Dash of SALT

South Carolina State Tax Updates

Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for South Carolina.

September 27, 2023

South Carolina Court of Appeals Involving Produce Facility Operator’s Purchases

Authored by: Bonnie Susmano, JD, MBA and Katerine Velasquez

The South Carolina Department of Revenue (DOR) announced the State Sales, Use, and Maximum Tax Return, Form ST-455, must be filed and paid electronically through the Department’s MyDORWAY portal effective December 1, 2023. Taxpayers required to file Form ST-455 will be required to create an account on the Department’s MyDORWAY portal if they do not already have an account. To create an account, taxpayers must have a federal employer identification number or social security number, license number, a department-issued ID (which can be found on all correspondence a taxpayer has received from the Department), or a copy of their last return. Additional instructions on how to create a MyDORWAY account, including an instructional video, are on the Department’s MyDORWAY portal.

If you have questions about sales and use tax compliance, please reach out to a member of the Withum SALT Team.

August 11, 2023

South Carolina Court of Appeals Involving Produce Facility Operator’s Purchases

On August 8, 2023, the South Carolina Administrative Law Court issued its opinion in Tractor Supply Company v. South Carolina Department of Revenue. At issue was Tractor Supply Company’s (“TSC”) separate filing position. For the tax years at issue, TSC filed on a separate company basis. Upon audit, the Department determined that transactions between the taxpayer and its out-of-state affiliates were distortive. Specifically, the Department determined that a 9.7% profit rate on expenses paid by the taxpayer to affiliates was not at arm’s length. As such, the Department exercised its ability to force TSC to file on a unitary basis, thus eliminating the distortion caused by intercompany transactions and resulting in a $1.4M tax deficiency. The ALJ upheld the Department’s determination that TSC should be forced to file a unitary return.

If you have questions about how transfer pricing issues affect your business, please reach out to a member of the Withum SALT Team.

March 10, 2023

South Carolina Court of Appeals Involving Produce Facility Operator’s Purchases

Authored by: Brandon Vance and George Gonzales, MST

On March 1, 2023, the South Carolina Court of Appeals overturned The Administrative Law Court’s holding in McEntire Produce, Inc. v. Dep’t of Revenue, which granted a partial sales and use tax exemption on protective clothing and supplies. McEntire Produce previously claimed a partial exemption for supplies and protective clothing used in their business operations, and the Administrative Law Court sustained the taxpayer’s claim. Subsequently, the Court of Appeals overturned the Administrative Court’s decision holding that the partial exemption for machinery and equipment did not apply to the taxpayer’s purchases as the items purchased were not machines nor were they integrated into the taxpayer’s facilities.As such, the taxpayer is subject to tax on its purchases pursuant to the Court of Appeals’ determination.

If you have questions about whether your business is required to pay sales tax on its purchases, please reach out to a member of the Withum SALT Team.

February 24, 2023

ATVs and UTVs Are to the Same Motor Vehicle Sale Tax Exemption as Cars and Motorcycles in South Carolina

Authored by: Brandon Spinella and Courtney Easterday, MS

The South Carolina Department of Revenue (DOR) appealed a ruling that retail sales of all-terrain vehicles (ATVs) and side-by-side vehicles or utility task vehicles (UTVs) purchases are entitled to the same sales tax exemption granted to registered motor vehicles (e.g., cars and motorcycles). The DOR argued that The Administration Law Court’s (ALC) ruling was erroneous because (1) ATVs and UTVs are not “motor vehicles” and (2) the Court failed to give the DOR proper deference in administration of the tax code. Ultimately, the Court of Appeals found tax code does not define “motor vehicle,” nor does S.C. Code Ann. § 12-36-2110(A) restrict the sales tax exemption to only motor vehicles used on highways. As such, Court of Appeals found the ALC’s use of the dictionary definition of a motor vehicle was proper. Accordingly, South Carolina’s Court of Appeals upheld the ALC’s ruling that ATVs and UTVs are entitled to the State’s sales tax exemption for motor vehicles.

If you have any questions about whether your business is required to collect and remit Sales and Use Tax, please reach out to a member of the Withum SALT Team.

November 4, 2022

South Carolina Sales Tax Implications – Retailer Imposed Fees

Authored by: Breea Boylan, MSA and Katie Szymanski, CPA

The South Carolina Department of Revenue has issued Revenue Ruling 22-10 regarding fees retailers are adding to invoices. These fees are often referred to as credit card fees, inflation fees, convenience fees, non-cash adjustment fees, or similar terms. The Department determined that these separately stated fees are includable in “gross proceeds of sales” or “sales price.” As such, these fees are subject to the sales and use tax if the underlying transaction is taxable. If you have questions about whether your business is required to collect sales tax on additional fees added to an invoice, please contact a member of the Withum SALT Team.

December 30, 2021

South Carolina Extends Tax Relief for Temporary Work-at-Home Employees Due to COVID-19

On December 21, 2021, the South Carolina Department of Revenue released the South Carolina Information Letter No. 21-31, extending the tax relief regarding withholding and nexus for temporary work-at-home employees due to the COVID-19 pandemic. This temporary relief pertains to a business’ establishment of nexus for income and sales tax purposes, solely because an employee is temporarily working in a different work location due to COVID-19 and provides guidance with respect to employer withholding requirements. This relief was originally extended to December 31, 2021 and has now been extended through March 31, 2022.

September 2, 2021

South Carolina Extends Covid Nexus and Withholding Relief for Employers to December 31, 2021

The South Carolina tax authority issued guidance on August 25, 2021 extending relief from income and sales tax nexus requirements and wage withholding requirements initially granted in through December 31, 2021 for a business with an employee temporarily working in a different location solely due to Covid-19. As such, employees working temporarily from South Carolina due to COVID do not by themselves create a South Carolina Income Tax, Sales Tax, or Wage Withholding Tax obligation. South Carolina’s original emergency order related to tax nexus, Information Letter #20-11, was initially issued May 15, 2020 and was originally intended to be effective from March 13, 2020 through September 30, 2020. Since issued, this emergency order has been periodically extended – and has now extended through the end of 2021. Many remote work arrangements that were intended to be temporary at the outset have now become permanent. If an employee’s circumstances change such that are no longer temporary, the tax relief no longer applies.

March 23, 2021

South Carolina Update on Extension of Filing Deadline

The South Carolina Department of Revenue (DOR) has announced that it will follow the deadline change made by the IRS for individual income tax returns, extending the due date for state individual income tax returns to May 17, 2021. The deadline extension is automatic, and taxpayers do not need to file any additional forms or call the DOR to qualify. The DOR is awaiting further guidance from the IRS and will wait to issue an information letter addressing the IRS decision and other topics. The change in the IRS deadline only affects individual income tax returns and does not affect estimated tax payments, which are still due April 15, 2021. ( Special Announcement: Individual Income Tax Due Date Extended to May 17, 2021, S.C. Dept. of Revenue, 03/18/2021. )

March 2020

SCDOR Extends Tax Returns and Payment Deadlines

The South Carolina Department of Revenue (SCDOR) is offering more time to file returns and pay taxes due April 1, 2020–June 1, 2020, to assist taxpayers during the COVID-19 outbreak. Tax returns and payments due April 1–June 1 will now be due June 1, 2020. Penalty and interest will not be charged if payment is made by June 1. This includes South Carolina Individual Income Taxes, Corporate Income Taxes, Sales and Use Tax, Admissions Tax, and other taxes filed and paid with the SCDOR. The SCDOR is automatically applying this tax relief for all applicable returns and payments – you don’t need to take any additional action.
The SCDOR encourages taxpayers to:

  • Use the SCDOR’s available online services. Visit MyDORWAY, the free online tax system, at MyDORWAY.dor.sc.gov to securely manage your South Carolina taxes from a smartphone or computer.
  • Help protect the spread of COVID-19 by calling or emailing the SCDOR instead of visiting in person. Find the phone number or email address needed at dor.sc.gov/contact.
  • Consider filing your Individual Income Taxes electronically, which is safer and faster. Visit dor.sc.gov/iit-filing to learn more. After filing, check your refund status online at dor.sc.gov/refund.

Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.

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The State and Local Tax (SALT) laws vary from state to state and are constantly changing. Reach out to Withum’s SALT Team for guidance on how to navigate your state’s local tax laws.