Guide to South Carolina Sales Tax Changes 2012
- Sep 5, 2012 | Will Frei
Data Center Exemptions
South Carolina has created new exemptions for computers, computer equipment and electricity for data centers investing at least $50 million in the state over a five-year time period (HB 3720, Section 7).
Injectable Medication Exemptions
The state is phasing in sales tax exemptions for injectable medications and injectable biologics, provided the medication or biologic ". . . is administered by or pursuant to the supervision of a physician in an office which is under the supervision of a physician, or in a Center for Medicare or Medicaid Services certified kidney dialysis facility" (HB 3747).
Biologics refers to products that are used for the prevention or treatment of a human disease or condition and that are produced from living organisms.
This exemption depends on the annual general fund growth as determined by the Board of Economic Advisors (BEA). If the BEA forecasts an annual general fund revenue of at least 2%, beginning with February 15, 2013, the exemption will be phased in as follows:
- Phase-in 1: For sales made on or after July 1st of the first State fiscal year (July 1 through June 30) following a February 15th forecast meeting the 2% growth requirement, 50% of the gross proceeds of sales are exempt.
- Phase-in 2: For sales made on or after July 1st of the next State fiscal year (July 1 through June 30) following the next February 15th forecast meeting the 2% growth requirement, 100% of the gross proceeds of sales are exempt.
Durable Medical Equipment
During the South Carolina 2011-2012 legislative session, legislators passed a law that phases out state sales and use tax on durable medical equipment and supplies that meet certain conditions (SB 36).
- Sales occurring from July 1, 2012 to June 30, 2012 were still taxed at 3.5% plus applicable local sales and use tax.
- Sales occurring from July 1, 2012 to December 31, 2012 will be taxed at 1.75% plus applicable local sales and use tax.
- Sales occurring on or after January 1, 2013 will not be subject to any state or local sales and use tax.
To qualify for the exemption the equipment must meet the following conditions:
- The purchase must be paid directly by funds of South Carolina or the United States under the Medicaid or Medicare programs;
- State or federal law or regulation authorizing the payment must prohibit the payment of the sales or use tax; and
- The durable medical equipment and related supplies must be sold by a provider who holds a South Carolina retail sales license and whose principal place of business is located in South Carolina.