Could a South Carolina city or county levy a local sales tax under the laws reviewed in 2009?

Plain-English summary

A senator asked whether South Carolina cities or counties could levy sales taxes. The Attorney General reported in 2009 that it found no general municipal sales-tax authority. It did identify several county sales and use tax options in Title 4. Those statutes covered property-tax relief, specified capital projects, replacement revenue for property-tax exemptions, school or county tax credits, and transportation facilities.

The county options were not a general power to impose any desired tax. Each had its own authorization, purpose, rate or time limits, and referendum requirements. The opinion cautioned that a county using a local-option tax had to follow the relevant statute's conditions.

Currency note

This opinion was issued in 2009. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the AG find a general municipal sales tax power?
A: No. The office said its research found no provision then allowing municipalities generally to levy a sales tax.

Q: Could counties impose sales and use taxes?
A: Yes, under specified statutes. The opinion listed county options for property-tax credits, projects, and transportation, among others, with distinct limits.

Q: Was voter approval required for the county taxes described? A: The letter identified referendum approval for each of the county tax routes it discussed.

Background and statutory framework

The opinion surveyed county taxing provisions in chapters 10 and 37 of Title 4. It described taxes tied to property-tax relief, capital projects, and transportation and contrasted those express county authorizations with the absence of a general municipal provision in its research.

Citations and references

Examples of county authorizations: S.C. Code Ann. § 4-10-30; § 4-10-310; § 4-37-30, all discussed in the opinion.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/april-9-2009/
• Original PDF: https://www.scag.gov/wp-content/uploads/2011/03/elliott-d-os-8742-4-9-09-can-local-government-levy-a-sales-tax.pdf

Original opinion text

HENRY M CMAST ER
A'rrORNEY G BNERAL

April 9, 2009

The Honorable Dick Elliott
Member, South Carolina Senate
Post Office Box 142
Columbia, South Carolina 29202
Dear Senator Elliott:
We understand you desire advice from this Office as to whether any "local government, city or county, under the existing South Carolina Code can levy a sales tax." Law/Analysis

In our research, we did not discover any provision of South Carolina law allowing municipalities to levy a sales tax. However, several provisions in chapter 10 of title 4 of the South Carolina Code (Supp. 2008) allow counties to impose local opinion sales taxes. Sections 4-10-10 et seq. of the South Carolina Code (Supp. 2008) allows counties to impose a sales and use tax ofone percent, the proceeds of which are used to allow for a credit against county and municipal property taxes. To impose the tax, the county' s governing body must gain approval of a majority of the electors in the county who vote in the referendum. S.C. Code Ann. § 4-10-30. The proceeds from the sales tax are divided according to section 4-10-40 ofthe South Carolina Code between the county and the municipalities located within the county. Sections 4-10-300 et seq. of the South Carolina Code (Supp. 2008) allows counties to levy a one percent sales and use tax by ordinance upon approval ofthe electorate by referendum to fund the cost of constructing certain specified capital projects. The proceeds from the tax can only be used to service the debt on bonds issued to pay for the authorized projects and the tax is imposed for a limited amount oftime. S.C. Code Ann.§ 4-10-310. Sections 4-10-510 et seq. ofthe South Carolina Code (Supp. 2008) allows counties to exempt certain personal property from property taxation and to replace the revenue lost by such an exemption with a sales and use tax. The sales and use tax can range from one tenth of one percent to two percent. S.C. Code Ann.§ 4-10-540. The imposition of this sales and use tax must also be approved by referendum. S.C. Code Ann.§ 4-10-550.

RFMBERT

c. D ENNIS B UIL DING • PoS'r O FFICE Box 11549 • COLUMBIA, SC 29211-1549 • T ELEPHONE 803-734-3970 • FACSlMlLE 803-253-6283

The Honorable Dick Elliott
Page2
April 9, 2009

Sections 4-10-720 et seq. of the South Carolina Code (Supp. 2008) permits counties to pass an ordinance levying a sales and use tax to be used as a credit again property taxes imposed either by the county or a school district located within the county. The tax can range from one tenth of one percent to one percent. S.C. Code Ann. § 4-10-730. Again, the ordinance must be approved by referendum. S.C. Code Ann.§ 4-10-740. In addition to the provisions found in chapter 10 of title 4, chapter 37 of title 4 contains an additional means by which a county can impose a sales and use tax for the purpose of funding transportation facilities. S.C. Code Ann. §§ 4-37-10 et seq. (Supp. 2008). The amount of the tax cannot exceed one percent and must be for imposed for a specified amount of time not to exceed twenty-five years. S.C. Code Ann.§ 4-37-30. The imposition of this tax must also be approved by referendum. Id. Conclusion While we were unable to find any general law allowing a municipality to levy a sales and use tax, we found provisions in chapters 10 and 37 of title 4 specifically allowing counties to impose such a tax. However, we caution that the provisions in these statutes place specific requirements on counties wishing to impose such a tax. Thus, we suggest a county imposing a local option sales and use tax follow the provisions in these statutes carefully. Very truly yours, Henry McMaster Attorney General

~~By:

y CydnQ M. Milling

Assistant Attorney General
REVIEWED AND APPROVED BY:

~

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ertD. Cook
Deputy Attorney General