When are a wholesaler's sales of beer or wine to the military exempt from South Carolina beer and wine tax, and how are they reported?

Plain-English summary

Beer and wine sold to the U.S. military are exempt from South Carolina's beer and wine tax under S.C. Code Ann. § 12-21-100. The exemption covers beer, wine, soft drinks, and other goods subject to Chapter 21 tax when sold to the United States Government (or a U.S. Government instrumentality) for Army, Navy, Marine, or Air Force purposes and:

• delivered to a place lawfully ceded to the United States, or
• delivered to a U.S. Navy ship for distribution and sale to members of the military only, or
• sold and delivered to ships regularly engaged in foreign or coastwise shipping between points in and outside the State.

Exempt goods may also be stored and delivered without paying the tax if done under Department regulations.

The main practical point of the letter is the reporting procedure. The Department replaced the old affidavit approach from SC Information Letter #89-3 / SC Revenue Procedure #89-4 with its own standardized Affidavit for Sales of Beer/Wine to the Military (Form L-BW-603). Wholesalers must:

• Electronically file Form L-BW-603 via MyDORWAY with the monthly Beer Wholesalers Report (L-600) and/or Wine Wholesalers Report (L-601) — the Department does not accept paper returns of these reports.
• File separate affidavits for exempt beer and exempt wine (one listing only exempt beer sales with the L-600, one listing only exempt wine sales with the L-601).
• Keep records — affidavits, invoices, purchase orders, and other documentation. The burden of proving a sale meets the exemption is on the taxpayer.

What this means for you

Beer and wine wholesalers

If you sell to the military under § 12-21-100, don't just leave the sales off your return — document the exemption by filing Form L-BW-603 electronically with the matching monthly wholesaler report, and keep the supporting invoices and purchase orders in case of audit.

Beer vs. wine sales

File a distinct affidavit for each: exempt beer sales go with the L-600, exempt wine sales with the L-601. If you make both, you file two affidavits.

Audit exposure

Because the taxpayer bears the burden of proof, a sale that isn't supported by proper documentation can be deemed taxable on audit.

Common questions

Q: Are all sales to a military base exempt?
A: The exemption applies to sales to the U.S. Government or an instrumentality for military purposes with the specified delivery — to ceded federal land, to a Navy ship for service members, or to qualifying foreign/coastwise ships. Documentation must support the exemption.

Q: How do I report exempt military sales?
A: File Form L-BW-603 electronically through MyDORWAY along with your monthly L-600 (beer) and/or L-601 (wine) wholesaler report.

Q: Can I file these on paper?
A: No. The Department requires electronic filing and payment of the wholesaler reports (and the affidavit) via MyDORWAY.

Q: Who has to prove the sale qualifies?
A: The taxpayer. Retain affidavits, invoices, and purchase orders; unsupported sales may be taxed on audit.

Citations and references

Statutes:

• S.C. Code Ann. § 12-21-100 (2014) — exemption for beer, wine, and other goods sold to the U.S. Government for military purposes
• S.C. Code Ann. § 12-54-40 (2014); § 12-54-44 — penalties and taxpayer certification

Forms referenced:

• Form L-BW-603 — Affidavit for Sales of Beer/Wine to the Military
• Form L-600 — Beer Wholesalers Monthly Report; Form L-601 — Wine Wholesalers Monthly Report

Authority:

• S.C. Code Ann. §§ 12-4-320, 1-23-10(4); SC Revenue Procedure #09-3

Supersedes: SC Information Letter #89-3; SC Revenue Procedure #89-4

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL24-18.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE

300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 125, Columbia, South Carolina 29214-0575

SC INFORMATION LETTER #24-18

SUBJECT: Sales of Beer or Wine to the Military
(Beer and Wine Taxes)

EFFECTIVE DATE: Applies to all periods open under the statute

SUPERSEDES: SC Information Letter #89-3 1
SC Revenue Procedure #89-4

REFERENCE: S.C. Code Ann. Section 12-21-100 (2014)
S.C. Code Ann. Section 12-54-40 (2014)

AUTHORITY: S.C. Code Ann. § 12-4-320 (2014)
S.C. Code Ann. § 1-23-10(4) (2005)
SC Revenue Procedure #09-3

SCOPE: An Information Letter is a written statement issued to the public to announce
general information useful in complying with the laws administered by the
Department. An Information Letter has no precedential value.

Code Section 12-21-100 exempts the sale of certain articles (including beer and wine) sold to the
United States, for military use, from taxes imposed by Chapter 21 of Title 12, and reads:

Beer, wine, soft drinks or any goods, wares and merchandise subject to tax under
the provisions of this chapter shall be exempt from such tax when sold to the United
States Government or United States Government instrumentality for Army, Navy,
Marine or Air Force purposes and delivered to a place lawfully ceded to the United
States, or delivered to a ship belonging to the United States Navy for distribution
and sale to members of the military establishment only, or when sold and delivered
to ships regularly engaged in foreign or coastwise shipping between points in this
State and points outside the State. Any goods, the sale of which is exempt by this
section, may be stored and delivered without payment of the tax imposed by this
chapter if stored and delivered in accordance with regulations to be promulgated by
the South Carolina Department of Revenue.

In SC Information Letter #89-31 and SC Revenue Procedure #89-4, the Department issued guidance
on reporting procedures for taxpayers who sell items exempt under Code Section 12-21-100. These
reporting procedures mandated taxpayers to file an affidavit along with the taxpayer’s monthly beer
or wine tax return, which certified the sales the taxpayer made to a military agency in accordance
with Code Section 12-21-100. The advisory opinions included a list of information taxpayers should
include in these affidavits and also provided a sample affidavit for taxpayers’ use.

Since then, the Department has developed its own standard affidavit, the Affidavit for Sales of
Beer/Wine to the Military (Form L-BW-603) for taxpayers to use when reporting exempt sales
pursuant to Code Section 12-21-100. Form L-BW-603 is attached and can also be found on the
Department’s website at https://dor.sc.gov/forms-site/Forms/LB W603.

Taxpayers must complete and file the Affidavit for Sales of Beer/Wine to the Military (Form L-BW-
603) along with its Beer Wholesalers Monthly Report (L-600) or its Wine Wholesalers Monthly
Report (L-601). If a taxpayer makes both beer and wine sales that are exempt under Code Section
12-21-100, the taxpayer must file one affidavit listing only exempt wine sales along with its Wine
Wholesalers Monthly Report (L-601) and one affidavit listing only exempt beer sales along with its
Beer Wholesalers Monthly Report (L-600).

The Department does not accept paper returns of the Wine Wholesaler and/or Beer Wholesaler
Monthly Reports. Instead, taxpayers must file and pay their Wine Wholesalers and/or Beer
Wholesalers Monthly Reports electronically via their MyDORWAY accounts at
MyDORWAY.dor.sc.gov. Taxpayers must also electronically file the Affidavit for Sales of
Beer/Wine to the Miliary (Form L-BW-603) for exempt sales under Code Section 12-21-100 along
with their Wine Wholesaler and/or Beer Wholesaler Monthly Reports.

In addition, taxpayers should retain, in their files, copies of any affidavits, invoices, purchase orders
and any other information or documentation necessary to verify the sales meet the exemption
provisions of Code Section 12-21-100. The burden of proof that any sale falls within the exemption
is upon the taxpayer.

For general information regarding the Wine Wholesalers Monthly Report, please see
https://dor.sc.gov/forms-site/Forms/L601. For general information regarding the Beer Wholesalers
Monthly Report, please see https://dor.sc.gov/forms-site/Forms/L600.

14350 STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE L-BW-603
AFFIDAVIT FOR SALES OF BEERIWINE | joy. t017122)
dorac.gew TO THE MILITARY are

Complete this affidavit and attach it to your Monthly Beer or Wine Wholesalers Report when filing on MyDORWAYT.
Filing penod:

Select one: ( Sales of Beer to Military (list separately from non-military wine sales and attach online to the L-600,
Monthly Beer Wholesalers Report)

[_] Sales of Wine to Military (list separately from non-military beer sales and attach online to the L-601,
Monthly Wine Wholesalers Report)

Distributors name:

Physical location address:

City: State: ZIP:
Beer Wholesaler file number: Wine Wholesaler fle number:
Invoice Invoice Military Name of Miltary Agency" Number of
date number purchase order no. sold to cases
Total Cases

• Military Agency includes name of Installation, Club, System, Exchange, Base, or Ship.

Important: Reverse side must be completed.

4L?Prid23

Filing period:

SOLD TO MILITARY BY DENOMINATION

BEER SIZES
1ziZoz 12/19.202 T2iZzoz 1zi3Zoz 1izZ/40oz 15202 15/1602
Total Gases Sold
18/19.207 1ilZ20z 1hi25o02 THM Zoz 18/1607 24/6802 24/Toz
Total Cases Sold
24/02 24/1202 24/1602 Wz keg 14 keg TWhkeg W13.2 gal
Total Cases Sold
WINE SIZES
2818 f mL | 24/200mL | 24/250mL | W2/300mL | 12FS5mL | iar Sob | 2355mL | 24/37 5mL
Total Gases Sold
48/100mL | F2/100mL | 12/500mL | Gir20mbL | W2720mL | BF S0mL | ivrs0mL «18/7 50mL
Total Gases Sold
WL BIL B/1.5L Bi1.75L 4/4 4/5L
Total Gases Sold
Affidavit
I, , for the firm of

affirm, under penalties of penury, thal the information in the affidavit concerning sales of beer to the military is true and
correct, to the best of my Knowledge: thal such sales were in fact made and delivered in accordance with the provisions
of Secton 12-21-100; that the above military sales have, to the best of my Knowledge, been correctly and accurately
reported on the monthly return to which this affidavit is attached; that any sale failing to meet the provisions of Section
12-21-100, or which is nol supported by proper documentation, may, Upon audit, be deemed taxable: and thal | have
read and understand the provisions of South Carolina Code Secon 12-54-44(B8)(Gilai(l & i),(b).

Signature

WL? 7edel

Printed Name

Date