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Finance Division

Sales Tax Exemptions

The following exclusions/exemptions are briefly summarized from the SC Code of Laws.

The following is a listing of exclusions from the sales and use tax . These items should be considered when sales are being made to third parties or when payments are being made to determine if any are applicable. The law states that these exclusions should be liberally construed. For example, if there is doubt concerning whether a particular transaction is subject to tax, then the tax is not to be imposed.

  • Sales of items for resale. No tax should be collected.
  • Sales of property which will become a component part of an item offered for resale.  No tax should be collected.
  • Purchase of materials, containers, labels, sacks or bags used to ship products for resale.
  • Equipment used exclusively for research and development

Exemptions from tax are divided into two categories: partial exemptions and full exemptions. Unlike the exclusions, exemptions are strictly interpreted. Therefore, to be exempt the item must fall entirely within the exemption.

Partial exemptions

There is a maximum tax of $300.00 imposed on the following items:

  • Aircraft
  • Motor vehicles
  • Boats
  • Trailers and semi trailers pulled by a truck tractor
  • Horse trailers
  • Recreations vehicles

Full exemptions

In order to be exempt, title must rest in the name of the Federal government; it is not enough that Federal funds are being used for purchase.

The following categories are exempt from tax:

  • Government - Federal
  • Federal government contracts
  • Sales to Federal government
  • Transactions that are prohibited from being taxed by the US Constitution
  • Coal, coke, fuel for electric power companies and processors
  • Long distance telephone calls, access charges and charges for telegraph messages
  • Wrapping paper, containers, etc., used for sale and delivery of personal property
  • Motor fuel taxed under the motor fuel tax law
  • Recycling machinery
  • Electricity, natural gas, fuels, gasses, fluids, and lubricants used by a qualified recycling facility
  • Property used for the handling or transfer of post consumer waste by a qualified recycling facility
  • Agricultural
  • Livestock
  • Feed used to produce and maintain livestock
  • Insecticides, chemicals, fertilizers, soil conditioners, seeds, seedling or nursery stock used in the production of farm products
  • Containers and labels used in preparing agriculture products for sale
  • Farm machinery
  • Fuel used to cure agriculture products
  • Farm products sold in their original state of production when sold by producer
  • Electricity and gas used in the productions of livestock and milk
  • Electricity used to irrigate crops
  • Building materials, supplies, fixtures and equipment used to construct commercial housing for poultry or livestock
It should be noted that the above exemption items apply to items that are sold and not applicable for items used in research and development of agricultural products.
  • Educational textbooks, library books, magazines, periodicals, newspapers and access to online information sold to schools and public libraries. Both printed items and alternative forms such as audio tapes, videotapes, microfilm or CD ROM information will qualify. This exemption applies to items used in the classroom or library. It does not apply to personal reference material.
  • Newspapers
  • Zoo animals and plants
  • General Public Good items
  • Water
  • Residential electricity and fuel
  • Concession sales by nonprofit organizations at a festival
  • Medicine and prosthetic devices sold by prescription; if no prescription subject to tax

The above listings are only intended for general information. If you believe your area has a qualifying item, please contact Ree Cooley in Accounting Services at 656-5603 or desirec@clemson.edu for complete details of the law relating to your particular item.

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