South Carolina Sales Tax: Common and Unusual Exemptions
- Jul 25, 2016 | Bethany McDonald
South Carolina is home to idyllic beaches, historic cities and battlefields, and southern cuisine. The Palmetto State is also home to many aerospace and aviation, automotive, biotechnology, transportation, and recycling businesses.
South Carolina officials are also determined to grow its economy via a pro-business environment, including low corporate tax rates, competitive wages, and corporate tax credits, as well as no state property, inventory, or local income taxes. In addition to enjoying these tax policies, businesses can boost profits by taking advantage of common and unusual tax exemptions.
South Carolina imposes a state-wide 6 percent tax on the sale of most tangible items, with some counties and cities, like Charleston, imposing an additional 1 percent local sales tax if approved by voters. However, the state offers exemptions on a range of goods and services, as well as for certain organizations and types of sales.
Common tax-exempt goods include unprepared food and health care items. Wholesale goods meant for resale are also exempt from sales tax. Certain groups, such as government agencies and school districts, also benefit from sales tax exemptions when purchasing or selling certain items. As mentioned, the state is dedicated to fostering economic growth by not imposing sales tax on the sales of manufacturing equipment, industrial power, and certain agricultural materials.
While South Carolina imposes sales tax on clothing, footwear, and other items, it offers citizens a chance to purchase basic items tax-free during its annual sales tax holiday on the first weekend in August. Applicable items include, but are not limited to, clothing, footwear, accessories, school supplies, bedding and linens, and computers and software.
If you’re an ecommerce business that doesn’t maintain nexus in South Carolina, you don’t need to collect sales tax from South Carolina customers; rather, it is the responsibility of the customer to remit sales taxes for out-of-state purchases. But even if you don’t have nexus in the Palmetto State, you are required to register your business.
There are several interesting sales-tax exemptions in South Carolina. For example, lottery tickets, zoo plants and animals, and movies sold or rented to theaters are all exempt from sales tax. Check out the following list to see if your business can take advantage of a few more odd, but legitimate, exemptions:
- Sweetgrass baskets: Sweetgrass baskets made by South Carolina artists using locally grown sweetgrass are exempt from sales tax. Once used to collect and store vegetables and other staples, sweetgrass baskets are now made as a form of art by local artisans.
- Alternative energy: Sales tax is exempt from any device, equipment, or machinery that is operated by hydrogen fuel cells, used to generate hydrogen, or used in the manufacture or research of hydrogen fuel cell technology.
- Missile-making materials: Materials necessary to assemble missiles are exempt from sales tax.
- Motion picture supplies and equipment: The sale of supplies, equipment, and machinery for the use in filming and producing motion pictures is tax-free.
- War memorials: The sale of war memorials and monuments is tax-free.
Do you have other questions regarding South Carolina sales tax exemptions? Check out our Guide to South Carolina Sales Tax.