When does South Carolina use tax apply to purchases from Internet, catalog, auction-site, or out-of-state sellers, and how is it reported?

Plain-English summary

South Carolina use tax complements the sales tax. Sales tax applies to retail sales made in South Carolina; use tax generally applies when tangible personal property is bought at retail for use, storage, or consumption in South Carolina and the full South Carolina tax was not collected. The ruling expressly includes purchases made through Internet retailers, auction sites, out-of-state catalogs, and visits to another state or country. Only one of South Carolina sales tax or use tax applies to a transaction, not both.

Under the rates stated in this 2018 ruling, use tax was calculated at the 6% state rate plus the applicable local rate where the property would be used, stored, or consumed. A purchaser age 85 or older received a one-percentage-point reduction in the state rate for items bought for personal use, but no reduction in local taxes. Because the ruling cautions that its rates were those in effect when written, purchasers should confirm current rates.

If a licensed out-of-state retailer collected the entire South Carolina state and local tax and the purchaser has a receipt, no additional use tax is due. When tax was paid to another U.S. state, South Carolina allows a transaction-specific credit: the purchaser pays the difference if the other state's tax was lower, receives no refund if it was higher, and cannot use excess tax from one purchase against another. No credit is allowed for a foreign-country or U.S.-territory tax, including value-added tax.

Property first used outside South Carolina can escape use tax only if the purchaser proves all three points stated by the Department: the property was bought for bona fide use outside the state, its first actual use occurred outside the state, and that first use was substantial and was the primary use for which it was bought. South Carolina provides no fixed safe-harbor period; the result depends on each transaction's facts.

What this means for you

Individuals

If a seller did not collect the full South Carolina tax on a taxable purchase that you bring into or use in the state, you may owe use tax. The ruling says individuals could report it on Form SC1040 or Form UT-3. It also says there is no minimum-dollar filing threshold. Those are 2018 procedures, so check the Department's current forms and electronic-filing options.

Businesses and nonprofit organizations

An occasional purchaser that was not a licensed retailer could use Form UT-3 under the ruling. A regular purchaser was instructed to obtain a purchaser's certificate of registration and file the applicable sales and use tax return, generally Form ST-3 and, when applicable, local-tax schedule ST-389. A licensed retailer reported its own-use purchases on its sales and use tax return. Nonprofit status alone did not remove these reporting rules, although a specific exemption could apply.

Purchasers moving property into South Carolina

Brief use during an out-of-state vacation is not necessarily substantial. The ruling's camera example remained taxable when brought home, while furniture used for six months in a Virginia home before its owner moved to South Carolina met the outside-use test. The Department says the purchaser bears the burden of proving the three requirements.

Common questions

Q: If an out-of-state seller collected all South Carolina state and local tax, do I still owe use tax?
A: No, provided you have a receipt showing the entire amount was paid to a licensed out-of-state retailer.

Q: What if I paid sales tax to another state?
A: South Carolina credits state and local sales or use tax due and paid to another U.S. state on that purchase. If it was less than the South Carolina amount, you owe the difference. If it was more, South Carolina does not refund the excess or let you apply it to another transaction.

Q: Does tax paid in another country reduce South Carolina use tax?
A: No. The ruling allows no credit for tax or value-added tax paid to another country or a U.S. territorial possession.

Q: Are the same exemptions available for sales tax and use tax?
A: Yes. The ruling gives prescription medicine as an example: if the sale is exempt when bought from a South Carolina pharmacy under the stated conditions, the same purchase from an out-of-state mail-order pharmacy is exempt from use tax.

Q: How did the ruling treat vehicles, boats, motors, and airplanes?
A: It said an out-of-state motor vehicle or motorcycle purchase was exempt from use tax, but an infrastructure maintenance fee was due upon DMV registration. For a boat, motor, or airplane bought from an out-of-state retailer, use tax could be paid using Form ST-236 or, for a boat or motor, through the Department of Natural Resources. A purchase from a non-retailer was instead subject to casual excise tax. Verify current procedures before filing.

Citations and references

• Article 13, Chapter 36 of Title 12 (use tax provisions)
• S.C. Code Ann. Section 12-36-2620 (one-percentage-point state-rate reduction for qualifying purchasers age 85 or older)
• S.C. Code Ann. Section 12-36-1310(C) (credit limitations)
• S.C. Code Ann. Sections 12-36-1320 and 12-36-150 (transient construction property)
• S.C. Code Ann. Section 12-54-85(C) (assessment periods)
• S.C. Code Ann. Section 12-36-2120(83) and Section 56-3-627 (motor vehicles, motorcycles, and infrastructure maintenance fee)
• S.C. Code Ann. Sections 12-36-1710 through 12-36-1740 (casual excise tax)
• SC Regulation 117-320.1 (property substantially used outside South Carolina)

Subject

Use Tax Information for Individuals, Businesses and Nonprofits

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR18-9.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 12265, Columbia, South Carolina 29211

SC REVENUE RULING #18-9

SUBJECT:

Use Tax Information for Individuals, Businesses and
Nonprofits
(Use Tax)

EFFECTIVE DATE:

July 1, 2017

SUPERSEDES:

SC Revenue Ruling #16-6, and all previous documents and any
oral directives in conflict herewith.

REFERENCES:

Article 13, Chapter 36 of Title 12 (2014; Supp. 2017)

AUTHORITY:

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

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the
public. It is an advisory opinion issued to apply principles of
tax law to a set of facts or general category of taxpayers. It is
the Department’s position until superseded or modified by a
change in statute, regulation, court decision, or another
Department advisory opinion.

Purpose of Update
In July 2017, South Carolina Infrastructure and Economic Development Reform Act was
enacted to address the funding of significant road maintenance. To accomplish this
purpose, an “infrastructure maintenance fee” was imposed upon the registration of a
motor vehicle or motorcycle with the South Carolina Department of Motor Vehicles. This
fee replaces the sales and use tax on motor vehicles and motorcycles. This document is
being revised to reflect this law change (see Questions 15 – 16 below). The remainder of
the document remains unchanged.

1

Introduction
The following guidance is part of the Department’s continuing effort to provide the
public updated use tax information, including reporting and filing methods. The questions
and answers are written in general terms to explain the application of the use tax. Exhibit
A provides helpful information and tips regarding the use tax. Exhibit B provides
common examples to illustrate the state and local use tax due, if any, from purchases in
another state or the local use tax due from purchases in a South Carolina county that is
not the purchaser’s county of residence, principal place of business, or other place where
the item purchased will be used, stored or consumed.
Note: This advisory opinion is not intended to address all requirements or provisions of
authority that may be applicable to specific factual situations. More specific information,
including information about exemptions, maximum tax items, local sales and use tax
rates, and electronic filing and payment options, can be found on the Department’s
website, www.dor.sc.gov.
Questions and Answers

1. Q. What is the difference between the sales tax and the use tax?
   A. The sales tax is imposed on all retailers within South Carolina and applies to all
   retail sales of tangible personal property within the state. Retailers making sales
   of tangible personal property in South Carolina are required to remit the sales tax
   to the Department.
   The use tax was enacted in 1951 – the same year the sales tax law was adopted in
   South Carolina. The use tax is a “transaction tax” imposed upon the consumer
   (purchaser) of tangible personal property that is purchased at retail for use,
   storage, or consumption in South Carolina. The use tax applies to purchases from
   out-of-state retailers and includes purchases from retailers made through the
   Internet (retailers’ websites and retailers’ sales on auction sites), through out-ofstate catalog companies, or when visiting another state or country.
   Both the sales tax and the use tax also apply to leases or rentals at retail of
   tangible personal property (e.g., furniture, clothing, office equipment, and
   computers) and various services such as communication services and laundry and
   dry cleaning services. Either the South Carolina sales tax or the South Carolina
   use tax applies to a single transaction, but not both.
2. Q. What is the rate for the use tax?
   A. The tax rate for the use tax is the same as the sales tax. This rate is determined by
   where the tangible personal property will be used, stored or consumed, regardless
   of where the sale actually takes place. Therefore, the tax rate for the use tax is the
   6% 1 state rate plus the applicable local use tax rate for the location where the
   tangible personal property will be used, stored or consumed.
   1

The tax rates referenced are the rates in effect at the time this document was written.

2

3. Q. Is the use tax rate lower for an individual age 85 or older?
A. An individual age 85 or older is entitled to a 1% reduction in the state use tax rate
for items he purchases for his own personal use. The reduction does not apply to
any local taxes administered by the Department or any taxes collected directly by
a county or municipality. Accordingly, an individual age 85 or older will
generally pay a state use tax rate of 5% (not 6%), plus any applicable local taxes.
In order to obtain the sales tax reduction, the individual must request the reduction
at the time of sale and must provide the retailer with proof of age. See Code
Section 12-36-2620.

4. Q. Why would an out-of-state retailer charge a purchaser the South Carolina sales tax
   or use tax?
   A. An out-of-state retailer must obtain a retail license and remit either the South
   Carolina sales tax or use tax on retail sales shipped into South Carolina if the outof-state retailer has a physical presence in South Carolina.
   Examples of physical presence include, but are not limited to, maintaining
   (temporarily or permanently) an office, warehouse, store, other place of business,
   or property of any kind in the state or having (temporarily or permanently) an
   agent, representative (including delivery personnel and independent contractors
   acting on behalf of the retailer), salesman, or employee operating within the state.
   An out-of-state retailer that is not required to obtain a retail license and remit the
   South Carolina sales or use tax may, however, voluntarily obtain the retail license
   and collect and remit the tax to South Carolina.
5. Q. If an out-of-state retailer with a South Carolina retail license charges the
   purchaser for the South Carolina sales or use tax on tangible personal property
   delivered into South Carolina, is the purchaser still liable for the use tax?
   A. If the purchaser has a receipt showing the entire South Carolina (state and local)
   sales tax or use tax has been paid to a licensed out-of-state retailer, then the
   purchaser is no longer liable for the South Carolina use tax.
6. Q. If a South Carolina purchaser buys merchandise through the Internet or a mail
   order catalog from a retailer that has not obtained a South Carolina retail license
   and the retailer, therefore, does not charge the purchaser for the South Carolina
   sales or use tax on tangible personal property delivered into South Carolina, is the
   purchaser liable for the use tax?
   A. Yes.

3

7. Q. If a South Carolina purchaser travels to another state and purchases tangible
personal property from a retailer in the other state for use, storage or consumption
in South Carolina, does the South Carolina purchaser still owe the South Carolina
use tax on the purchase if the other state’s sales tax was paid to the retailer at the
time of purchase?
A. If the state and local sales or use tax due and paid in the other state is equal to or
more than the state and local use tax due in South Carolina, then the purchaser
does not owe any use tax in South Carolina on the transaction. The purchaser is
not entitled to a refund if the other state’s tax rate is greater than South Carolina’s
use tax rate.
For example, if a South Carolina purchaser paid $21 in state and local sales tax to
the other state and the total state and local use tax due in South Carolina was $18,
then the South Carolina purchaser would be allowed a credit for the $21 and no
use tax would be due in South Carolina. The purchaser would not be entitled to a
$3 refund ($21 sales tax paid in the other state less the $18 use tax due in South
Carolina).
If the state and local sales or use tax due and paid in the other state is less than the
amount of state and local use tax due in South Carolina, then the purchaser is
liable for the use tax and must pay the difference to the Department. South
Carolina allows a credit against the state and local tax due in South Carolina for
the amount of state and local sales or use tax due and paid to the other state on the
purchase of tangible personal property.
For example, if a South Carolina purchaser paid $15 in state and local sales tax to
the other state and the total state and local use tax due in South Carolina was $18,
then the South Carolina purchaser would be allowed a credit for the $15 tax paid
and would owe South Carolina use tax of $3.
Note: Each transaction stands on its own. In other words, an “excess” paid to
another state on one purchase transaction, as shown in the above example, cannot
be used to offset any South Carolina use tax that may be due on another purchase
transaction.

8. Q. If a South Carolina purchaser travels to another country and purchases tangible
   personal property from a retailer in that country for use, storage or consumption in
   South Carolina, does the South Carolina purchaser still owe the South Carolina
   use tax on the purchase if the other country’s tax was paid to the retailer at the
   time of purchase?
   A. Yes. A credit is not allowed against the South Carolina use tax for any sales or
   use tax (or any other type of tax, such as a value added tax) due and paid in
   another country or in a territorial possession of the United States.

4

9. Q. If a person purchases tangible personal property outside of South Carolina and
first uses it outside of South Carolina, is that person liable for the South Carolina
use tax if the tangible personal property is later brought into South Carolina?
A. The South Carolina use tax is due unless the person bringing the tangible personal
property into South Carolina can establish the following:
(1) The property, when purchased, was intended for a bona fide use outside of
South Carolina;
(2) The first actual use of the property was outside of South Carolina; and
(3) The first actual use of the property was substantial and constituted the primary
use for which the property was purchased.
The determination of whether the South Carolina use tax is due depends on the
individual facts and circumstances of each transaction. The purchaser is
responsible for proving that the above listed requirements have been met.
The following examples illustrate the application of the use tax requirements
discussed above when bringing tangible personal property into South Carolina.
Example 1: A South Carolina resident vacationing in North Carolina purchases a
camera and uses it on the vacation. The South Carolina use tax would be due
when the camera is brought back to South Carolina since the camera was not
substantially used outside of South Carolina. However, a credit is allowed against
the use tax for any sales or use tax due and paid in another state (but not in
another country or a U.S. territory) on the camera. See Questions 7 and 8.
Example 2: A Virginia resident purchases new furniture for his home in Virginia.
Six months 2 later, he is transferred to South Carolina. The South Carolina use tax
is not due since the furniture was purchased for use in Virginia, it was first used in
Virginia, and that first use in Virginia was substantial and constituted the primary
use for which the furniture was purchased.
Note: See Code Sections 12-36-1320 and 12-36-150 for the use tax requirements
and tax computation when transient construction property is brought into South
Carolina for use or storage.

2

South Carolina does not have an established safe harbor time frame. The South Carolina use tax
determination depends on the specific facts and circumstances of each situation.

5

10. Q. If a sale by a South Carolina retailer is exempt from the South Carolina sales tax,
is the purchase of the same product from an out-of-state retailer exempt from the
South Carolina use tax?
A. Yes. For example, prescription medicine purchased from a South Carolina
pharmacy upon presentation of the prescription written by the physician is exempt
from the South Carolina sales tax. The same purchase from an out-of-state mailorder pharmacy is exempt from the South Carolina use tax.

11. Q. When can the use tax be assessed beyond the 3 year normal time limitation
    period?
    A. Generally, use tax is assessed within 36 months from the date the return is filed or
    due to be filed, whichever is later. Code Section 12-54-85(C) provides for the
    assessment of tax after the 36 month time limitation period for the fraudulent
    intent to evade tax, failure to file a return, or a 20% understatement of tax. In
    addition, Code Section 12-54-85(C)(5) allows the Department to assess the use
    tax resulting from information received from another state or local taxing
    authority, a regional or national tax administration organization, or the federal
    government, within 12 months of receiving the information, but no later than 72
    months after the last day the use tax may be paid without penalty.
12. Q. How and when does an individual report and pay the use tax to the Department?
    A. The South Carolina use tax can be reported and remitted by an individual in the
    following ways:
    (1) Using Form SC 1040, “South Carolina Individual Income Tax Return.” An
    individual may report his South Carolina use tax due on purchases made
    during the year on his individual income tax return when filed.
    (2) Using Form SC UT-3, “Use Tax Payment Return.” An individual may report
    South Carolina use tax due on a specific purchase or the total of all purchases
    made in one month, a calendar quarter, or during the calendar year on a use
    tax return. This method is used by an individual who does not have a South
    Carolina individual income tax filing requirement for the year, such as a
    retiree or student.
    See Questions 15 and 16 below for information on purchases of motor vehicles,
    motorcycles, boats, motors, or airplanes.

6

13. Q. How does a business or nonprofit organization that is not a licensed retailer report
and pay the use tax to the Department after buying tangible personal property for
its own use?
A. A business or nonprofit organization 3 that is not a licensed retailer and that
purchases tangible personal property for its own use (i.e., not for resale) can
report the use tax as provided below, based upon the frequency of its out-of-state
purchases:
(1) For a purchaser who is not a licensed retailer and who does not regularly
purchase property for its own use from an out-of-state retailer: Use Form UT3, “Use Tax Payment Return” to report and remit South Carolina use tax due
on a specific purchase for its own use or the total of all purchases for its own
use made in one month, a calendar quarter, or during the calendar year.
(2) For a purchaser who is not a licensed retailer and who regularly purchases
property for its own use from an out-of-state retailer: (a) Obtain a purchaser’s
certificate of registration; and (b) file Form ST-3, “State Sales and Use Tax
Return” (or other applicable sales tax return) 4 and, if applicable, a local tax
addendum ST-389, “Schedule for Local Taxes,” to report and remit the use
tax. Out-of-state purchases subject to use tax are reported on the “Worksheet”
of the applicable South Carolina sales and use tax return.
Note: A purchaser’s certificate of registration for remitting use tax on a
periodic basis may be obtained free of charge by completing Form SCDOR111, “South Carolina Department of Revenue Tax Registration Application.”

14. Q. How does a business or nonprofit organization that is a licensed retailer report
    and pay the use tax to the Department after buying tangible personal property for
    its own use?
    A. A business or nonprofit organization that is a licensed retailer and that purchases
    tangible personal property for its own use (i.e., not for resale) should report and
    remit the use tax on its appropriate sales and use tax return, usually Form ST-3,
    “State Sales and Use Tax Return;” and, if applicable, a local tax addendum ST389, “Schedule for Local Taxes.” 5 Out-of-state purchases subject to use tax are
    reported on the “Worksheet” of the return.

3

Certain nonprofit organizations that sell tangible personal property are not required to be licensed as
retailers since their sales are exempt from the sales tax under Code Section 12-36-2120(41).
4
Other sales and use tax returns used by specific types of taxpayers include Forms ST-388, “State Sales,
Use, and Accommodations Tax Return”; ST-403, “State Sales, Use, and Aviation Fuel Tax Return”; and
ST-455, “State Sales, Use, Maximum Tax and Special Filers Tax Return.”
5
See footnote 3.

7

15. Q. How does a purchaser report and remit the use tax on a motor vehicle or
motorcycle purchased from an out-of-state seller?
A. The purchase of a motor vehicle or motorcycle from an out-of-state seller is
exempt from use tax. However, an infrastructure maintenance fee is due at the
time the motor vehicle or motorcycle is registered with the Department of Motor
Vehicles. 6 For questions concerning the infrastructure maintenance fee, contact
the Department of Motor Vehicles at: [email protected].

16. Q. How does a purchaser report and remit the use tax on a boat, boat motor, and
    airplane purchased from an out-of-state retailer?
    A. The use tax due on a boat, motor, or airplane purchased from an out-of-state
    retailer can be reported and paid as follows:
    (1) File Form ST-236, “Casual or Use Excise Tax Return,” with the Department;
    (2) Remit the use tax to the Department of Natural Resources at the time the boat
    or boat motor is registered, titled, or licensed.
    Note: Boats, motors and airplanes purchased from a non-retailer are subject to
    a “casual excise tax” (rather than the use tax) at the time the boat, motor, or
    airplane is registered, titled, or licensed. A taxpayer also can report and remit this
    tax by filing Form ST-236 with the Department. For information on the “casual
    excise tax,” see Code Sections 12-36-1710 through 12-36-1740.
17. Q. Can the use tax be filed and paid electronically?
    A. Yes. For specific online filing and payment information, see the Department’s
    website, www.dor.sc.gov.
18. Q. What is the Department’s contact information for additional use tax questions?
    A. Questions about the use tax should be directed to the Department at 1-844-8988542 or by e-mail at [email protected].

SOUTH CAROLINA DEPARTMENT OF REVENUE

s/W. Hartley Powell
W. Hartley Powell, Director
June 7
, 2018
Columbia, South Carolina
6

See Code Section 12-36-2120(83) and Code Section 56-3-627.

8

Exhibit A – General Information and Tips about the Use Tax

1. There is no minimum dollar use tax filing requirement like there is for individual
   income tax. An individual who is not required to file an individual income tax return
   may have to file a use tax return for the current tax year.
2. An individual is not subject to double taxation on a purchase. The individual may
   have to pay either the South Carolina state sales tax (plus applicable local taxes) or
   state use tax (plus applicable local taxes) on a purchase, but not both on the same
   purchase.
3. An individual age 85 or older purchasing property for his own personal use (e.g.,
   clothing, furniture, appliances, etc.) that is subject to South Carolina use tax pays a
   lower use tax rate than an individual under 85. The use tax rate for an individual 85 or
   older is 5% (as opposed to 6%) plus applicable local taxes. To receive the sales tax
   reduction, the individual must request it at the time of purchase and provide the
   retailer with proof of age.
4. The use tax does not apply to an individual purchasing stocks, bonds, or mortgages;
   the use tax applies only to tangible personal property and limited services (e.g.,
   charges to access an out-of-state website, laundry and dry cleaning services, and
   communication services).
5. Items purchased for use outside South Carolina and substantially used outside of
   South Carolina are not subject to South Carolina use tax. For example, a nonresident
   individual relocating to South Carolina does not owe South Carolina use tax on
   property substantially used in the former state of residence, such as household items,
   computers, and furniture; however, he would owe South Carolina use tax on any of
   these items if they were not first substantially used outside of South Carolina. SC
   Regulation 117-320.1. Also see Code Section 12-36-1320 for transient construction
   property use tax provisions.
6. An individual cannot reduce any South Carolina use tax due by sales tax paid in
   another country or territorial possession of the United States. See Code Section 1236-1310(C) and SC Revenue Ruling #06-4.
7. An individual paying state and local sales or use tax in another state that is higher
   than the state and local sales and use tax rate in South Carolina is not entitled to a
   refund of the difference in the tax rates.
8. It is important to maintain records of purchases for 6 years in some instances.
   Assessments of use tax from information received from other state taxing authorities,
   tax administration organizations, or the federal government may be assessed at any
   time within 12 months after the Department receives the information, but no later
   than 72 months after the last day the use tax may be paid without penalty. For
   example, this provision extends the time limitations for the Department to assess use
   tax due on items reported by another state, regional compacts, or U.S. Customs and
   Border Protection. Code Section 12-54-85(C)(5).
   9

Exhibit B – Examples of Use Tax Due from Out-of-State or In-State Purchases
A. Out-of-State Purchases - The following examples illustrate the South Carolina use
tax due (State and local) from the individual, if any, from his purchase of a taxable item
in another state.
Purchaser

Individual 1

Individual 2

Individual 3

Tax Rate Paid
in Another
State by
Individual on
Purchase Made
Outside of
South Carolina
$0 State and
Local Taxes in
Other State
4% State

• $0 Local Tax
  = 4% Rate in
  Other State
  4% State
• 4.75% Local
  = 8.75% Rate in
  Other State

Tax Rate in South
Carolina
(State Rate and
Local Rate in South
Carolina County
Where Purchaser
Lives)
6% State

• 1% Local County
  = 7% SC Rate
  6% State
• 1% Local County
  = 7% SC Rate

Amount of
Offset or
“Credit” for
Sales/Use Taxes
Paid in
Other State by
the Individual
Not Applicable

6% State

• 0% Local County
  = 6% SC Rate

8.75%

4%

Use Tax
(State and
Local) Due in
South
Carolina by
the
Individual
7% of
Purchase
Price
3% of
Purchase
Price
$0 - No Tax
Due and No
Tax Refunded

Individual 1 – This example illustrates a purchase from a state that has no sales tax or did
not collect any sales tax on the taxable transaction. Assume the purchase price was $100.
The South Carolina resident individual must remit $7 ($100 x 7%) use tax to the
Department.
Individual 2 – This example illustrates a taxable purchase from a state that has a lower
tax rate than South Carolina. Assume the purchase price was $1,000 and the individual
paid 4% sales tax ($40) at the time of purchase. The total South Carolina use tax due
based on his county of residence is $70 ($1,000 x 7%). The individual must remit $30 use
tax ($70 total tax - $40 paid in other state) to the Department.
Comment: If the purchase had taken place in a foreign country, the individual would
owe South Carolina $70 use tax since a “credit” for sales or use tax paid in a foreign
country is not allowed under South Carolina law.
Individual 3 – This example illustrates a taxable purchase from a state that has a higher
tax rate than South Carolina. Assume the purchase price is $10,000 and the individual
owed and paid state and local sales tax of $875 ($10,000 x 8.75%) at the time of
purchase. Although the use tax due based on his county of residence in South Carolina is
only $600 ($10,000 x 6%), he does not get a refund of the $275 tax overpayment, nor can
he use it to offset any use tax that may be due on another out-of-state transaction subject
to use tax.

10

B. In-State Purchases - The following examples illustrate the South Carolina local use
tax due from an individual from his purchase of a taxable item in a South Carolina county
that is not his county of residence. The South Carolina state tax rate is 6% and is paid.
Purchaser

Individual 1
Individual 2

Local Tax Rate in
the SC County of
Purchase
Local – 0%
Local – 1%

Local Tax Rate in
the Purchaser’s SC
County of Residence
Local – 2%
Local – 0%

Local Use Tax Due by
the Purchaser
2% of Purchase Price
$0 - No Local Tax Due
and No Tax Refunded

Individual 1 – This example illustrates a purchase in a South Carolina county that has no
local sales tax that is not the purchaser’s county of residence. The purchaser intends to
use the item in his county of residence, which imposes local use taxes of 2%. Assume the
purchase price was $1,000 and the 6% State tax rate was paid but $0 local tax was
collected by the retailer. The individual must remit $20 ($1,000 x 2%) local use tax to the
Department.
Individual 2 – This example illustrates a taxable purchase in a South Carolina county that
has a higher local tax rate than that imposed by the purchaser’s county of residence.
Assume the purchase price is $10,000 and the individual paid $700 ($10,000 x 7%; i.e.,
the 6% State use tax rate + the 1% local tax rate) at the time of purchase. Although the
county in which the purchaser resides and where the item will be consumed does not
have a local tax, the purchaser does not get a refund of the $100 local tax paid, nor can he
use the $100 to offset any state or local use tax that may be due on another transaction
subject to use tax.

11