstances: The application of the sales tax, admissions tax, and
alcoholic beverage laws is determined by the facts and circumstances of a particular
fundraiser. The intent of the parties, the market rate for the meal, entertainment, or other
item being offered at the fundraiser, and other factors must be considered. In addition, all
factors must be considered in determining whether or not an alcoholic beverage permit is
required and the type of alcoholic beverage permit that may be required.
Applications: This advisory opinion references the following Departments of Revenue
application forms. These application forms can be found on the Department’s website at
www.sctax.org by clicking on “Form and Instructions” in the “Quick Links” box.
Form SCTC-111 - Business Tax Application. This application is used to apply for
retail sales tax license. (After clicking on “Forms and Instructions, this form can be
found under the current year’s forms by clicking on “Other Forms.”)
Form L-514 - Application for a license to operate a place of amusement. (After
clicking on “Forms and Instructions, this form can be found under the current year’s
forms by clicking on “Miscellaneous Taxes/Licenses.”)
Form ST-387 - Exemption application for nonprofit organizations that may be
exempt from the sales tax with respect to their sales of tangible personal property.
(After clicking on “Forms and Instructions, this form can be found under the current
year’s forms by clicking on “Sales.”)
Form L-2068 - Exemption application for nonprofit organizations that may be
exempt from the admissions tax with respect to functions they sponsor. (After
clicking on “Forms and Instructions, this form can be found under the current year’s
forms by clicking on “Miscellaneous Taxes/Licenses.”)
Form ABL 900 - Application for a temporary beer, wine, or alcoholic liquor license.
(After clicking on “Forms and Instructions, this form can be found under the current
year’s forms by clicking on “Alcoholic Beverage Licensing.”)
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Ray N. Stevens
Ray N. Stevens
January 12
, 2010
Columbia, South Carolina

19