Running a c-store business can be complicated. Understanding tax, tobacco, liquor, lottery and fuel rules and regulations can be daunting. Legislation is bound to catch your attention at some point as you wait to see how new rules or laws will impact your business. One such ruling came about in 2020 in the state of Southern Carolina.
The state of Southern Carolina’s Department of Revenue issued SC Revenue Ruling #20-3. It determined that cigarette and tobacco buydowns were to be included in the gross proceeds of sales and subject to the sales tax effective January 1, 2021. Understandably, at a sales tax rate of 6%, this caused an uproar.
The department subsequently released SC Information Letter #20-35 to delay the effective date of SC Revenue Ruling #20-3 until July 1, 2021. Both were superseded after Code Section 12-36-90 was amended in April 2021 to state that buydown are not part of “gross proceeds of sales.”
If you are curious, you can view the document that supersedes the previous ruling, DOR SC information letter #21-12.
Code Section 12-36-90 defines the term “gross proceeds of sales” as the basis or measure upon which the sales tax is calculated. Effective April 16, 2021, the Legislature amended this code section to exclude amounts received from a “buydown” from gross proceeds of sales.
SC INFORMATION LETTER #21-12
“Buydown” – Excluded from Gross Proceeds of Sales (Sales Tax)
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