South Carolina: Sales Tax Handbook
What is included in South Carolina's sales tax basis?
Many times, an otherwise-taxable transaction will include bundled fees like excise taxes, installation fees, or finance charges or be modified with coupons, installment payment plans, etc. One question that will often arise is whether or not a certain payment or fee is included in a transaction's taxable basis.
The taxable basis refers to the portion of an entire transaction that is subject to South Carolina's sales tax. This page answers common questions about which common fees are included in the sales tax basis in South Carolina, and which are excluded.
- Are coupons and discounts included in the sales tax basis?
- Are excise taxes included in the included in the sales tax basis?
- How are installment-based sales taxed?
- Are installation fees included in the sales tax basis?
- Are finance charges included in the sales tax basis?
- Can I get a refund on sales taxes paid on returned or repossessed items?
- Can I get a refund on sales taxes paid on bad debts?
Inclusion in Sales Tax Basis
Are coupons and cash discounts included in the South Carolina sales tax basis?
What is not included are discounts made at the time of the sale, retailers coupons, abd discounts on the sale of items from the exchange of points from a customer loyalty awards program. What is included are timely payment discounts (which are deductible by the retailer on subsequent report), manufacturers coupons, and manufacturers rebates.Top
Are excise taxes included in the South Carolina sales tax basis?
Excise taxes are separate levies added by many states to the price of commodity items such as alcohol, gasoline, etc. What is not included are the federal taxes imposed on retail sales, local sales and use taxes, and local hospitality taxes and accommodations fees imposed directly on the customers. What is included are any federal manufacturers and importers excise taxes, and local hospitality taxes and accommodations fees imposed on retailers.Top
How are installment-based sales taxed?
Many businesses offer customers payment plans that allow them to pay the full price for a product over time in installments, often leading to confusion about when and how much sales tax is collected and remitted to South Carolina. The state has implemented the following provisions regarding installment sales:
Payments reported as received or total sales price reported at time of sale, at taxpayer's election
Note: Lay-away payments taxed as received as long as title has been transferred to the property being held by the seller for the purchaser (e.g., as security). If both title and possession remain with the seller, sales tax on lay-away payments is remitted with the return for the month in which the item was transferred to the customer
Are installation charges included in the South Carolina sales tax basis?
While the taxation of tangible goods is relatively straightforward, some states consider the installation costs associated with a tangible object (like carpeting, a home or vehicle fixture, etc) to be taxable. South Carolina policy states:
Installation charges are generally included in the taxable price of a tangible product.
Note: Must be separately stated
Are finance charges included in the South Carolina sales tax basis?
Many businesses offer customers financing on higher-value products, and include financing charges in the overall cost of the item. These finance charges may also be subject to sales taxes. South Carolina policy states:
Finance charges are generally included in the taxable price of a tangible product.
Note: Must be separately stated
How can I get reimbursed for sales taxes paid on items that are returned or repossessed?
If a taxable good for which sales tax has been collected is returned or reposessed by the merchant, the state may allow the amount of sales tax collected to be either deducted from the merchant's current sales tax balance or refunded to the merchant by the state. South Carolina's policies state that returns and repossessions are:
Amounts refunded not included in gross proceeds
Note: No specific provisions on repossessions
How can I get reimbursed for sales taxes paid on bad debts?
If a merchant offers goods to a consumer on credit and the payment for those goods becomes delinquent, the merchant may be eligible to be reimbursed any sales tax they paid to the state on the consumer's behalf when the transaction was made. The method of reimbursement varies state by state.
Tax paid on bad debts can generally be recovered by the merchant as a deduction.
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