What qualifies for South Carolina's annual August sales tax holiday, and when is a purchase treated as tax-free?

Plain-English summary

South Carolina Revenue Ruling #19-4 is the Department's detailed guide to the annual three-day sales tax holiday. It begins at 12:01 a.m. on the first Friday in August and ends at midnight the following Sunday, using South Carolina's time zone.

Eligible purchases are exempt from both the 6% state sales and use tax stated in the ruling and local sales and use taxes administered by the Department. The exemption applies to in-state and out-of-state sellers and marketplace facilitators. A retailer cannot opt out.

The principal exempt categories are clothing and clothing accessories, footwear, school supplies used for assignments, computers, computer software, printers and printer supplies, and specified bed and bath items. The holiday has no dollar cap, covers new and used goods, and applies to purchasers of any age.

The statute excludes items for use in a trade or business, items placed on layaway, clothing and footwear rentals, cosmetics, eyewear, furniture, jewelry, wallets, and watches. Smartphones, e-readers, video-game systems, mattresses, sleeping bags, and many dorm or household supplies are among the ruling's taxable examples.

What this means for you

Shoppers

An eligible purchase qualifies when it is delivered and paid for during the holiday, or when the customer orders and pays during the holiday and the retailer accepts it for immediate shipment. Back orders can qualify; a customer-requested delayed shipment does not. Layaways never qualify.

Online and mail-order retailers

Apply South Carolina's holiday clock when buyer and seller are in different time zones. Orders accepted for immediate shipment during the window qualify even if actual delivery occurs later.

Retailers handling extras and exchanges

Shipping, handling, delivery, alterations, monogramming, and an extended warranty bought with an exempt item are also exempt under the ruling's examples. After the holiday, a same-type exchange at the same or lower price remains exempt, but a higher-priced or different-type replacement is taxable on the new item's full selling price.

Employers and employees

An employee buying and not being reimbursed for eligible work clothing can qualify because the employee is not treated as conducting a trade or business. An employer's purchase for employees, or an employee purchase reimbursed by the employer, does not qualify.

Common questions

Q: Are computers tax-free regardless of price?
A: Yes, if not for business use. A packaged computer system is exempt; separately sold accessories are taxable unless they independently qualify as school supplies.

Q: Are school instruments exempt?
A: Yes, including rentals, when used for classroom or home school assignments.

Q: Does a rain check extend the holiday?
A: No. A rain check used during the holiday can qualify, but one issued during the holiday and redeemed later is taxable.

Q: Are purchases for a business exempt?
A: No. The statute excludes a sale or lease for use in a trade or business.

Citations and references

• S.C. Code Ann. § 12-36-2120(57) — annual sales tax holiday and statutory categories
• S.C. Code Ann. §§ 12-54-196 and 12-54-90 — enforcement provisions cited for retailer noncompliance

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: RR19-4.pdf

Original ruling text

STATE OF SOUTH CAROLINA

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

SC REVENUE RULING 19-4

SUBJECT:

Sales Tax Holiday – Frequently Asked Questions and List of Eligible Items
(Sales and Use Tax)

DATE:

June 24, 2019

SUPERSEDES:

SC Revenue Ruling #10-7
SC Revenue Ruling #10-8

REFERENCES:

S.C. Code Ann. Section 12-36-2120(57) (2014)

AUTHORITY:

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

SCOPE:

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.

OVERVIEW AND PURPOSE OF UPDATE
South Carolina law suspends the collection of sales and use tax on retail sales of qualifying items by
retailers for three full days each August. This annual sales tax holiday allows resident and nonresident
shoppers an opportunity to purchase certain items free of South Carolina’s 6% State sales and use tax
and free of any local sales and use taxes collected by the Department on behalf of local jurisdictions.
The tax holiday applies to certain items specified by statute and includes school supplies used for
school assignments, apparel, electronics, and bed and bath items. It applies to eligible items purchased
for use by any age, from infant to senior citizen, to new or used items, and to items of any dollar
amount.
The sales tax holiday has been in effect since 2000. The purpose of this advisory opinion is to update
the Department’s guidance on South Carolina’s annual tax free holiday. This document combines the
prior question and answer document and the list of examples of exempt and non-exempt items into one
document. This advisory opinion now contains frequently asked questions regarding the sales tax
holiday and a list of examples of exempt and non-exempt items by category.

1

LAW
Code Section 12-36-2120(57) exempts from the sales and use tax:
(a)

sales taking place during a period beginning 12:01 a.m. on the first Friday in August and
ending at twelve midnight the following Sunday of:
(i) clothing;
(ii) clothing accessories including, but not limited to, hats, scarves, hosiery, and handbags;
(iii) footwear;
(iv) school supplies including, but not limited to, pens, pencils, paper, binders, notebooks,
books, bookbags, lunchboxes, and calculators;
(v) computers, printers and printer supplies, and computer software;
(vi) bath wash cloths, blankets, bed spreads, bed linens, sheet sets, comforter sets, bath
towels, shower curtains, bath rugs and mats, pillows, and pillow cases.

(b)

The exemption allowed by this item does not apply to:
(i) sales of jewelry, cosmetics, eyewear, wallets, watches;
(ii) sales of furniture;
(iii) a sale of an item placed on layaway or similar deferred payment and delivery plan
however described;
(iv) rental of clothing or footwear;
(v) a sale or lease of an item for use in a trade or business.

(c)

Before July tenth of each year, the department shall publish and make available to the public
and retailers a list of those articles qualifying for the exemption allowed by this item.

GENERAL QUESTIONS

1. Q. When is the sales tax holiday?
   A. South Carolina’s sales tax holiday is a three day (72 hour) event taking place each August. It
   begins at 12:01 a.m. on the first Friday morning in August and goes through the following
   Sunday night.
2. Q. What items may be purchased tax free during the sales tax holiday?
   A. The sales tax holiday applies to purchases of eligible items of any dollar amount for use by any
   age. The following items qualify for the sales tax holiday:
   •
   •
   •
   •
   •

Clothing (including custom-made clothes) & clothing accessories
Footwear
School supplies used for school assignments
Computers, computer software, printers, and printer supplies (whether purchased or leased)
Certain bed and bath supplies

2

The following items are specifically not exempt during the sales tax holiday by law:
•
•
•
•
•
•
•

Items for use in a trade or business
Items placed on layaway or similar deferred payment and delivery plan
Clothing and footwear rentals (e.g., tuxedo rentals, bowling shoe rentals)
Cosmetics
Eyewear (prescription or nonprescription)
Furniture
Jewelry, wallets, and watches

A list of examples of exempt and non-exempt items is provided in this advisory opinion. The
list is not all-inclusive.

3. Q. Does the tax holiday apply to sales of qualifying items by out-of-state sellers (e.g., internet or
   mail order sellers) or marketplace facilitators?
   A. Yes. The sales tax holiday suspends the collection of sales and use tax on retail sales of
   qualifying items by all retailers (in-state and out-of-state retailers).
4. Q. What time zone determines the authorized time period for the sales tax holiday?
   A. The time zone in South Carolina determines the authorized time period for the sales tax holiday
   when the purchaser and the seller are located in different time zones.
5. Q. Does the sales tax holiday exempt eligible purchases from both state and local sales and use
   taxes?
   A. Yes. Eligible items are exempt from both the 6% State sales and use tax and the local sales and
   use taxes collected by the Department on behalf of local jurisdictions. The local tax rate varies
   by county. A complete list of current local tax rates is published on the Department’s website.
6. Q. Can a retailer “opt out” of the sales tax holiday?
   A. No. The Department may impose penalties and other enforcement provisions on a retailer who
   does not make a good faith effort to suspend the sales and use tax collection on eligible items
   during the tax holiday period. See Code Sections 12-54-196 and 12-54-90.
7. Q. What should a consumer do if a retailer charges sales and use tax on an exempt item during the
   tax holiday period?
   A. The Department recommends the purchaser refer the retailer to this advisory opinion. After
   reviewing the law and the Department’s guidance, the retailer should refund the tax paid on an
   eligible item to the purchaser.

3

8. Q. When is the “sale date” of an eligible item deemed to occur?
A. The sale of an item is deemed to occur during the tax holiday period, and therefore exempt
from sales and use tax when:
a. The item is both delivered to and paid for by the customer during the tax holiday
period, or
b. The customer orders and pays for the item and the retailer accepts the order during the tax
holiday period for immediate shipment, even if delivery is made after the tax holiday
period.
An order is accepted by the retailer when the retailer has taken action to fill the order
for immediate shipment (e.g., assigns an “in date” to a mail order or assigns an “order
number” to an internet or telephone order). An order is for immediate shipment even if
the shipment may be delayed because stock is currently unavailable to, or on back order
by, the retailer or because of a backlog of orders. An order is not for immediate
shipment when the customer requests to delay shipment.
The examples below illustrate when the “sale date” of an eligible item is deemed to
occur.
Transaction Type
Special or Custom Order. (e.g., a custom made suit, a
special order bedspread)
The customer orders and pays for the eligible item
and the retailer accepts the order during the tax
holiday period. The customer does not request a
delay in shipment, but the order is not delivered until
September.
Use of a “90 days same as cash” Financing Plan.
During the tax holiday period, the customer signs a
financing contract obligating himself to pay for an
eligible item over time. Either delivery is made
during the holiday period or the retailer accepts the
order during the tax holiday period for immediate
shipment.
Purchase with Rain Check. During the tax holiday
period, the customer uses a rain check that was issued
before the tax holiday period to purchase an eligible
item.
Layaway Sales. The customer selects eligible items
and places them on layaway. The retailer accepts the
order during the tax holiday period.

4

Tax Treatment
The sale is deemed to take place during
the tax holiday period. The sale is tax
free, whether delivery is made during or
after the tax free period.

The sale is deemed to take place during
the tax holiday period. The sale is tax
free since the obligation to pay was
agreed to during the tax free period.

The sale takes place during the tax
holiday period. The sale is not subject to
sales and use tax.
The sale is subject to sales and use tax.
The tax holiday statute specifically does
not apply to layaway sales.

9. Q. How does the sales tax holiday exemption apply to exchanges and rain checks taking place
after the sales tax holiday period?
A. The sales tax holiday exemption applies to exchanges taking place after the sales tax holiday
period and rain checks used after the sales tax holiday period as follows:
Transaction Type and Time
Exchange for Same Type Item for Same or Lower
Price. The exchange of an eligible item purchased
during the tax holiday period for the same type item
for the same or a lower price (e.g., exchanged for a
different size or color) after the tax holiday period.

Exchange for Same Type Item for Higher Price. The
exchange of, or credit for, an eligible item purchased
during the tax holiday period for the same type item
for a higher price (e.g., exchange a dress for a higher
price dress) after the tax holiday period.

Exchange for Different Type Item. The exchange of,
or credit for, an eligible item purchased during the
tax holiday for a different type item after the tax
holiday period (e.g., exchange pants for shoes).

Rain Check Issued. A rain check is issued during the
tax holiday period but is used after the tax holiday
period to purchase the out-of-stock item at the sales
price. The item would have been eligible to be tax
free.

Tax Treatment
The new item received after the tax
holiday period is not subject to
sales and use tax since no
additional amount was paid for the
new item. For example, a $25 shirt
purchased during the tax holiday is
exchanged after the tax holiday for
a $25 shirt.
The sale of the new item after the
tax holiday period is subject to
sales and use tax based on the sales
price of the new item. For example,
a $60 dress purchased during the
tax holiday is exchanged after the
tax holiday for a new $100 dress.
Sales and use tax is due on $100. 1
The sale of the new item received
after the tax holiday is subject to
sales and use tax based on the sales
price of the new item. For
example, a $50 pair of pants
purchased during the tax holiday is
exchanged after the tax holiday for
a $30 pair of shoes. Sales and use
tax is due on the $30 new pair of
shoes.
The purchase of the item is subject
to sales and use tax.

1
The trade-in provision in Code Section 12-36-90(2)(c) applies only to “second hand property” and, therefore, is not
applicable to this example.

5

10. Q. Does the sales tax holiday also apply to delivery charges, service charges for alterations or
monogramming, and similar charges associated with the purchase of an exempt item?
A. Yes. The sales tax holiday also applies to delivery charges, service charges, and similar charges
associated with the purchase of an exempt item. The examples below illustrate the application
of the exemption to additional charges generally included in the tax base.
Additional Charges
Shipping, Handling, or Delivery
Charges

Alteration and Monogramming
Charges
Extended Computer Warranty

Tax Treatment
A retailer sells a pair of eligible shoes during the tax
holiday for $100. A shipping and handling charge of $15 is
added to the price. The entire charge of $115 is exempt
from sales and use tax.
A retailer sells a pair of pants during the tax holiday for
$75 and charges $10 to hem the pants. The entire charge of
$85 is exempt from sales and use tax.
A retailer sells a computer during the tax holiday for
$2,000 and charges a $75 delivery fee. The customer also
purchases an extended warranty contract at the same time
for $200. The entire charge of $2,275 is exempt from sales
and use tax.

SPECIFIC EXAMPLES OF EXEMPT AND TAXABLE ITEMS

11. Q. What are “school supplies” for purposes of the sales tax holiday?
    A. “School supplies” are items used in the classroom or at home with respect to school
    assignments. The term “school supplies” includes computer supplies and musical instruments,
    such as pianos, when used in the classroom or at home with respect to school assignments. The
    term “school supplies” does not include items such as refrigerators, bicycles, tissues, hand
    sanitizer, and storage containers since they are not used for school assignments.
    Note: Since a permanent exemption in Code Section 12-36-2120(2)(a) exempts books used as
    part of a course of study in elementary schools, high schools and institutions of higher learning
    from tax, the sales tax holiday exemption in Code Section 12-36-2120(57) for “books” applies
    to other books used for school purposes, such as dictionaries, thesauruses, encyclopedias, and
    books used for science projects or book reports.
12. Q. Does the tax holiday exemption for computers apply to the separate purchase of computer
    supplies, such as a monitor, keyboard, or mouse?
    A. Since the tax holiday law exempts computers, but does not exempt computer supplies, the sale
    of a computer monitor, keyboard, or mouse by itself is taxable during the holiday period, unless
    the computer supply is a “school supply” (i.e., is used in the classroom or at home with respect
    to school assignments).
    Note: The purchase of a packaged unit that includes the central processing unit (e.g., central
    processing unit, monitor, keyboard, and mouse) is exempt during the tax holiday period.

6

13. Q. Does the tax holiday exemption for “computers” apply to smartphones, cell phones, e-readers,
video gaming systems, and other similar devices?
A. No. Smartphones, cell phones, and other handheld devices that allow users to make telephone
calls are not exempt during the tax holiday. In addition, the tax holiday does not apply to video
gaming systems or to handheld devices that are primarily used to download and (a) listen to
music, (b) watch videos, or (c) read books.

14. Q. Does the tax holiday exemption apply to purchases of fabric and sewing supplies used to sew
    eligible clothing or bedding?
    A. Yes. Sales of fabric, thread, lace, zippers, buttons, and other sewing materials that become part
    of the clothing or bedding are exempt during the tax holiday period. However, sewing
    equipment and supplies (e.g., sewing machines, patterns, tape measures, needles, and thimbles)
    are not exempt.
15. Q. Does the tax holiday exemption apply to purchases of items for use in a “trade or business”?
    A. No. The tax holiday does not apply to the sale or lease of an item for use in a trade or business.
    The term “trade or business” includes activities carried on for the production of income from
    selling goods or performing services. The facts and circumstances of each case determine
    whether or not an activity is a trade or business. The regularity of activities and transactions
    and the production of income are important elements.
16. Q. Does the tax holiday exemption for “clothing,” “clothing accessories,” and “footwear” apply to
    eligible items purchased by an employee to wear for work?
    A. Yes. An employee is not considered engaged in a trade or business in connection with his work
    as an employee. Purchases of uniforms, footwear, or other eligible items by an employee
    during the tax holiday period are exempt from sales and use tax, provided the employee is not
    reimbursed by the employer for the purchases. However, uniforms, work footwear, protective
    gloves, breathing masks, helmets, tool belts, and other items purchased by an employer for its
    employees’ use at work (or if reimbursed by the employer to the employee) are not exempt
    during the tax holiday period.
    Note: See a permanent exemption under Code Section 12-36-2120(54) exempting clothing and
    other attire required for working in a Class 100 or better as defined in Federal Standard 209E
    clean room environment.
    SOUTH CAROLINA DEPARTMENT OF REVENUE

s/W. Hartley Powell
W. Hartley Powell, Director
June 24
, 2019
Columbia, South Carolina

7

SOUTH CAROLINA SALES TAX HOLIDAY
Examples of Exempt and Taxable Items (Not All Inclusive)
(See Code Section 12-36-2120(57) and SC Revenue Ruling #19-4.)
I.
CLOTHING and CLOTHING ACCESSORIES
The tax holiday applies to purchases of new or used clothing and clothing accessories for use by any age and
of any dollar amount. It does not apply to clothing and accessories used in a trade or business or rented.
Examples of Exempt Items
 Everyday
Belts & suspenders
Dresses & skirts
Leggings
Neckties & scarves
Pants, jeans & shorts
Shirts & blouses
Suits & blazers
Sweaters & sweatshirts
 Outer Wear
Coats (all types)
Ear muffs
Gloves & mittens
Hats & caps
Rainwear & umbrellas
Vests

 School Wear
Graduation caps & gowns
Gym suits
Uniforms (band, school & sports)
 Sleepwear
 Underwear
Bras, panties, slips, & T-shirts
Diapers (cloth & disposable)
Hosiery, socks & tights
Incontinent underwear
 Sports/Exercise Wear
Exercise clothing
Gloves (batting & golf)
Hunting & ski clothing
Leotards
Swim wear & water apparel

 Miscellaneous/Specialty
Belt buckles
Bibs
Choir robes
Costumes
Fabric for custom clothing
Formal wear
Hair accessories & wigs
Handkerchiefs
Maternity clothing
Pet coats & sweaters
Pocketbooks & purses
Scout uniforms
Work uniforms purchased by
the employee

 Sports Equipment
Helmets (bicycle & football)
Hockey & baseball mitts
Protective wear (masks,
mouth guards, knee pads &
swim goggles)
Life jackets

 Miscellaneous/Specialty
Cosmetics
Eyewear (contacts & glasses)
Fitness tracking devices
Jewelry
Phone cases
Wallets & billfolds
Watchbands
Watches & smartwatches

Examples of Taxable Items
 Clothing Placed on Layaway
 Costume Rentals
 Formal Wear Rentals
 Safety Equipment (hard hats &
ear protectors)
 Uniforms Purchased by
Employers for Employees

II.
FOOTWEAR
The tax holiday applies to purchases of new or used footwear for use by any age and of any dollar amount.
It does not apply to footwear used in a trade or business or rented.
Examples of Exempt Items
 Everyday
Boots (cowboy & hunting)
Flip flops
Sandals
Shoes (all types)
Slippers

Sports/Exercise
Cleats
Dance shoes (ballet & tap)
Hiking shoes & boots
Sports shoes (golf & bicycle)
Ski boots

 Miscellaneous/Specialty
Diabetic shoes
Orthopedic shoes
Rain boots & over shoes
Skates (ice & in-line)

 Footwear Accessories
Shoe inserts
Shoe laces

 Work/Safety Shoes Provided to
Employees by the Employer

Examples of Taxable Items
 Bowling Shoe Rentals
 Shoes Placed on Layaway

Revised June 2019

8

III.
SCHOOL SUPPLIES
The tax holiday applies to purchases of “school supplies” used in the classroom or at home for school
assignments of any dollar amount, whether purchased or leased.
Examples of Exempt Items
 Art Supplies
 Book Bags & Backpacks
 Binders
 Books
 Calculators
 Calendars
 Compasses & Protractors
 Computer Bags
 Computer Supplies (earbuds,
headphones, stylus & flash
drives)

 Crayons
 Erasers
 Folders
 Glue & Glue Sticks
 Highlighters
 Index Cards
 Lunch boxes
 Markers
 Music Instruments Used for
School Assignments (including
rentals)

 Music Supplies (sheet music)
 Notebooks
 Paper (typing, graph, construction
& poster board)
 Pencil Sharpeners
 Pencils & Pencil Cases
 Pens
 Rulers
 Scissors
 Stapler & Staples
 Tape

 Clocks
 Dorm Supplies (housewares,
refrigerator & toiletries)
 Furniture (desks & bookcases)
 Hand Sanitizers & Tissues

 Office Supplies
 Smartphones & Cell Phones
 Stationery
 Strollers & Car Seats
 Toys

Examples of Taxable Items
 Backpacks for camping
 Batteries
 Bicycles
 Briefcases
 Cleaning Supplies

IV.
COMPUTERS, COMPUTER SOFTWARE, PRINTERS, AND PRINTER SUPPLIES
The tax holiday applies to computers, computer software, printers, and printer supplies of any dollar
amount, whether purchased or leased. It does not apply to items used in a trade or business.
Examples of Exempt Items
 Computers & Computer Software
Computer supplies (monitor, keyboard, mouse, &
speakers) when sold as a package with a central
processing unit (CPU)
Laptop, desktop, or tablet computer systems having
a CPU
Warranty and service agreements

 Printers & Printer Supplies
Cartridges
Printers
Printer Inks
Printer Papers
Toners

Examples of Taxable Items
 Computer Supplies Sold Separately (mouse &
keyboard) for Business Use (see “school
supply” examples of exempt items)
 Computers Used in a Business

 E-readers
 Music & Video Players
 Phone Chargers
 Replacement Parts

 Scanners
 Smartphones & Phones
 Televisions
 Video Game Consoles

V.
BED AND BATH SUPPLIES
The tax holiday applies to bed and bath supplies for use by any age and of any dollar amount. It does not
apply to items used in a trade or business.
Examples of Exempt Items
 Bath
Mats & rugs
Shower curtains & liners
Towels & wash cloths
(bath, beach, kitchen & sport towels)

 Bedding
Bed skirts
Bed spreads & comforters
Blankets & throws
Bumper pads & crib linens
Mattress pads & toppers
Pillows (all types)
Sheets & pillow cases

Examples of Taxable Items
 Bath (Miscellaneous)
Accessories (soap dish, towel holder, shower
curtain rings & rod)
Cleaning supplies
Toiletries
Trashcans

 Bed (Miscellaneous)
Dorm items (ironing boards, rugs, clothes racks,
hangers, storage containers & lamps)
Furniture (bed frames, cribs & chairs)
Mattresses & box springs
Sleeping bags
Window treatments

Revised June 2019

9