Our South Carolina predominant use studies will maximize your utility sales tax exemption and refund of sales taxes paid in error on your electricity and natural gas invoices.
Qualified industries will benefit from our predominant use studies by having the maximum exempt percentage allowed in South Carolina to minimize the sales taxes on the electricity and natural gas invoices. Our proprietary software and expertise eliminates the utility sales tax liability by not over claiming the exemption and refund of sales taxes paid in error. We also handle the defense of our predominant use studies to ensure our clients keep their exemptions and refunds. Our predominant use studies also include our money-back guarantee.
In South Carolina, we can recover sales taxes paid in error up to the exempt percentage determined by our predominant use study. The refund is limited to the statute of limitations (36 months in South Carolina). Contact Us to find out more about our Risk-Free pricing offer or call 346-241-0100 ext. 3 or 844-767-0037 ext. 3 with any questions pertaining to the electricity and natural gas sales tax exemption in South Carolina or any other State.
Study required.
http://www.sctax.org/default.htm
See below partial rules from Chapter 9 of the 2017 South Carolina Tax Handbook:
Code Section
12-36-2120(15)(a) 12-36-2120(15)(d) 12-36-2120(15)(e) 12-36-2120(17)
Description
Motor fuel taxed under the motor fuel user fee law
Natural gas to be compressed or cooled for use as a motor fuel Liquefied petroleum gas for use as a motor fuel
Machines used in manufacturing, processing, agricultural packaging, recycling, compounding, mining or quarrying tangible personal property for sale. This includes certain machines used to prevent or abate air, water or noise pollution caused by machines used in manufacturing, processing, recycling, compounding, mining or quarrying tangible personal property for sale.
SC Regulation 117-302.5; SC Regulation 117-302.6; SC Regulation 117-306.1; SC Regulation 309.3; SC Regulation 117- 309.9; SC Regulation 117-314.10; SC Regulation 117-315.3; SC Regulation 117-328; Hercules Contractors and Engineers, Inc. v. South Carolina Tax Commission, 313 S.E. 2d 300 (1984); Springs Industries, Inc., v. South Carolina Department of Revenue, South Carolina Court of Appeals, No. 2003-UP-029, January 8, 2003 (unpublished), certiorari denied, October 8, 2003; Anonymous Corporation v. South Carolina Department of Revenue (02-ALJ- 17-0350-CC); Southeastern-Kusan, Inc. v. South Carolina Tax Commission 280 S.E. 2d 57 (1981); South Carolina Revenue Ruling #04-7; South Carolina Revenue Ruling #89-7; South Carolina Revenue Ruling #91-8; South Carolina Revenue Ruling #98-19; South Carolina Private Letter Ruling #92-9; South Carolina Private Letter Ruling #91-1; South Carolina Private Letter Ruling #87-3; South Carolina Private Letter Ruling #90-3; South Carolina Private Letter Ruling #89-15; South Carolina Private Letter Ruling #95-8; South Carolina Private Letter Ruling #99-3; South Carolina Revenue Procedure #05-110
Electricity used to manufacture, process, mine, or quarry tangible personal property for sale or used by cotton gins to manufacture tangible personal property for sale
SC Regulation 117-302.4
10 The controlling authorities with respect to the machine exemption are SC Regulation 117-302.5; Hercules Contractors and Engineers, Inc. v. South Carolina Tax Commission, 313 S.E. 2d 300 (1984); Springs Industries, Inc., v. South Carolina Department of Revenue, South Carolina Court of Appeals, No. 2003-UP-029, January 8, 2003 (unpublished), certiorari denied, October 8, 2003; and Anonymous Corporation v. South Carolina Department of Revenue (02-ALJ-17-0350-CC). The advisory opinions listed are provided for additional reference.
April 2017 Chapter 9, Page 5
Code Section
12-36-2120(20) 12-36-2120(21)
12-36-2120(24)
12-36-2120(31)
Description
Railcars and locomotives
Certain vessels and barges (more than 50 tons burden) SC Regulation 117-312; SC Regulation 117-321.1
Laundry supplies and machinery used by a laundry or drycleaning business. This exemption does not apply to coin operated laundromats.
SC Regulation 117-303
Vacation time sharing plans and exchange of accommodations in which the accommodation to be exchanged is the primary consideration
The Department held in South Carolina Revenue Ruling #98-5 that accommodations provided under exchange agreements are subject to the sales tax on accommodations. However, the General Assembly subsequently enacted the above exemption for “any…exchange of accommodations in which the accommodations to be exchanged are the primary consideration.”
Therefore, the furnishing of accommodations via an exchange of accommodation is not subject to the sales tax on accommodations if the accommodations to be exchanged is the primary consideration. If the accommodations to be exchanged is not the primary consideration, the furnishing of the accommodations is subject to the sales tax on accommodations, unless otherwise exempt.
50% of the gross proceeds of a modular home regulated under Chapter 43 of Title 23
SC Regulation 117-335.2
Movies sold or rented to movie theatres
Tangible personal property delivered out of state by South Carolina retailers
Petroleum asphalt products transported and used outside South Carolina
Chapter 9, Page 6
12-36-2120(34)
12-36-2120(35) 12-36-2120(36)
12-36-2120(37) April 2017
Code Section
12-36-2120(40) 12-36-2120(42)
12-36-2120(43)
12-36-2120(49) 12-36-2120(50)
12-36-2120(51)
12-36-2120(52)
Description
Shipping containers used by international shipping lines under contract with the State Ports Authority
Depreciable assets as part of a sale of an entire business
South Carolina Revenue Advisory Bulletin #01-1
Supplies, equipment, machinery, and electricity for use in filming/producing motion pictures
South Carolina Revenue Ruling #08-1211
Postage purchased by a person engaged in the business of selling advertising services for clients consisting of mailing advertising material through the United States mail
The following items when used by a qualified recycling facility: recycling property, electricity, natural gas, fuels, gasses, fluids and lubricants, ingredients or component parts of manufactured products, property used for the handling or transfer of postconsumer waste or manufactured products or in or for the manufacturing process, and machinery and equipment foundations
Material handling systems and material handling equipment used in the operation of a distribution facility or a manufacturing facility of a taxpayer that invests at least $35 million in South Carolina12
South Carolina Revenue Ruling #13-3
Parts and supplies used by persons engaged in the business of repairing or reconditioning aircraft. This exemption does not extend to tools and other equipment not attached to or that do not become a part of the aircraft (Effective January 1, 2016).13
11 South Carolina Revenue Ruling #08-12 mainly concerns the exemption for motion picture production companies in South Carolina Code §12-63-30; however, it does briefly discuss the exemption in South Carolina Code §12-36-2120(43).
12 This exemption requires that certain notices be filed by the taxpayer with the South Carolina Department of Revenue in order for the taxpayer to qualify for the exemption.
13 Prior to January 1, 2016, this exemption was limited to parts and supplies used by persons engaged in the business of repairing or reconditioning aircraft owned by or leased to the federal government or commercial air carriers.
April 2017 Chapter 9, Page 7
Code Section
12-36-2120(53)
12-36-2120(54) 12-36-2120(56) 12-36-2120(58)
12-36-2120(59)
12-36-2120(62)
12-36-2120(64)
12-36-2120(65) and 12-36-2120(66)
Description
Motor vehicle extended service and warranty contracts
South Carolina Revenue Ruling #11-1; South Carolina Revenue Ruling #93-6
Clothing and other attire required for working in a class 100 or better clean room environment (as defined in Federal Standard 209E)
Machines used in research and development
South Carolina Revenue Ruling #08-3
Cooperative direct mail promotional advertising materials and promotional maps, brochures, pamphlets, or discount coupons for use by nonprofit chambers of commerce or nonprofit convention and visitor bureaus
Facilities transmitting electricity that are transferred, sold or exchanged by an electrical utility, municipality, electric cooperative, or political subdivision to a limited liability company subject to regulation under the Federal Power Act and formed to operate or to take functional control of electric transmission assets
70% of the gross proceeds of the rental or lease of portable toilets
South Carolina Revenue Ruling #09-5; Eugenia Boggero, d/b/a/ Bogerro’s Portable Toilets v. South Carolina Department of Revenue, 414 SC 277, 777 SE 2d 842 (2015).
Sweetgrass baskets made by artists of South Carolina using locally grown sweetgrass
Computer equipment used in connection with, and electricity
and certain fuel used by, a technology intensive facility (defined in South Carolina Code §12-6-3360(M)(14)(b))14 that invests $300 million over 5 years, creates at least 100 new jobs during the 5 years with an average cash compensation of 150% of the per capita income of the State, and spends at least 60% of the $300 million investment on computer equipment
14 South Carolina Code §12-6-3360(M)(14)(b) defines a “technology intensive facility” for purposes of this exemption as “a facility primarily used for one or more activities listed under the 2002 version of the NAICS Codes 51811 (Internet Service Providers and Web Search Portals).”
April 2017 Chapter 9, Page 8
Code Section
Description
Computer equipment used in connection with a manufacturing facility where the taxpayer, over a seven year period, invests at least seven hundred fifty million dollars in real or personal property or both comprising or located at a single manufacturing facility and creates at least three thousand eight hundred full-time new jobs at the single manufacturing facility. This exemption became effective November 1, 2009 and required that a notice be filed with the Department prior to October 31, 2015 in order for the taxpayer to qualify for the exemption. This exemption continues to be available to eligible taxpayers who notified the Department prior to October 31, 2015.
SC Information Letter #15-18
Construction material used in the construction of a single manufacturing or distribution facility, or one that serves both, that invests at least $100 million at a single site in South Carolina over an 18 month period.15
Construction material used in the construction of a single manufacturing facility where the taxpayer, over a seven year period, invests at least seven hundred fifty million dollars in real or personal property or both comprising or located at a single manufacturing facility and creates at least three thousand eight hundred full-time new jobs at the a single manufacturing facility. This exemption became effective November 1, 2009 and required that a notice be filed with the Department prior to October 31, 2015 in order for the taxpayer to qualify for the exemption. This exemption continues to be available to eligible taxpayers who notified the Department prior to October 31, 2015.
Gold, silver or platinum bullion or any combination; coins that are or have been legal tender; and currency.
12-36-2120(67)
12-36-2120(70)
15 Act No. 110 of 2007 provided that this exemption will be phased in from July 1, 2007 through June 30, 2011. This exemption was phased in by reducing the tax rate as follows: (a) 4% for sales from July 1, 2007 through June 30, 2008; (b) 3% for sales from July 1, 2008 through June 30, 2009; (c) 2% for sales from July 1, 2009 through June 30, 2010; and (d) 1% for sales from July 1, 2010 through June 30, 2011. Effective July 1, 2011, qualifying construction material is fully exempt.
April 2017 Chapter 9, Page 9
Code Section
12-36-2120(73)
12-36-2120(78)16
Description
Amusement park rides; parts, machinery and equipment used to assemble, operate and make up amusement park rides; and performance venue facilities and any related or required machinery, equipment and fixtures. A $250 million investment and creation of 250 full-time jobs and 500 part-time or seasonal jobs over a 5 year period is required.
Machinery and equipment, building and other raw materials, and electricity used in the operation of a facility owned by an organization which qualifies as a tax exempt organization pursuant to the Internal Revenue Code Section 501(c)(3) when the facility is principally used for researching and testing the impact of such natural hazards as wind, fire, water, earthquake, and hail on building materials used in residential, commercial, and agricultural buildings, provided the taxpayer invests at least twenty million dollars over a three year period.
Computers, computer equipment, and computer software used within a datacenter, and electricity used by a datacenter or used by eligible business property located and used at a datacenter where the taxpayer: (1) invests at least $50 million in real or personal property or both over a 5 year period; or, if more than one taxpayer, invests a minimum aggregate capital investment of at least $75 million in real or personal property or both over a 5 year period; (2) creates and maintains at least 25 full-time jobs at the facility with an average cash compensation level of 150% of the per capita income of South Carolina or of the county in which the facility is located; and (3) maintains the jobs requirement for 3 consecutive years after certification by the Department of Commerce.17
This exemption only applies to a datacenter that is certified by the Department of Commerce prior to January 1, 2032. However, for datacenters certified by December 31, 2031, this exemption will remain in effect for an additional ten year period.
South Carolina Revenue Ruling #13-5
12-36-2120(79)
16 Act No. 280 of 2010. To qualify for this exemption, the taxpayer must notify the South Carolina Department of Revenue of its intent to qualify and must invest at least twenty million dollars in real or personal property at a single site in this State over the three-year period.
17 See Code Section 12-36-2120(79) which requires that the taxpayer meet certain investment, jobs, and notification requirements in order to claim this exemption.
April 2017 Chapter 9, Page 10
Code Section
12-62-30
Description
Tangible personal property purchased by a certified motion picture production company for use in connection with the filming or production of motion pictures in South Carolina for a company planning to spend at least $250,000 in connection with the filming or production of one or more motion pictures in South Carolina within a consecutive 12 month period. This provision does not apply to: (a) local sales tax levied and collected directly by a local governmental subdivision or (b) the production of television coverage of news and athletic events.
South Carolina Revenue Ruling #08-12
Agricultural Exemptions18
12-36-2120(4) 12-36-2120(5)
12-36-2120(6)
12-36-2120(7)
Livestock
SC Regulation 117-301.1
Feed used to produce and maintain livestock