How are portable toilets, hand-washing stations, and waste-holding-tank services taxed in South Carolina?

Plain-English summary

South Carolina Revenue Ruling #19-10 separates portable sanitation transactions into three tax categories.

A portable toilet rental receives a statutory exemption for 70% of gross proceeds, leaving 30% subject to state and local sales and use tax. The total includes the base rental, cleaning, pumping, delivery, and other connected charges. A mobile restroom trailer containing toilets and sinks also qualifies when its primary purpose is to provide portable toilets.

A standalone hand-washing station does not qualify. The exemption applies strictly to portable toilets, so the full rental amount, cleaning fee, delivery charge, and other gross proceeds are taxable.

A portable waste-holding tank supplied as part of waste removal and disposal is different. Under the ruling's facts, the true object is the nontaxable service, not the rental of the tank. Monthly service, separately labeled tank rent, and delivery are all nontaxable to the customer regardless of billing format. The service provider is the tank's consumer and pays sales or use tax when purchasing it.

What this means for you

Portable-toilet rental companies

Apply the 70% exemption to the entire connected charge, not just the stated equipment rent. The ruling's $100 example taxes $30; its $600 toilet-trailer package, including optional air conditioning, lighting, seat covers, and toilet paper, taxes $180.

Hand-washing-station providers

Do not use the portable-toilet exemption for a standalone sink or washing unit. The ruling taxes the entire charge.

Waste-removal companies

When the customer hires the business to collect and dispose of waste and the holding tank merely enables that service, treat the customer charge as nontaxable service revenue under the stated facts. Pay tax on the tank purchase beginning with the ruling's January 1, 2020 effective date for this conclusion.

Event and construction customers

Review what the contract actually provides. A mobile trailer whose primary purpose is toilets receives the partial exemption; a tank placed under the customer's own office trailer as part of ongoing waste disposal follows the service analysis.

Common questions

Q: Is servicing a rented portable toilet separately taxable?
A: It is included in total gross proceeds, but 70% of the combined charge is exempt and 30% is taxable.

Q: Does a sink inside a toilet trailer destroy the exemption?
A: No. The ruling applies the partial exemption when the trailer's primary purpose is portable toilets.

Q: Does separately listing tank rent make a waste-removal service taxable?
A: No. Billing labels do not change the true object under the ruling's facts.

Citations and references

• S.C. Code Ann. § 12-36-2120(62) — 70% exemption for portable-toilet rentals
• S.C. Code Ann. §§ 12-36-90, 12-36-100, and 12-36-910 — gross proceeds, rentals, and sales tax
• Boggero v. South Carolina Department of Revenue, 414 S.C. 277, 777 S.E.2d 842 (2015)

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: RR19-10.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 12265, Columbia, South Carolina 29211

SC REVENUE RULING #19-10

SUBJECT:

Rental of Mobile Toilet Trailer, Hand Washing Station, or Portable Waste
Holding Tank – Tax Exemption
(Sales and Use Tax)

EFFECTIVE DATE: With respect to conclusions #1 and #2, applies to all periods open under
statute. With respect to conclusion #3, applies to waste removal and
disposal services provided on or after January 1, 2020. 1
SUPERSEDES:

SC Revenue Ruling #09-5 and all previous advisory opinions and any oral
directives in conflict herewith.

REFERENCES:

S.C. Code Ann. Section 12-36-90 (2014)
S.C. Code Ann. Section 12-36-100 (2014)
S.C. Code Ann. Section 12-36-910 (2014)
S.C. Code Ann. Section 12-36-2120(62) (2014)

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:

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

QUESTIONS
1.

Is the rental charge (e.g., rental amount, cleaning and pumping charges, delivery charge,
etc.) for a mobile trailer containing a portable toilet and a portable sink, as described in the
facts, entitled to the partial sales and use tax exemption under Code Section 12-362120(62)?

1

Companies providing waste removal and disposal services must pay sales and use tax upon their purchase of
portable waste holding tanks on or after January 1, 2020 since such companies are considered the user or consumer
of such tank.

1

2.

Is the rental charge (e.g., rental amount, cleaning fee, delivery charge, etc.) for a portable
standalone hand washing station entitled to the partial sales and use tax exemption under
Code Section 12-36-2120(62)?

3.

Is the rental charge (e.g., tank rental amount, waste removal and disposal charges, delivery
charge, etc.) for a portable waste holding tank, as described in the facts, entitled to the
partial sales and use tax exemption under Code Section 12-36-2120(62)?

CONCLUSIONS

1. The rental charge for a mobile trailer containing a portable toilet and portable sink, as
   described in the facts, is entitled to the partial sales and use tax exemption under Code
   Section 12-36-2120(62). Therefore, the rental of the mobile trailer containing a portable toilet
   and portable sink is subject to the sales and use tax (state and local) based upon the total
   gross proceeds of sales (e.g., rental amount, cleaning and pumping charges, delivery charges,
   etc.) less the partial sales and use tax exemption (70% of the total gross proceeds of sales)
   under Code Section 12-36-2120(62).
2. The rental charge for a portable standalone hand washing station is not the rental of a
   “portable toilet” and is not entitled to the partial sales and use tax exemption under Code
   Section 12-36-2120(62). Therefore, the rental of the portable standalone hand washing
   station is subject to the sales and use tax (state and local) based upon the total gross proceeds
   of sales (e.g., rental amount, cleaning fee, delivery charge, etc.).
3. Since the “true object” of a transaction involving a portable waste holding tank, as described in
   the facts, is a service of waste removal and disposal and not the rental of tangible personal
   property, the charges for the service (e.g., charge for the monthly waste removal and disposal
   service, monthly tank rental fee, delivery charge, etc.) are not subject to the sales and use tax,
   regardless of how billed to the customer.
   FACTS
   Portable restrooms are often used at outdoor worksites, sporting events, weddings, and parks.
   They are usually self-contained and moveable and do not require any pre-existing services, such
   as running water or sewage disposal. They are often rented for a weekend, a week, or by the
   month and usually include servicing and cleaning. The sanitation unit provided may be a
   portable toilet, a standalone portable hand washing station, or a combination toilet and sink unit.
   A portable toilet or mobile toilet is a toilet that may be easily moved around to quickly provide
   sanitation facilities. The toilet waste is collected in a holding tank that is incorporated into the
   unit. The tank is emptied frequently into a waste disposal tanker truck and then the contents are
   usually pumped into a sanitary sewer or delivered directly to a treatment plant.

2

The basic portable restroom contains only a portable toilet (often called a “porta potty”) designed
for one person. The unit is typically free standing and stabilized by the weight of its waste tank.
Newer portable restroom models include an internal hand washing station. Another new
advancement is a portable restroom fixed to a trailer (often called a toilet trailer) that may have
toilets, sinks, and heating and air conditioning.
In some instances, a standalone portable hand washing unit is rented separately. In other
instances, a portable waste holding tank can be rented separately. Often an outdoor or mobile
business owns a portable office trailer to use in the conduct of its business. The office trailer was
purchased with basic restroom components (e.g., a toilet and a sink), but without a waste
disposal system. When the office trailer is placed on a temporary job site, the outdoor or mobile
business contracts with another company to provide, place, and connect a portable waste holding
tank underneath the office trailer to store toilet waste from the office trailer restroom. The
company providing the tank will disconnect and remove it from the job site at the end of the
contract period. This company also provides the servicing and cleaning of the portable waste
holding tank during the contract period.
DISCUSSION
The purpose of this advisory opinion is to address the applicability of the sales and use tax and
the partial tax exemption for portable toilets to a mobile trailer containing a portable toilet and
portable sink, a portable standalone hand washing station, or a portable waste holding tank.
Code Section 12-36-910(A) imposes a “sales tax, equal to [six] percent of the gross proceeds of
sales, upon every person engaged…in the business of selling tangible personal property at
retail.” Code Section 12-36-1310(A) imposes a “use tax…on the storage, use, or other
consumption in this State of tangible personal property purchased at retail for storage, use, or
other consumption in this State, at the rate of [six] percent of the sales price of the property,
regardless of whether the retailer is or is not engaged in business in this State.” 2
The term “sale” is defined in Code Section 12-36-100 to mean “any transfer…of tangible
personal property for a consideration including…a rental, lease, or other form of agreement.”
The tax is imposed on the “gross proceeds of sales” or “sales price,” as defined in Code Sections
12-36-90 and 12-36-130.
Code Section 12-36-2120 provides exemptions from the sales and use tax, including a partial
exemption for the rental of “portable toilets.” The statute reads, in part:
Exempted from the taxes imposed by this chapter are the gross proceeds of sales, or
sales price of:

(62) seventy percent of the gross proceeds of the rental or lease of portable toilets.

2

The sales and use tax rate was increased from 5% to 6% in 2007. See Code Section 12-36-1110.

3

Based upon the above, the total amount charged in conjunction with the sale of tangible personal
property is included in the tax base. Charges by a business for temporarily providing a portable
toilet to another person constitute a rental of tangible personal property subject to the sales and
use tax. Any additional charges for servicing the toilets (whether optional or mandatory) that are
made in connection with, or as part of, the rental of portable toilets are includable in “gross
proceeds of sales” or “sales price.” However, after application of the partial exemption, only
30% of the gross proceeds (e.g., rental fees, cleaning and pumping charges, and delivery
charges) for the rental or lease of portable toilets is subject to the sales and use tax.
The partial exemption strictly applies to portable toilets; it does not apply to all bathroom
components or separate elements of a sanitation system. Accordingly, a portable standalone hand
washing station is not a “portable toilet.” As such, the partial sales and use tax exemption under
Code Section 12-36-2120(62) does not apply. 3 The rental of a portable standalone hand washing
station is subject to sales and use tax (state and local) based upon the total gross proceeds of sales
(e.g., rental amount, cleaning fee, delivery charge, etc.).
The application of the sales and use tax to a transaction involving a portable toilet is different from a
transaction involving a portable waste holding tank and the service of waste removal and disposal. It
has been established by the courts of South Carolina, that the “true object” of a transaction
involving a portable toilet is the rental of tangible personal property. 4 However, the “true object” of
a transaction involving a portable waste holding tank, as described in the facts, is not the rental of
tangible personal property; it is a service of waste removal and disposal. This transaction is akin to
any transaction where a nontaxable service is the “true object” of the transaction and tangible
personal property is provided with the service. The tangible personal property provided with a
nontaxable service, where the nontaxable service is the “true object” of the transaction, is
considered used or consumed by the service provider and not sold or rented to the customer. All
charges associated with a nontaxable service that is the “true object” of the transaction are a part of
the gross proceeds of the nontaxable service transaction and not subject to the sales and use tax.5
Therefore, since the true object of a transaction involving a waste holding tank, as described in the
facts, is the service of collecting and disposing of waste, charges for the service are not subject to
the sales and use tax. (While the charges for the service are not subject to tax, the purchase of the
waste holding tank by the person providing the waste removal and disposal service is subject to
sales and use tax.)

3

Exemptions in taxing statutes exist through legislative grace and one asserting an exemption must bring himself
squarely within the statute authorizing the exemption. Southern Weaving Co. v. Query, 206 S.C. 307, 34 S.E.2d 51
(1945).
4
See Boggero v. South Carolina Department of Revenue, 414 S.C. 277, 777 S.E.2d 842 (2015), and SC Revenue
Ruling #09-5.
5
For example, if an attorney charges $500 for his professional services and also charges $25 for copies of the will he
prepared for his client, the attorney is considered to have charged $525 for a nontaxable professional service. The
$25 is part of the nontaxable professional services provided. The purchase of paper, binder, and other tangible
personal property used by the attorney in providing his service is subject to the sales and use tax. Note: In instances
where a provider of a nontaxable service is also in the business of making sales of tangible personal property at
retail, the service provider must obtain a retail license and remit the tax on such sales of tangible personal property.
(See SC Regulation 117-308.) This determination is made based on the facts and circumstances. See also SC Private
Letter Ruling #04-2 concerning a construction debris disposal service where it held that “customers are hiring the
taxpayer to haul away and dispose of construction waste…and not renting containers from the taxpayer.”

4

The following examples provide guidance in determining applicability of the sales and use tax
and the partial exemption for the rental or lease of portable toilets to various portable restrooms
and components.
Standard Portable Toilet Rental. A homeowner rents a portable toilet for the month for $100
while remodeling his home. The rental price includes a rental fee for the unit, a delivery charge,
and a service charge for waste removal. The measure upon which the sales and use tax (state and
local) is calculated is $30 ($100 total gross proceeds less $70 partial 70% exemption).
Mobile Restroom Trailer. A couple rents a mobile restroom trailer unit for a weekend wedding
event for $500. The unit contains two portable toilets and sinks. The invoice also includes $100
of optional items for air conditioning, solar lighting for night events, disposable seat covers, and
toilet paper. The unit contains a waste holding tank. Since the primary purpose of the mobile
restroom trailer unit is to provide a portable toilet, the partial sales and use tax exemption applies
to the entire rental charge. The measure upon which the sales and use tax (state and local) is
calculated is $180 ($600 total gross proceeds less $420 partial 70% exemption).
Portable Standalone Hand Washing Unit Rental. A food festival rents a standalone hand washing
unit for the week for $1,000. The unit is set up outside restroom facilities and also near the food
stands so people can wash their hands before eating or preparing food. The unit does not qualify
for the partial sales and use tax exemption for portable toilets. The measure upon which the sales
and use tax (state and local) is calculated is $1,000.
Waste Removal Service and Waste Holding Tank Rental for use with Mobile Office Trailer. A
construction company owns a portable office trailer for use at construction sites. For the
convenience of its office staff, the construction company’s office trailer contains an indoor
restroom facility with a toilet and a sink that utilizes a portable waste holding tank located under
the office trailer. The construction company contracts to have the waste removed by a waste
removal company that provides a waste holding tank as part of the waste removal service.
The waste removal company charges the construction company either a monthly fee of $250
along with a one-time delivery fee of $25 or charges a $200 monthly waste removal and disposal
service, a $50 monthly tank rental fee, and a $25 one-time tank delivery charge.
Since the partial exemption applies strictly to portable toilets and not to components or separate
elements of a sanitation system, the waste holding tank rental does not qualify for the partial
sales and use tax exemption for portable toilets provided under Code Section 12-36-2120(62).
However, because the “true object” of the transaction is the service of waste removal and
disposal, the total monthly fee of $250, and the one-time tank delivery fee of $25, are not subject
to sales and use tax, regardless of how billed to the customer.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/W. Hartley Powell
W. Hartley Powell, Director
December 10
, 2019
Columbia, South Carolina
5