Does South Carolina charge sales tax on services?
by May 24, 2023
The majority of U.S. states require merchants to charge sales tax on tangible personal property (TPP), otherwise known as physical goods. Many states also implement sales and use tax on digital goods and SaaS. Because the economy has shifted over time from a manufacturing economy to a service economy, states are now looking to generate revenue by taxing services.
Here’s what merchants need to know about taxing services in the state of South Carolina, which has a state sales tax rate of 6%.
Does South Carolina charge sales tax on services?
Services are generally not taxable in South Carolina, though there are exceptions:
- Admissions to places of amusement when an admission fee has been charged
- Furnishing of accommodations (the state rate for this service is 7%)
- Dry cleaning and laundering services
- Electricity
- Communication services including, but not limited to: telephone services (not specifically exempted under SC Code § 12-36-2120(11), including telephone services provided via the traditional circuit-committed protocols of the public switched telephone network, a wireless transmission system, a voice over Internet protocol, or any of other method
- Teleconferencing services
- Paging services
- Cable television services
- Satellite programming services and other programming transmission services (includes, but is not limited to, emergency communication services and television, radio, music or other programming services)
- Fax transmission services
- E-mail services
- Electronic filing of tax returns when the return is electronically filed by a person who did not prepare the tax return
- Database access transmission services (online information services), such as legal research services, credit reporting/research services, charges to access an individual website (including application service providers), etc. This does not not include computer database information services provided by a cooperative service when the database information has been assembled by and for the exclusive use of the members of the cooperative services.
- Prepaid wireless calling arrangements (sale or recharge at retail) as defined in SC Code § 12-36-910(B)(5)
- 900/976 telephone service (the state tax rate on this type of communication service is 11%, not 6%)
Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be subject to state sales tax. For an in-depth look at South Carolina sales tax, TaxJar’s guide to sales tax in South Carolina and the South Carolina Department of Revenue has more details.
How to stay compliant with sales tax when you sell services
Managing all the moving parts of sales tax can be challenging. Are accounting services taxed? What about hair care or car maintenance? They may not be taxed in your state today, but sales tax laws change all the time. TaxJar makes it easier for you to stay current with it all, especially as you scale your business across states.
If you need to charge sales tax on services, TaxJar takes all of these state laws into account and makes your job simple. To learn more about TaxJar and get started automating your sales tax compliance, start a free, 30-day trial today.
