How does South Carolina's discount for timely filing and paying sales and use tax work — how much is it, what's the cap, and which returns qualify?

Plain-English summary

South Carolina gives sales-tax filers a small discount for paying on time — a reward for filing the return and paying the tax by the due date. SC Revenue Ruling #21-7 explains how the discount in Code § 12-36-2610 works.

Who gets it and how much. When a required sales or use tax return is filed and the tax is paid in full on or before the final due date (including any approved extension), the taxpayer keeps a discount based on the total state + local tax due on the return:

• Less than $100 due → 3% of the tax due
• $100 or more due → 2% of the tax due

The annual caps. The discount is figured per taxpayer, per state fiscal year (July 1 – June 30) — not per retail location and not on a calendar year:

• $3,000 for a taxpayer filing paper returns
• $3,100 for a taxpayer filing electronically
• $10,000 for an out-of-state retailer that voluntarily registers to collect and remit use tax (a seller with neither physical presence nor economic nexus in South Carolina)

A taxpayer with several locations and licenses still gets one cap, not one per location.

Which taxes and forms. The discount covers the state sales/use tax plus the local sales/use taxes the Department administers and collects — local option, capital projects, transportation projects, education capital improvements, school district, tourism development, and the Catawba Tribal sales tax. It's allowed on the ST-3 (general return), ST-388 (accommodations), ST-403 (aviation fuel), and ST-455 (maximum tax) returns. It is not allowed on the ST-236 (casual excise/use) or UT-3 (use tax payment) returns, because those returns have no statutory due date.

Timing rules. Sales and use tax is generally due by the 20th of the month after the tax accrues (§ 12-36-2570). A paper return is timely if postmarked on or before the due date; an electronic return is timely if transmitted by midnight of the due date. The mailbox rule (IRC § 7502) applies to mailed check payments, and electronic payments are timely if the transfer is initiated by the due date. If the due date falls on a Saturday, Sunday, or legal holiday, it moves to the next business day (§ 12-60-50). A payment declined for insufficient funds is not timely, and no discount is allowed if the return or the tax is late (though § 12-54-87 preserves the discount if the Department waives late-filing penalties for reasonable cause).

Amended returns. The discount from a timely original return generally isn't recomputed on a later amended return. If you amend after the due date to report more tax, your discount stays at the original amount — no discount on the extra tax. If you amend on or before the due date, the discount is recomputed on the amended figures. Either way, the discount is never reduced or required to be repaid because of an amendment.

What this means for you

Retailers and business owners

File and pay by the 20th and you keep 2–3% of the tax as a discount, up to the annual cap. E-filing raises your cap slightly ($3,100 vs. $3,000). The single most important thing to protect the discount is timeliness — a late return or a bounced payment forfeits it entirely for that period.

Multi-location businesses

Don't expect a separate cap for each store. The discount and the $3,000/$3,100 cap apply to the taxpayer, regardless of how many retail locations and licenses you hold.

Out-of-state / remote sellers

If you have no physical or economic nexus but voluntarily register to collect South Carolina use tax, your discount cap is much higher — $10,000 per state fiscal year — an incentive to collect voluntarily.

Bookkeepers and accountants

Track the cap on a July–June fiscal year, not a calendar year, and remember the discount is on total state + local tax. When amending, don't recompute the discount unless the amendment is filed by the original due date; extra tax paid on a later amendment earns no additional discount, and the original discount is never clawed back.

Common questions

Q: How much is the South Carolina timely-filing discount?
A: 3% of the total state and local tax due if that total is under $100, or 2% if it's $100 or more — provided the return is filed and the tax paid in full by the due date.

Q: Is there a maximum?
A: Yes, per taxpayer per state fiscal year: $3,000 (paper filers), $3,100 (electronic filers), or $10,000 (out-of-state sellers voluntarily collecting use tax).

Q: Which returns qualify?
A: The ST-3, ST-388, ST-403, and ST-455. The discount does not apply to the ST-236 (casual excise) or UT-3 (use tax payment) returns, which have no statutory due date.

Q: Do I lose the discount if I file late?
A: Yes. No discount is allowed if the return or the tax is received after the due date (or after any extension), and a payment declined for insufficient funds is not timely.

Q: What happens to the discount when I file an amended return?
A: If you amend after the due date, the discount stays at the amount on your timely original return (no discount on extra tax). If you amend on or before the due date, it's recomputed. It is never reduced or required to be repaid due to an amendment.

Citations and references

Statutes:

• S.C. Code Ann. § 12-36-2610 — the discount for timely filed and paid returns (rates and caps)
• § 12-36-2570 — due dates (20th of the following month); § 12-36-40 — "taxpayer"
• § 12-54-70 — extensions; § 12-54-87 — discount preserved where penalties waived for reasonable cause; § 12-54-250 — electronic payment timeliness
• § 12-60-50 — due date on weekend/holiday; IRC § 7502 — mailbox rule

Related Department guidance (described in prose, not linked): SC Revenue Ruling #13-1 (mailbox rule for payments) and SC Revenue Procedure Bulletin #02-2 (list of legal holidays).

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: RR21-7.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 #21-7
SUBJECT:

Discount for Timely Filed Returns
(Sales and Use Tax)

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous advisory opinions and any oral directives in conflict
herewith.

REFERENCES:

S.C. Code Ann. Section 12-36-2610

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.

PURPOSE
The purpose of this advisory opinion is to provide guidance to persons filing a sales and use tax
return regarding the discount provided in Code Section 12-36-2610 for timely filing and paying
the sales and use taxes due.
LAW
Code Section 12-36-2610 provides for a discount for the timely payment of State and local sales
or use tax, and reads:
When a sales or use tax return required by Section 12-36-2570 and a local sales and
use tax law administered and collected by the department on behalf of a local
jurisdiction is filed and the taxes due on it are paid in full on or before the final due
date, including any date to which the time for making the return and paying the tax
has been extended pursuant to the provisions of Section 12-54-70, the taxpayer is
allowed a discount as follows:

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(1) on taxes shown to be due by the return of less than one hundred dollars, three
percent;
(2) on taxes shown to be due by the return of one hundred dollars or more, two
percent.
In no case is a discount allowed if the return, or the tax on it is received after the
due date, pursuant to Section 12-36-2570, or after the expiration of any extension
granted by the department. The discount permitted a taxpayer under this section
may not exceed three thousand dollars during any one state fiscal year. However,
for taxpayers filing electronically, the discount may not exceed three thousand one
hundred dollars. A person making sales into this State who cannot be required to
register for sales and use tax under applicable law but who nevertheless voluntarily
registers to collect and remit use tax on items of tangible personal property sold to
customers in this State is entitled to a discount on returns filed as otherwise
provided in this section not to exceed ten thousand dollars during any one state
fiscal year.
QUESTIONS AND ANSWERS

1. Q. When is a discount allowed for filing a sales or use tax return?
   A. A taxpayer is allowed a discount when a required sales or use tax return is timely filed
   and the taxes due on the timely filed return are paid in full on or before the final due date
   (including any date to which the time for making the return and paying the tax has been
   extended 1).
   Note: See Code Section 12-60-50 when the last day of a specified time period is a
   Saturday, Sunday, or a legal holiday. For sales and use tax purposes, a legal holiday is
   any day the Department or United States Postal Service offices are closed.
2. Q. Who is allowed to claim the discount?
   A. The discount is claimed on the sales and use tax return by the “taxpayer.” A taxpayer is
   defined in Code Section 12-36-40 to mean any person liable for taxes under this chapter
   (i.e., the Sales and Use Tax Act). While a taxpayer may have multiple retail locations
   and a retail license for each location, the discount applies to the taxpayer and not to each
   retail location.

Code Section 12-54-70(c) provides an extension of time to file sales and use tax returns for no more
than one additional month beyond the due date upon approval of the Department. Code Section 12-4320(6) provides for certain situations when the last day prescribed for filing a return or making a payment
is postponed or disregarded. These situations include a presidentially declared disaster or terrorist act or
military action. Code Section 12-54-87 provides that for purposes of discounts allowed for timely filing
returns, if the Department waives all penalties for late filing due to reasonable cause, the discount must be
allowed despite the late filing.

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3. Q. Does the discount apply to State and local sales and use taxes?
A. The discount applies to: (1) State sales and use taxes and (2) local sales and use taxes
administered and collected by the Department on behalf of a local jurisdiction. Local
sales and use tax administered and collected by the Department include: local option;
capital projects; transportation projects; education capital improvements; school district
taxes; tourism development tax; and Catawba Tribal sales tax.
The specific sales and use tax return filed with the Department is based on the taxpayer’s
business. Form ST-3, “State Sales and Use Tax Return,” is the general sales and use tax
return that is filed by most businesses.
Certain specific businesses, such as those liable for the sales tax on accommodations, the
sales tax on aviation fuel, or the maximum sales tax of $300 or $500 imposed on specific
items file one of the following sales and use tax forms:
ST-388 “State Sales, Use, and Accommodations Tax Return”
ST-403 “State Sales, Use, and Aviation Fuel Tax”
ST-455 “State Sales, Use, and Maximum Tax Return”
The discount provided in Code Section 12-36-2610 is allowed for sales and use tax paid
on the above referenced forms.
The discount, however, does not apply to taxes paid on the following returns since these
returns do not have a specified statutory due date:
ST-236 “Casual Excise or Use Tax Return”
UT-3 “Use Tax Payment Return”

4. Q. What is the maximum discount amount available each State fiscal year?
   A. The discount for a taxpayer cannot exceed the following amounts in a State fiscal year:
   Taxpayer Filing Paper Returns. The discount allowed cannot exceed $3,000 for a
   taxpayer who files by paper (regardless of the number of retail locations).
   Taxpayer Filing Electronic Returns. The discount allowed cannot exceed $3,100 for a
   taxpayer who files electronically (regardless of the number of retail locations).
   Out of State Retailer Voluntarily Collecting Use Tax. The discount allowed cannot
   exceed $10,000 for an out of state retailer who voluntarily registers to collect and
   remit use tax (i.e., a retailer who does not have either physical presence or economic
   nexus with South Carolina), regardless of the number of out of state locations.

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5. Q. When are sales and use tax returns and payments due?
A. Code Section 12-36-2570(A) provides that sales and use taxes are due and payable
monthly on or before the 20th day of the month following the month in which the tax
accrues, except as otherwise provided. For example, for sales that occur in June, the
monthly sales and use tax return and tax payment for June are due on July 20th.
While monthly filers are the majority of sales and use tax filers, Code Sections 12-36-2580
and 12-36-2590 provide that, upon Department approval, sales and use tax returns and
payments may be made at times other than monthly periods, such as quarterly or annually.

6. Q. When is a sales and use tax return considered timely?
   A. Paper Return. A paper return is considered to be timely filed if the return is mailed and
   has a postmark dated on or before the date the return is required by law to be filed. Code
   Section 12-36-2570(C).
   Electronic Return. An electronic return is considered to be timely filed if the return is
   transmitted by midnight the day the return is required by law to be filed.
   Code Section 12-60-50 provides that the due date of returns and payments is extended to
   the next business day when the due date falls on a Saturday, Sunday, or legal holiday. See
   SC Revenue Procedure Bulletin #02-2, “Return Due Date Falling on Saturday, Sunday,
   or Legal Holiday,” for a list of legal South Carolina holidays.
7. Q. When is a tax payment considered timely made?
   A. Check Payment. The provisions of Internal Revenue Code Section 7502 relating to timely
   mailing as timely filing and paying (i.e., the “mailbox rule” or “postmark date rule”) are
   applicable to payments of sales and use taxes. As such, when a payment is mailed on or
   before the due date and is actually delivered after that date, the date of the U.S. Postal
   Service postmark is deemed the delivery date and date of payment. Code Section 12-6050(B) and SC Revenue Ruling #13-1.
   Electronic Payment. Payment in immediately available funds by electronic means is
   timely if the initiation of the transfer of funds occurs on or before the due date of the tax.
   If settlement to the State’s account does not occur on or before the banking day following
   the due date of the tax, payment is deemed to occur on the date settlement occurs. See
   Code Section 12-54-250(A)(1) and (2).
   Note: Payments by check or electronic means that are declined due to insufficient funds
   are not timely.

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8. Q. What filing period(s) does the discount apply?
A. The discount is based on the State’s fiscal year July 1 through June 30; it is not based on
a calendar year. The filing periods in which the discount may be claimed is provided
below for taxpayers filing a sales and use tax return monthly, quarterly, or annually.
Monthly Return. The discount begins with the June monthly sales and use tax return that
is due July 20th, continues with the July monthly sales and use tax return that is due
August 20th and so on each subsequent month. The discount ends with the May return
that is due June 20th, or an earlier month if the maximum discount has been claimed.
Quarterly Return. The discount begins with the April, May, and June quarterly sales and
use tax return that is due July 20th, continues with the July, August, and September
quarterly sales and use tax return due October 20th and so on each subsequent quarter.
The discount period ends with the January, February, and March quarterly sales and use
tax return that is due April 20th, or an earlier quarter if the maximum discount has been
claimed.
Annual Return. The discount is based on the calendar year sales and use tax return that is
due January 20th.

9. Q. How is the timely filing discount calculated?
   A. The discount is calculated based on the total taxes (state and local) due with the return as
   follows:
   For returns showing a total tax due (state and local) of less than $100. The discount is
   3% of the total tax due.
   For returns showing a total tax due (state and local) of $100 or more. The discount is 2%
   of the total tax due.
10. Q. Is the discount amount claimed on a timely filed return recomputed on an amended
    return?
    A. The discount amount is not recomputed on an amended return that is filed after the due
    date of the original return. In such instance, the taxpayer filing the amended return is
    allowed the discount amount reported on the original return. If, however, an amended
    return is filed on or before the due date of the original return, then the discount amount is
    recomputed on the amended return.
    For example, Taxpayer X timely files his May sales and use tax return on June 15th (the
    due date of the return is June 20th.) The return reflects $1,000 sales and use tax due and a
    $20 discount (2% x $1,000). On July 1, X files an amended return to correctly reflect
    $10,000 sales and use tax due. The discount reported on the amended return remains

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$20 - the discount amount that was claimed on the timely filed original return. No
discount is allowed for the additional $9,000 in sales and use tax paid with the amended
return on July 1.
The answer would be different if X realized the error and filed the amended return on
June 20th (the due date of the return.) Assume X files an amended return on June 20th to
correctly reflect $10,000 sales and use tax due. The discount reported on the amended
return is $200 since the discount allowed under Code Section 12-36-2610 is based on the
taxes due and paid on a timely filed return.
Note: In no instance is the discount reduced or required to be repaid when filing an
amended return. For example, if X had filed an amended return on July 1 to reflect $100
sales tax due and a $2 discount ($100 x 2%), then the discount would remain $20. The
discount is not required to be reduced or repaid as a result of an amended return.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/W. Hartley Powell

W. Hartley Powell, Director

June 10
, 2021
Columbia, South Carolina

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