South Carolina imposes a statewide sales tax on goods and certain services to fund government operations. The standard rate is 6%, though some counties add a local tax. While most retail sales are taxed, the state has established exemptions for certain items, transactions, and organizations.
Common Sales Tax Exemptions for Individuals
Many everyday purchases are exempt from South Carolina’s sales tax. The main category is unprepared food items, or groceries, which are exempt from the 6% state tax but may be subject to local taxes. This does not apply to prepared meals, hot foods, soft drinks, or candy, which are fully taxable.
Prescription medications prescribed by a licensed physician and dispensed by a pharmacist are exempt. Certain over-the-counter drugs can also be exempt if a doctor prescribes them. Prosthetic devices are also exempt. The exemption for durable medical equipment, such as hospital beds or oxygen equipment, requires that the items be paid for with Medicare or Medicaid funds through a licensed South Carolina provider.1Justia. South Carolina Code Section 12-36-2120 – Exemptions From Sales Tax
Sales Tax Exemptions for Businesses
Businesses benefit from sales tax exemptions designed to prevent tax pyramiding, the layering of tax at multiple stages of production. A common exemption is for items purchased for resale. A retail store does not pay sales tax on inventory from a wholesaler because the tax is collected from the final consumer.
The manufacturing and agricultural sectors also receive exemptions. Raw materials that become part of a final product are exempt. Machinery used in manufacturing, along with repair parts and fuel, are also not taxed. For agricultural producers, items like fertilizers, seeds, farm machinery, and livestock feed are exempt.
Exemptions for Non-Profit and Government Organizations
Certain organizations are exempt from paying sales tax on their purchases. Federal, state, and local government agencies can purchase goods and services tax-free for official use.
The sales tax exemption for qualifying non-profits applies to the sale of goods when proceeds are used for charitable purposes and does not provide a general exemption for all items purchased by the organization. However, some purchase exemptions exist, such as for food bought to be given to the needy. These entities must provide proper documentation to the seller to claim their exempt status.
Taxability of Services in South Carolina
South Carolina’s sales tax focuses on tangible personal property, so most services are not taxed. Professional services from doctors, lawyers, or accountants are not taxed. Labor for repairs is also not taxable if stated separately from the cost of parts.2Legal Information Institute. S.C. Code Regs. § 117-306 – Repairs
However, the state has enumerated certain taxable services. These include accommodations for transients, like hotel rooms, which are taxed at a 7% state rate.3Justia. South Carolina Code Section 12-36-920 – Tax on Accommodations for Transients Other taxable services include admissions to places of amusement, dry cleaning and laundering services, and certain communication services.
Obtaining and Using Sales Tax Exemption Certificates
To purchase items tax-free, an exempt individual or organization must provide the seller with a valid exemption certificate. The South Carolina Department of Revenue (SCDOR) provides these forms on its website, which serve as proof that the purchase qualifies and protect the seller during an audit.
Common forms include the ST-8A Resale Certificate for inventory and the ST-8 Exemption Certificate for other exemptions. Farmers must present a South Carolina Agricultural Tax Exemption (SCATE) card from the SC Department of Agriculture. To complete a form, the buyer must provide:
- The buyer’s name and address
- The seller’s name and address
- The buyer’s South Carolina retail license or exemption number
- A description of the property being purchased
- The specific legal reason for the exemption
The completed certificate must be given to the seller at the time of purchase, and the seller must keep it on file.
South Carolina’s Annual Sales Tax Holiday
South Carolina offers an annual sales tax holiday on a range of back-to-school items. This 72-hour event begins on the first Friday in August and runs through the following Sunday. During this period, state and local sales taxes are waived on eligible purchases.
Qualifying items include clothing, footwear, and school supplies. Computers, printers, and certain bed and bath linens are also included, with no price limit. Items such as jewelry, cosmetics, smartphones, and furniture are not exempt. Shoppers should check the SCDOR website each year for the exact dates and a list of qualifying items.