South Carolina State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in South Carolina, with full citations and the original source on every page.
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Was South Carolina documentary tax due when a grantor trust transferred real estate to partnerships owned in the same percentages by the trust's eight grantors and beneficiaries?
No. The transfer was not subject to documentary tax because the same eight grantors and beneficiaries were the only partners and each person's 12.5% interest in the real estate remained unchanged. The…
Could a planned two-building expansion of a South Carolina regional corporate headquarters qualify for a five-year property-tax exemption and an income-tax credit, including after a sale-leaseback?
Yes, conditionally. The two buildings could be treated as one headquarters expansion, the facilities could receive a five-year nonschool county property-tax exemption, and qualifying building and pers…
What operating, licensing, withholding, account, staffing, card, and gross-proceeds rules did South Carolina Revenue Ruling 89-23 apply under the Bingo Act of 1989?
The ruling limited a session to noon through midnight, required both licenses to be displayed, required 7% withholding on prizes of $500 or more, and allowed assessments against the promoter, nonprofi…
How did South Carolina sales and use tax apply when a flight school leased aircraft from owners, used them for instruction, rented them to customers, and bought aviation fuel and repair parts?
Lease payments to aircraft owners were not taxed when XYZ acquired the aircraft for rental and also used them for instruction, but the first instructional use triggered tax on fair market value. Quali…
Was the South Carolina minority-business income-tax credit applied separately to each eligible subsidiary in a consolidated return, or once to the consolidated group as a whole?
Separately to each eligible subsidiary. A subsidiary holding the state contract could claim up to the lesser of $25,000 annually or its allocated share of consolidated tax liability. Each subsidiary h…
Under South Carolina Revenue Ruling 89-22, were the initial and renewal charges for a loose-leaf subscription publication with periodic updates subject to sales or use tax?
Yes. The Commission treated the loose-leaf publication, its periodic replacement or additional pages, and the renewal materials as tangible personal property. Both the initial subscription price and r…
Under South Carolina Revenue Ruling 89-21, were charges for converting a customer's records into microfilm or microfiche taxable sales or nontaxable services?
They were taxable. The Commission concluded that microfilm and microfiche copies were tangible personal property, so charges for providing them were subject to sales or use tax unless an exemption or …
Under South Carolina's 1989 backup-withholding guidance, when did a payor have to withhold from reportable interest, dividends, and other reportable payments?
A payor had to withhold 4% from covered reportable payments when the payee failed to provide a taxpayer identification number, the Tax Commission identified an incorrect number or notified underreport…
Were a state commission's purchases of conservation tillage machines and drip-trickle irrigation installation equipment exempt when the commission owned the machines but assigned them to conservation districts for farmers' use?
Yes. The exemption turned on the equipment's use, not its ownership. The conservation tillage equipment planted crops, while the tractor-pulled drip-irrigation machines formed planting beds, installed…
Were an aluminum-can manufacturer's steel strapping and seals for scrap bales excluded from sales and use tax, and were reinforced screens inside paint-sprayer nozzles exempt machine parts?
Yes to both. The steel strapping and seals were packaging materials used to hold scrap-aluminum bundles sold to customers, so their purchase was excluded from tax under section 12-35-170. The reinforc…
Under South Carolina's permanent 1989 guidance, what did a payor have to withhold from proceeds paid to a nonresident seller of real estate and associated tangible personal property?
The payor generally had to withhold 7% of net proceeds paid to a nonresident seller, or 5% when the seller was a corporation or an association or trust taxed as one. The rule covered real-estate inter…
Did an interstate motor carrier create South Carolina corporate income-tax nexus by regularly hauling freight into and across the state without a South Carolina terminal?
Yes. The carrier's regular and continuous use of South Carolina highways to haul freight, together with its state Class F operating license, established substantial nexus. South Carolina could tax the…
Under South Carolina's emergency 1989 guidance, what did a buyer have to withhold from payments to a nonresident seller of real estate and associated tangible personal property?
The buyer generally had to withhold 7% of net proceeds paid to a nonresident seller, or 5% when the seller was a corporation. Tangible personal property was covered only when sold with a real-estate i…
After South Carolina's Bingo Act of 1989 eliminated Class A licenses, could an existing Class A licensee keep offering $6,000 to $30,000 in prizes, and when did the Act's new procedures begin?
Yes. A Class A license in effect on October 1, 1989 remained valid until expiration, and its holder could keep offering $6,000 to $30,000 in prizes during that period. But every promoter and nonprofit…
Under South Carolina's 1989 guidance, did a hotel owe sales and accommodations tax on separately billed local calls, long-distance calls, and pay-per-view movies?
Yes. Separately billed local calls, long-distance calls, and pay-per-view movies were components of the accommodation price and were subject to both sales and accommodations tax. Telephone service sol…
Who was liable for South Carolina use tax when an in-state contractor bought building materials from an out-of-state retailer?
The contractor was liable for the use tax. If the out-of-state retailer was required or authorized to collect South Carolina tax, either party could be assessed. A receipt from such a retailer showing…
Were equipment rentals made at a South Carolina military post exchange taxable when exchange employees operated the facility for a private contractor?
Yes. The rentals were taxable because the post exchange acted as XYZ's agent, while XYZ owned the equipment, contracted with each customer, received the proceeds, and remained the retailer.
Were direct-cost computer, software, and manufacturing-equipment purchases for ABC Authority's Navy RAMP program subject to South Carolina sales or use tax?
No. The ruling treated the supplier transactions as sales for resale and the transfer to the Navy as exempt because title to each direct-cost item passed to the federal government upon vendor delivery…
Did South Carolina's $300 sales-tax cap apply to the seller's bumper-pull and gooseneck horse and cattle trailers or semitrailers?
No. The ruling denied the $300 cap because the bumper-pull and gooseneck vehicles were not designed to be pulled exclusively by truck tractors.
How did South Carolina's former use tax apply when an out-of-state contractor brought new or previously used construction equipment into the state, and what counted as substantial prior use?
Equipment bought for first use in South Carolina owed the full former use tax, subject to an allowed other-state sales-tax credit. Previously used equipment generally owed prorated tax based on South …
Could a nonresident military automobile buyer's South Carolina Form ST-178 exemption certificate be dated before the sale, or did it have to be dated after the sale?
Yes. The ruling allowed Form ST-178 to be dated on the automobile sale date, during the 10 days before the sale, or during the 10 days after the sale.
Could a South Carolina retailer deduct an early-payment cash discount after reporting sales tax on the full price in the month of sale?
Yes. The retailer first had to report tax on the full sales price for the month in which the sale occurred. If the customer later paid within the discount period and actually took the allowed cash dis…
Could a South Carolina equipment lessor that failed to file rental-tax returns obtain refunds or audit credits for sales or use tax paid on equipment purchases more than three years earlier?
Refunds were denied because more than three years had passed. Credits could still reduce the lessor's audit liability if the old tax payments were documented. A sales-tax credit required an assignment…
Were entrance charges to antique, craft, boat, home, gun, car, recreational-vehicle, sportsman, and similar shows open to the public subject to South Carolina admissions tax?
Yes. When these shows were open to the public and charged people to enter, they were places of amusement under the former statute. The admissions were taxable even though the shows also featured retai…
After a parent sold all stock of its South Carolina subsidiary on August 31, 1988 and later made an IRC section 338(h)(10) election, when was the subsidiary's South Carolina return due and how were penalties, interest, and estimated tax handled?
The South Carolina return was due November 15, 1988 whether or not the section 338(h)(10) election was made. An extension could match the federal period, but the tentative state return ordinarily was …
Were separate computer hardware and software maintenance fees subject to South Carolina use tax under PLR 89-6?
The hardware maintenance fee was not taxable because it was a separately purchased service and was not part of the equipment lease. The software support fee was taxable because the software was delive…
Was electricity purchased by Charleston Air Force Base for on-base family housing and a trailer park exempt as electricity used for residential purposes?
Yes. Electricity used in the base's family housing and trailer park qualified for the former residential-purpose exemption because those spaces were intended as places for people to live, even though …
Were concrete, steel, and other materials used by a manufacturer to build a wastewater settling basin exempt under South Carolina's manufacturing-machine exemption?
Yes. The settling basin was an integral part of a wastewater treatment facility that operated as one pollution-control machine. Concrete, steel, and other materials the manufacturer used to construct …
Did South Carolina's six-year tax-assessment period for a 25% omission apply retroactively to returns due before its September 1, 1985 effective date?
No. The ruling concluded that section 12-54-80(2)'s six-year assessment period applied only to returns due after September 1, 1985. Returns due before that effective date remained subject to the limit…
What does SC Private Letter Ruling #89-5 conclude about a long-term capital-gains refund and estimated income tax?
One-half of the refundable credit for 1987 capital gains could be used when calculating the taxpayer's 1989 estimated South Carolina income tax. That half was taken on line 7 of the 1989 estimated-tax…
Was a 1987 IRA withdrawal fully taxable in South Carolina when another state had denied deductions for the original contributions?
Yes. South Carolina included the full IRA withdrawal because it was fully taxable on the taxpayer's federal return and the state's historical statutes provided no IRA-specific modification. The fact t…
What happened under SC PLR 89-3 when a fruit-juice seller had not registered its product for the historical soft-drink tax exemption?
ABC was not liable because it was neither required to be licensed as a South Carolina distributor nor the first in-state recipient. If ABC voluntarily registered the juice and the Commission approved …
For South Carolina's former six-year assessment rule, did the 25% omission test include wholesale sales, exempt retail sales, or only taxable retail sales?
The test included total retail sales before deductions for exempt retail sales, but excluded wholesale sales when retail and wholesale books were kept separately. Without separate records, all sales w…
Who owed South Carolina's historical soft-drink license tax when an out-of-state distributor supplied in-state retailers?
The first person receiving or manufacturing the soft drinks in South Carolina owed the historical tax. Under the stated facts, that placed liability on the in-state retailer receiving products from th…
Which affiliated company could count jobs created for a transferred production line under South Carolina Private Letter Ruling 89-1?
XYZ could include the new full-time jobs in its historical new-job tax-credit calculation. Although the jobs supported ABC's production line, XYZ hired and controlled the workers and treated them as i…
How did South Carolina calculate the five-year county property-tax exemption for additions costing at least $50,000 to an existing manufacturing establishment?
For 1987 additions valued in the 1988 property-tax year and later additions, the exemption equaled the increase in the total real-property-improvement appraisal caused by the qualifying addition—not a…
Were aircraft engines and parts taxable when installed in South Carolina but delivered by the seller with the aircraft to the buyer in North Carolina?
No. ABC installed the engines and parts in South Carolina but retained control of them and delivered the aircraft to the buyer in Charlotte, North Carolina. Because transfer did not occur in South Car…
Were prosthetic devices sold by an out-of-state supplier to South Carolina hospitals, clinics, and doctors exempt as devices sold by prescription?
No exemption applied. Hospitals, clinics, and doctors were consumers of prosthetic devices used in providing medical services. The historical exemption for devices sold by prescription applied only wh…
Were catalogs printed and mailed from South Carolina taxable when sent to the out-of-state retailer's customers inside and outside South Carolina?
Catalogs mailed to South Carolina residents were taxable; catalogs mailed to residents of other states were exempt under the out-of-state delivery rule. For the taxable South Carolina copies, gross pr…
Were plastic bags, corrugated cartons, and fiber drums supplied to medical-waste customers exempt as containers used to deliver tangible personal property?
No exemption applied. ABC was the end user of the bags, cartons, and drums in its waste-disposal service. The container exemption covered packaging used incident to the sale and delivery of tangible p…
Were amusement tickets given in exchange for advertising or other promotions subject to South Carolina's admissions tax?
Yes. RR 88-11 held that amusement tickets exchanged for radio or television advertising or other promotional services are 'paid admissions' subject to the 4% admissions tax under § 12-21-2420, because…
Did a pharmaceutical company's South Carolina representatives stay within Public Law 86-272's protection for soliciting orders?
No. The combined activities exceeded protected solicitation: representatives effectively accepted promotional orders and issued rebates, broker managers supervised independent brokers, and national-ac…
Were a volunteer Coast Guard-related auxiliary and its separate nonprofit National Board exempt from South Carolina sales and use tax?
No. The volunteer civilian auxiliary was not a federal instrumentality, so its sales and purchases were taxable. Its separate National Board also was taxable because South Carolina gave charitable and…
Did corporations filing a South Carolina consolidated return have to compute each company's South Carolina net income separately?
Yes. Following Emerson Electric Co. v. Wasson, RR 88-10 required each corporation in a South Carolina consolidated return to compute its own South Carolina net income using its own apportionment ratio…
Could affiliated corporations elect a South Carolina consolidated return, defer gain on an intercompany asset sale, and use one group apportionment formula?
The affiliated companies could elect a consolidated return if they met the control and filing requirements, but South Carolina recognized gain on the intercompany asset sale because it had not adopted…
Did a West Virginia resident owe South Carolina sales tax on a car bought from a South Carolina dealer, and could the buyer claim a refund of tax paid?
No South Carolina sales tax was due because West Virginia did not impose sales tax on motor-vehicle sales; its separate 5% title privilege tax did not count. The buyer could not claim the refund direc…
Did an out-of-state clearinghouse that routed telephone billing records and payments owe South Carolina tax on communications charges?
No. XYZ did not furnish communications in South Carolina and therefore was not liable under section 12-35-1150. South Carolina retailers that actually provided communication services owed the tax, exc…
Were documentary stamps required when a bank transferred trust-account real estate without consideration from its trust division to a newly separate trust company?
No. The deeds were part of a corporate realignment, not a sale of real estate. The transfer changed the trustee holding legal title, involved no consideration, and left beneficial ownership with the i…
Were museum admission fees exempt from South Carolina admissions tax because the museum was housed in a building listed on the National Register of Historic Places?
No exemption applied. The museum's admission fees were taxable because visitors paid to enter the museum, not for the purpose of viewing the National Register building that housed it. A historic-build…
Did a South Carolina resident owe state income tax on operating-income distributions from a Tennessee S corporation, and could she deduct interest paid to buy the stock?
Generally no on the operating income, and no on the interest deduction. The Tennessee S corporation's income was not taxable in South Carolina except for listed categories such as salary, dividends, i…
Were hotel charges to federal employees taxable when the employee paid personally and was later reimbursed by the government?
It depended on who paid. RR 88-8 held that when a federal employee is billed directly and pays personally (check or credit card) and is later reimbursed, the sale is to the employee and the 7% accommo…
As a coin-operated laundromat, which of my charges are taxable — the wash-and-fold service, vending-machine sales, and cleaning supplies sold by attendants?
It depends on the charge. In Revenue Ruling 88-7 the South Carolina Tax Commission held that (1) 'wash and fold' laundering service is a taxable service under § 12-35-1130(A) — the 1986 phase-out only…
For a South Carolina corporate license-fee report, was capital measured on the first day of the filing year or the first day of the prior year?
The filing year. For ABC's report due March 15, 1988, the license fee was based on capital stock and paid-in surplus shown on January 1, 1988, not January 1, 1987. The Commission treated the fee as pr…
Is a deed conveying standing timber subject to South Carolina's documentary (deed-recording) tax, even when the price is set per board foot or cord cut rather than by the acre?
Yes. In Revenue Ruling 88-6 the South Carolina Tax Commission held that a timber deed conveying standing timber that the buyer will cut is subject to the documentary tax under § 12-21-380, no matter h…
As a manufacturer, do I have to include all capitalized costs — like installation, not just the machine's price — on my South Carolina property tax return?
Yes — all of them. In Revenue Ruling 88-5 the South Carolina Tax Commission held that under § 12-37-930 a manufacturer must include on its property tax return every capitalized cost associated with it…
If I moved into South Carolina partway through the year, can I deduct my full moving expenses on my South Carolina return, or must I prorate them?
You may allocate the full deduction to South Carolina. In Revenue Ruling 88-4 the South Carolina Tax Commission held that a part-year resident who moves INTO the state may allocate — not apportion — t…
In a pre-need funeral (burial) contract where money is held in trust, who owes income tax on the interest the account earns — the customer or the trust?
The customer. In Revenue Ruling 88-3 the South Carolina Tax Commission held that where a pre-need burial (funeral) contract holds the customer's money in a revocable trust, the customer — as the grant…
Could a part-year resident moving into South Carolina allocate the full allowable moving-expense deduction to South Carolina instead of apportioning it?
Yes. A part-year resident moving into South Carolina could allocate the full allowable moving-expense itemized deduction to South Carolina to match the related reimbursement included in South Carolina…
Who had to report the annual income earned in a revocable pre-need funeral trust: the funeral-home trustee or the customer and beneficiary?
The customer. Because each customer could revoke the pre-need contract and recover the account balance and accruals, the customer was treated as the trust owner for income-tax purposes and had to incl…
Was fuel used in tugboats exempt from South Carolina sales and use tax when the tugs moved ships, barges, and cargo or assisted ships in Charleston Harbor?
Fuel was exempt when XYZ's tugs generated motive power to transport ships, barges, or cargo. Fuel used only to assist ships in Charleston Harbor was taxable because the ruling did not treat that harbo…
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These are official tax letter rulings and advisory opinions issued by South Carolina's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.