South Carolina Updates Sales Tax Rules for Inventory Withdrawals in Businesses

• South Carolina issued guidance on sales tax for inventory withdrawals for business use.
• Withdrawals for employee use, operations, or promotions are treated as taxable retail sales.
• Tax is based on fair market value or discounted price if consistently offered.
• Wholesale price is the minimum taxable amount for clearance or going-out-of-business sales.
• Promotional withdrawals require tax based on full retail price.
• Exclusions include items previously taxed, materials for resale, warranty replacements, demonstrator vehicles, and educational donations.
• Dual purpose businesses must report tax on both sales and internal use at retail price.
• Contractors and repair businesses pay tax at purchase.
• Rental companies can pay tax at purchase or on rental value.
• Airport operators owe tax on aircraft used for charters.
• Hotels owe tax on complimentary meals in room rates.
• Railroads can apply for a direct pay certificate for supplies.
• Optometrists must report tax on glasses withdrawals unless separate entities.
• Businesses should track inventory withdrawals and understand tax obligations.
• Full ruling details are available on the South Carolina Department of Revenue website.

Source: salestaxinstitute.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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