South Carolina considers new sales tax holidays for 2026

South Carolina has held an annual sales tax holiday for select products since 2000. Several new sales tax holidays have been proposed for 2026: a small business sales tax holiday, an annual disaster preparedness sales tax holiday, and a longer annual tax holiday.

Key takeaways

• The South Carolina Legislature may create a small business sales tax holiday. The tax-free period would last for one month, and qualifying small businesses would get to select which month they would offer it.
• South Carolina could establish a disaster preparedness sales tax holiday to be held each spring starting in 2026.
• South Carolina’s annual sales tax holiday is currently held during one weekend in August. It could be extended to the entire month of August.

What is a sales tax holiday?

A sales tax holiday is a period when products or services ordinarily subject to sales tax are temporarily exempt.

Tax-free periods can last for a day, a weekend, a week, or even longer. They can apply to all products and applicable sales taxes (i.e., state and local taxes), or only to certain products and state or local sales taxes. Most states place price caps on qualifying products.

About 20 states currently plan to hold one or more sales tax holidays in 2026.

South Carolina small business sales tax holiday

South Carolina House Bill 4619 exempts from sales and use tax “sales made at a small business located in this State during one month each year of the small business’s choosing.” Interestingly, any month will do so long as the small business lets the South Carolina Department of Revenue know by October 1 of the previous year which month it has chosen. This sales tax holiday would not apply to remote sellers.

To qualify to participate in the small business tax holiday, a business must be considered a “small business” by the U.S. Small Business Administration (SBA) and the North American Industry Classification System (NAICS). Per the SBA, “Most manufacturing companies with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million, will qualify as a small business.” The SBA matches small business size standards to NAICS codes.

As the act would take effect upon approval by the governor, it’s unclear whether any business would be able to offer a small business sales tax holiday in 2026 if the bill is enacted. Small businesses could be required to wait until 2027, so they can share the necessary information with the Department of Revenue by October 1, 2026.

South Carolina disaster preparedness tax holiday

House Bill 4817 seeks to establish an annual disaster preparedness sales tax holiday. In 2026, the tax-free weekend would be held from 12:01 a.m. Friday, May 2, through 11:59 p.m. Sunday, May 4. For 2027 and subsequent years, the tax holiday would take place the last full weekend in April, from 12:01 a.m. Friday until 11:59 p.m. the immediately following Sunday.

The emergency supply items listed here would be exempt from South Carolina sales tax during the disaster preparedness sales tax holiday, provided the retail sales price per item is $60 or less. Items normally sold in pairs or packages may not be separated to qualify for the temporary exemption.

• AAA-cell, AA-cell, C-cell, D-cell, 6-volt, or 9-volt batteries (except coin batteries, automobile batteries, and boat batteries)
• Cellular phone batteries or cellular phone chargers
• Duct tape
• Fire extinguishers, smoke detectors, or carbon monoxide detectors
• Gas or diesel fuel tanks or containers that can hold five gallons or less
• Ground anchor systems including, but not limited to, bungee cords, rope, or tie-down kits
• Nonelectric food storage coolers or water storage containers; artificial ice, blue ice, ice packs, or reusable ice
• Nonelectric can openers
• Portable self-powered light sources, including battery-powered flashlights, lanterns, or emergency glow sticks
• Portable self-powered or battery-powered radios, two-way radios, weather band radios, or NOAA weather radios
• Plywood, window film, or other materials specifically designed to protect window openings
• Self-contained first-aid kits
• Tarpaulins, plastic sheeting, plastic drop cloths, or other flexible, waterproof sheeting

The first $1,000 of the sales price of portable generators and power cords would also be exempt.

If enacted, the disaster preparedness sales tax holiday would apply to state and applicable local sales taxes.

South Carolina monthlong sales tax holiday

Senate Bill 728 would extend the current South Carolina tax-free weekend to the entire month of August. The tax-free period would commence on August 1 at 12:01 a.m. each year and conclude at midnight on August 31.

Nothing else about the annual sales tax holiday would change.

Potential impact on retailers and sellers

The three proposed sales tax holidays would impact retailers and sellers in different ways.

The small business sales tax holiday could potentially stimulate sales for qualifying businesses. However, it would also require those businesses to account for the tax holiday in their point-of-sale (POS) and ecommerce systems. This would likely increase compliance costs, which could offset any gains.

The disaster preparedness tax holiday would require businesses that sell eligible goods to update their sales systems so that they don’t apply sales tax to qualifying goods. While this could increase costs, businesses may also experience an increase in sales of qualifying goods.

Extending the annual South Carolina tax-free weekend to one month may not pose too much of a compliance burden for businesses that already have systems in place to exempt qualifying transactions for a weekend. And these businesses could see a bump in sales during the entire month of August, at least for qualifying goods.

What businesses should do now

Businesses would be wise to pay attention to the bills described above, and to generally monitor the South Carolina Legislature until it adjourns on May 7, 2026. If any of the above bills become law, retailers may need to act fast.

In the meantime, now is a good time to assess how nimble your sales tax compliance systems are. If you were required to quickly turn sales tax on or off for particular products, could you do so?

Automated, AI-powered sales and use tax software helps businesses of all sizes streamline tax compliance in all states. Learn how automating sales tax with Avalara could help your business cut compliance costs and increase efficiency.

South Carolina sales tax holidays FAQ

Is South Carolina planning a monthlong sales tax holiday?

Possibly. One bill making its way through the South Carolina Legislature would turn the state’s annual sales tax holiday weekend into an annual sales tax holiday month. Another bill would establish a monthlong sales tax holiday for small businesses.

How would a monthlong sales tax holiday differ from South Carolina’s current tax-free weekend?

It depends. S 728 would stretch the current tax-free weekend into a month but change nothing else. H 4619 would create a whole new monthlong sales tax holiday for small businesses.

What items would be exempt during a monthlong sales tax holiday?

Under S 728, clothing, footwear, computers, printers, printer supplies, school supplies, and certain bedding would be temporarily exempt. The proposed small business sales tax holiday would presumably exempt any items sold by qualifying retailers.

Has South Carolina considered extended sales tax holidays before?

Yes. In early 2025, several lawmakers sponsored a bill that would provide a sales tax exemption for ammunition, handguns, rifles, and shotguns during the month of July 2025. It didn’t pass.

Are the proposed sales tax holidays statewide?

Yes. If any of the proposed sales tax holidays are enacted, they would apply to all eligible transactions sold by qualifying businesses in the state of South Carolina. All but the small business tax holiday would affect registered remote retailers as well.