Were XYZ, Inc.'s sales of feed used for horses exempt from South Carolina sales and use tax?

Plain-English summary

The South Carolina Department of Revenue concluded that XYZ, Inc.'s sales of feed used for horses were exempt from state sales and use tax. Section 12-36-2120(5) exempted feed used for the production and maintenance of poultry and livestock, and the Department read Section 12-36-2120(4) together with Regulation 117-174.12 to classify horses as livestock.

The opinion said the Department had applied the horse-feed exemption to all sales of feed used for horses for many years. It relied on South Carolina cases giving weight to a tax agency's long-standing statutory interpretation when the legislature has not changed it.

Certificate and recordkeeping guidance

The Department suggested that XYZ ask each purchaser to complete and sign Form ST-8F, the “Agricultural Exemption Certificate,” for a tax-free horse-feed sale.

If the feed was later found to have been bought for a nonexempt purpose, the ruling said the Department would look to the purchaser for the tax when XYZ had a completed ST-8F on file. It encouraged XYZ to keep the signed forms for a Department examination.

What this means for sellers

The holding was broad as to XYZ's sales of feed actually used for horses, but it did not say that every product sold to a horse owner was exempt. The stated exemption was for feed used for horses, and the certificate helped document the purchaser's claimed agricultural use.

Because this is a private letter ruling, another retailer cannot treat it as binding precedent. Current sellers should confirm that the cited exemption and current certificate procedures still apply to their facts.

Common questions

Q: Did the Department treat horses as livestock?

A: Yes. It read the statutory livestock language together with Regulation 117-174.12, which expressly listed horses among the exempt livestock sales.

Q: Did XYZ have to collect tax on feed used for horses?

A: No. The Department's conclusion was that XYZ's sales of feed used for horses were exempt from South Carolina sales and use tax.

Q: What documentation did the ruling recommend?

A: A purchaser-completed and signed Form ST-8F, kept in XYZ's files in case of a Department examination.

Q: Can another feed retailer rely on PLR 99-1?

A: No. The ruling itself says only its recipient may rely on it, only for the covered transactions, and that it has no precedential value.

Citations and references

• S.C. Code Ann. § 12-36-2120(5) (feed used for poultry and livestock)
• S.C. Code Ann. § 12-36-2120(4) (livestock exemption and definition)
• S.C. Regulation 117-174.12 (the ruling quoted it as including horses)
• Marchant v. Hamilton, 279 S.C. 497, 309 S.E.2d 781 (1983)
• Ryder Truck Lines, Inc. v. South Carolina Tax Commission, 248 S.C. 148, 149 S.E.2d 435 (1966)
• Etiwan Fertilizer Company v. South Carolina Tax Commission, 217 S.C. 354, 60 S.E.2d 682 (1950)

Subject

Sales of Feed for Horses

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/PLR99-1.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P.O. Box 125, Columbia, South Carolina 29214

SC PRIVATE LETTER RULING #99-1

TO:

XYZ, Inc.

SUBJECT:

Sales of Feed for Horses
(Sales & Use Taxes)

DATE:

August 9, 1999

REFERENCE:

S. C. Code Ann. Section 12-36-2120(4) (Supp. 1998)
S. C. Code Ann. Section 12-36-2120(5) (Supp. 1998)
Regulation #117-174.12

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Supp. 1998)
SC Revenue Procedure #97-8

SCOPE:

A Private Letter Ruling is an official advisory opinion issued by the
Department of Revenue to a specific person.

NOTE:

A Private Letter Ruling may only be relied upon by the person to whom it is
issued and only for the transaction or transactions to which it relates. A
Private Letter Ruling has no precedential value.

Question:
Are all sales by XYZ, Inc. (“XYZ”) of feed used for horses exempt from the South Carolina
sales and use taxes?
Conclusion:
Yes. It is the opinion of the Department that sales made by XYZ of feed used for horses are
exempt from the South Carolina sales and use taxes. In such cases, XYZ should have the
customer fill out and sign a Form ST-8F, “Agricultural Exemption Certificate.”
Law/Discussion:
Code Section 12-36-2120(5) exempts from the South Carolina sales and use taxes sales of “feed
used for the production and maintenance of poultry and livestock.” Section 12-36-2120(4),
which exempts sales of livestock, defines the term as:

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domesticated animals, customarily raised on South Carolina farms for use
primarily as beasts of burden, or food, and certain animals raised for their pelts or
fur. Animals such as dogs, cats, reptiles, fowls (except baby chicks and poults),
and animals of a wild nature, are not considered livestock.
Regulation #117-174.12, which pertains to the livestock exemption, reads, in part:
The practical result of the foregoing [language in the regulation] is to exempt
from the tax sales of horses, mules, cattle, swine, sheep, goats, rabbits....
(Emphasis added.)
Reading the language from Section 12-36-2120(4) with the language in Regulation 117-174.12,
establishes that horses are “livestock.”
The department has applied the exemption for feed used for horses to include all sales of feed
used for horses for many years. Therefore, it is the position of the department that all sales by
XYZ of feed used for horses are also exempt.
It is a well settled rule of statutory construction that administrative interpretations of statutes by
the agency charged with their administration and not expressly changed by the legislative body
are entitled to great weight. Marchant v. Hamilton, 279 S.C. 497, 309 S.E.2d 781(1983). When
the construction or administrative interpretation of a statute has been applied for a number of
years and has not been changed by the legislature, there is created a strong presumption that such
interpretation or construction is correct. Ryder Truck Lines, Inc. v. South Carolina Tax
Commission, 248 S.C. 148, 149 S.E.2d 435 (1966); Etiwan Fertilizer Company v. South
Carolina Tax Commission, 217 S.C. 354, 60 S.E.2d 682 (1950). See Statutes Key Nos. 219(3) &
223.5(2).
When XYZ sells feed tax-free pursuant to the exemption under Section 12-36-2120(5), it is
suggested that the purchaser be asked to fill out and sign a Form ST-8F, “Agricultural
Exemption Certificate.” (Copy attached.) If it is found that feed was purchased for a non-exempt
purpose, and XYZ has a completed Form ST-8F from the purchaser on file, the department will
look to the purchaser for the tax. XYZ is encouraged to keep the filled out and signed Form ST8F on file in the event of an examination by the department.

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