South Carolina Restaurant Tax: Rates, Hospitality Tax & Liquor Excise

A restaurant meal in South Carolina carries a 6% state sales tax, and most cities and counties add a local hospitality tax of 1% to 2% on the same bill. In tourist-heavy areas, additional county-level sales taxes can push the total higher still, and drinks made with liquor pick up a separate 5% excise tax. That combined stack is what the South Carolina restaurant tax looks like on a receipt, and it’s what owners are responsible for collecting at the register and sending to the right agency on time.

The 6% State Sales Tax on Prepared Meals

Every restaurant in the state collects 6% on prepared food. The rate comes from two statutes working together: a 5% base sales tax on retail sales of tangible personal property, plus a supplemental 1% tax enacted in 2007 that reaches most taxable items, restaurant meals included.1South Carolina Legislature. South Carolina Code 12-36-910 – Five Percent Tax on Tangible Personal Property2South Carolina Legislature. South Carolina Code 12-36-1110 – Additional Sales, Use and Casual Excise Tax The 6% applies to the menu price before any local layer is added.

Before a restaurant collects a cent of it, the business needs a valid retail license from the South Carolina Department of Revenue.3South Carolina Department of Revenue. Sales Tax That license covers all taxable sales at the location, so branded merchandise and gift cards sold at the counter carry the same 6% as the food.

Prepared Meals vs. Unprepared Food

The 6% only reaches prepared meals. Unprepared food eligible for purchase with USDA food stamps is exempt from both the 5% base tax and the 1% supplemental tax.4South Carolina Legislature. South Carolina Code 12-36-2120 – Exemptions from Sales Tax2South Carolina Legislature. South Carolina Code 12-36-1110 – Additional Sales, Use and Casual Excise Tax For a straight restaurant, that distinction rarely comes up. It matters most for delis and convenience stores that sell grab-and-go meals alongside packaged groceries.

The Department of Revenue defines a prepared meal as food sold by a business that advertises or presents itself as selling ready-to-eat food for immediate consumption. Hot food, seating, or utensils supplied with the order are all indicators.5South Carolina Department of Revenue. Chapter 21 – Unprepared Food Exemption A sandwich made to order at a deli counter is a prepared meal. A loaf of bread on the shelf next to it is not. A business selling both needs to track them separately.

Local Hospitality Tax

On top of the 6% state rate, most South Carolina cities and counties impose a local hospitality tax on prepared meals and beverages. State law caps the tax at 2% for municipalities. Counties face a 1% ceiling within municipal boundaries unless the city government passes a resolution consenting to a higher rate.6South Carolina Legislature. South Carolina Code 6-1-720 – Imposition of Local Hospitality Tax Many areas layer both, so a diner might pay 1% to the county and 2% to the city on the same check.

Hospitality tax revenue doesn’t go into a general fund. State law restricts it to tourism-related spending: civic centers, cultural and recreational facilities, beach renourishment, roads connecting to tourist destinations, tourism advertising, and water and sewer infrastructure serving tourism demand.7South Carolina Legislature. South Carolina Code 6-1-730 – Use of Revenue from Local Hospitality Tax Restaurant owners remit it to the local government rather than to the state. Missing those payments triggers local penalties and can put a business license at risk.

Other Local Taxes That Stack on the Bill

The hospitality tax isn’t the only local layer. Counties can also impose local-option sales taxes that reach prepared food, including education capital improvement taxes, capital projects taxes, and transportation taxes.8South Carolina Department of Revenue. Local Sales Taxes These vary by county. Some counties have none. Others stack several. Added to the 6% state rate and the local hospitality tax, the total on a restaurant meal can reach double digits in tourist-heavy areas.

If you own a restaurant, the Department of Revenue’s local sales tax page lists every active county-level tax and its rate. Check it when you open a new location or expand into another county, because rates and filing obligations can change significantly within a short drive.

The 5% Excise Tax on Liquor by the Drink

Restaurants with liquor licenses collect an additional 5% excise tax on every drink containing distilled spirits served for on-premises consumption. The tax is calculated on the gross proceeds of the sale and sits on top of the regular 6% sales tax, so a cocktail carries an 11% state-level tax burden before any local taxes apply.9South Carolina Legislature. South Carolina Code 12-33-245 – Excise Tax on Sales for On-Premises Consumption The excise applies whether the liquor is poured from a large bottle or a minibottle.10South Carolina Department of Revenue. Liquor by the Drink Taxes

Beer and wine are not subject to this excise tax. They carry only the regular sales tax and any applicable local taxes.10South Carolina Department of Revenue. Liquor by the Drink Taxes South Carolina does levy separate excise taxes on beer and wine, but those are collected at the wholesale or distributor level, not at the restaurant register. On the operations side, liquor sales need to be tracked separately from beer and wine because the 5% excise is filed on a different return.

How Coupons and Discounts Change the Taxable Amount

When a restaurant offers its own discount or coupon, sales tax applies to the reduced price. A $50 dinner that drops to $40 with a store coupon is taxed on $40. The restaurant voluntarily reduced its selling price, so the taxable amount drops with it.

Manufacturer coupons and third-party promotions work the opposite way. When a third party reimburses the restaurant for the discount, the full pre-coupon price stays the taxable amount. A $50 meal knocked down to $40 by a manufacturer coupon still generates tax on $50, because the restaurant ultimately receives the full amount once the reimbursement comes through. If you run promotions sponsored by a supplier or platform, apply sales tax to the full selling price before the third-party discount.

Exemptions Restaurants Actually Encounter

A handful of narrow exemptions reduce or eliminate sales tax on specific food service. They don’t reach typical restaurant meals, but owners sometimes run into them with institutional buyers or special events.

These exemptions are tightly defined. A nonprofit buying catering for a gala doesn’t automatically qualify. The organization’s purpose, the type of food, and the intended recipients all factor in. Verify exemption status with the Department of Revenue before skipping tax on any sale.

What Happens If You File Late

Missing a sales tax filing deadline triggers an automatic penalty of 5% of the unpaid tax for the first month, plus another 5% for each month the return stays delinquent, up to a 25% maximum.11South Carolina Legislature. South Carolina Code 12-54-43 – Penalties The cap arrives in five months. The penalty is calculated on the amount owed after any payments already made, and interest accrues separately on top.

Local hospitality taxes carry their own penalty structures set by each municipality or county, and those can include revocation of your business license. At the state level, persistent noncompliance can lead to suspension of your retail license, which means you cannot legally operate until it’s resolved.3South Carolina Department of Revenue. Sales Tax For a restaurant, losing either license is a forced closure. Filing on time and amending later beats filing late.