To get a South Carolina sales tax exemption certificate, you register a Sales and Use Tax account with the South Carolina Department of Revenue (SCDOR), then file the exemption form that matches your situation: Form ST-10 for most exemptions under South Carolina Code 12-36-2120, or Form ST-387 if you are a qualifying nonprofit claiming the exemption under subsection (41).1South Carolina Department of Revenue. Sales Tax Exemptions Every exemption traces back to a specific subsection of 12-36-2120, and you must identify yours on the application.
Confirm You Qualify
South Carolina Code 12-36-2120 lists dozens of exemptions, but most applicants fall into one of three groups.2South Carolina Legislature. South Carolina Code Title 12 Chapter 36 Section 12-36-2120
Manufacturers and processors. If you manufacture, process, compound, mine, or quarry tangible personal property for sale, subsection (17) covers machinery, replacement parts, attachments used in the machine’s operation, and pollution-control equipment required by a government agency order. Recycling operations that reprocess collected materials into raw materials or new products for sale also qualify. Raw materials that become part of the finished product are exempt as ingredient or component parts under Section 12-36-120(2).3South Carolina Department of Revenue. Chapter 14 Manufacturers, Processors and Compounders Office furniture, administrative supplies, general maintenance items, automobiles, and trucks are excluded.
Agricultural producers. Several overlapping subsections exempt livestock raised for food or work, feed, insecticides, fertilizers, seeds, farm machinery used for planting, cultivating, or harvesting, agricultural packaging, and building materials for structures used to commercially house poultry or livestock. Automobiles and trucks are excluded here too. The statute requires that products be raised for sale, so hobby farms and backyard gardens generally do not qualify.
Qualifying nonprofits. Subsection (41) works in the opposite direction: it exempts sales tax on items sold by qualifying organizations, provided the net proceeds go exclusively to exempt purposes and no benefit flows to any individual.4South Carolina Department of Revenue. SC Revenue Procedure 03-3 – Sales Tax Exemption Certificates and Sales by Certain Nonprofit Organizations The organization must first be eligible for a property tax exemption under specific subsections of Code 12-37-220, which include churches and public libraries, charitable trusts and foundations, congressionally chartered veterans groups such as the American Legion and VFW, the YMCA, YWCA, Salvation Army, Boy and Girl Scouts, fraternal societies, educational and literary associations, volunteer fire departments, rescue squads, community theaters, symphony orchestras, and arts councils. A church bake sale or a charity auction is the classic use case. The certificate does not automatically let a nonprofit buy supplies for its own internal use tax-free.
Register a Sales and Use Tax Account First
You must have a Sales and Use Tax account with SCDOR before an exemption can be granted.1South Carolina Department of Revenue. Sales Tax Exemptions This is the step first-time applicants most often miss. Register through the MyDORWAY Business Tax Application. If you are unsure which type of account fits your organization, SCDOR recommends selecting “Use Tax.”
To register you need a valid identification number (Social Security Number, ITIN, or Federal Employer Identification Number), physical and mailing addresses, business structure details, and your NAICS code. If you do not have an EIN, you can apply free through the IRS online and receive the number immediately.5Internal Revenue Service. Get an Employer Identification Number
Nonprofits that do not yet have federal tax-exempt status need to apply with the IRS using Form 1023 or the streamlined Form 1023-EZ. The 1023-EZ is available to organizations with annual gross receipts of $50,000 or less and total assets below $250,000.6Internal Revenue Service. Instructions for Form 1023-EZ Filing within 27 months of formation gives you an effective date going back to the organization’s creation. Churches, their integrated auxiliaries, and very small public charities with annual gross receipts normally under $5,000 are exempt from this IRS filing requirement.7Internal Revenue Service. Application for Recognition of Exemption
Pick the Right Form
Three forms come up in South Carolina exemption paperwork, and only two of them are applications.
- Form ST-10, Application for Exemption Certificate. The general application for most exemptions under 12-36-2120, including manufacturing and agriculture. Submit it to SCDOR for review.1South Carolina Department of Revenue. Sales Tax Exemptions
- Form ST-387, Application for Exempt Organizations. Required specifically for nonprofits claiming the subsection (41) exemption. The form asks for the IRS determination letter and the organization’s charter and bylaws.8South Carolina Department of Revenue. ST-387 Application for Sales Tax Exemption Under Code Section 12-36-2120(41)
- Form ST-8, Exemption Certificate for Single Sale. Not an application. You fill it out and hand it to a vendor for a one-time tax-exempt purchase; the vendor keeps it. Do not send the ST-8 to SCDOR.
Whichever application you use, name the specific subsection of 12-36-2120 that authorizes your exemption.
Gather Supporting Documents Before You Start
Incomplete applications are the most common cause of delay, so pull everything together before you file.
Nonprofits filing the ST-387 must attach the IRS exemption letter and the organization’s charter and bylaws. If your organization is a subordinate covered by a parent group’s IRS group exemption letter, you can furnish a copy of that letter along with a statement confirming your coverage.9Internal Revenue Service. 1987 EO CPE Text – Group Exemptions
Manufacturers typically need a business license, a description of the manufacturing process, and purchase records for the machinery or materials at issue. Agricultural producers should be ready with proof of a commercial farming operation, such as a Schedule F from the federal return, a USDA farm number, or business registration records.
Submit and Wait for the Certificate
You can submit the application electronically through MyDORWAY or by mail.10South Carolina Department of Revenue. MyDORWAY Processing times are not published, and SCDOR may come back with questions, so file well before you need to make exempt purchases.
Once approved, you receive a Sales Tax Exemption Certificate. Keep a copy in your records and provide copies to vendors. Some exemption types require periodic renewal; confirm the expiration date and renewal requirements when the certificate arrives.
Using the Certificate at Purchase
Present the certificate to the seller at the time of purchase. The seller keeps a copy as proof the transaction was legitimately exempt.11South Carolina Legislature. South Carolina Code Title 12 Chapter 36 Section 12-36-2510 Without a valid certificate on file, the seller must collect and remit the full 6% sales tax.
The certificate only covers items that match your exempt status. A manufacturer buys production machinery tax-free but pays sales tax on office furniture. A farmer buys feed and fertilizer without tax but owes tax on a laptop for the farmhouse. Vendors are not required to accept a certificate they believe is being misused, and a seller who honors an invalid or expired certificate can end up liable for the uncollected tax.
For one-time purchases where you do not have a blanket certificate on file with a vendor, fill out the ST-8 single-sale certificate on the spot. It stays with the vendor as their audit documentation.
Your certificate applies to out-of-state and online purchases as well. If a remote seller does not collect South Carolina tax, use tax normally kicks in at the same 6% rate on taxable goods brought into the state, and your certificate covers use tax on qualifying items. Since South Dakota v. Wayfair, most large online retailers collect South Carolina sales tax, so provide your certificate proactively when setting up accounts with online suppliers or you will see tax added to orders.
Records to Keep Once You Have the Certificate
SCDOR can audit to verify that exemptions are being used correctly.12South Carolina Legislature. South Carolina Code Title 12 Chapter 36 Section 12-36-1350 As a buyer, keep invoices and receipts showing the purchase date, seller information, a description of the items, and how they qualify under your specific exemption. Organize them by tax year.
If you also sell as an exempt organization or accept certificates as a vendor, store copies of every certificate you accept along with matching sales records for at least three years. If you cannot produce a valid certificate during an audit, SCDOR can assess the uncollected tax against you along with interest and penalties.
Misusing an exemption certificate is not a paperwork slip. SCDOR can revoke the certificate, assess the tax that should have been paid, and add penalties and interest; deliberate fraud can bring criminal exposure. A license that has been revoked cannot be replaced until outstanding liabilities are satisfied.13South Carolina Legislature. South Carolina Code Title 12 Chapter 54 Section 12-54-90
If Your Application Is Denied or Your Certificate Is Revoked
You have 90 days from the date on the notice to file a written protest.14South Carolina Department of Revenue. Appeals Process Miss that deadline and you can lose the right to appeal entirely.
The protest must include your name, mailing address, taxpayer identification number, the matter in dispute, a statement of the facts supporting your position, and any legal authority you rely on. File online, use SCDOR’s Form C-245, or write a letter that covers the same points. SCDOR’s Appeals Section will typically schedule a meeting within 60 days. If that does not resolve the issue, the case moves to SCDOR’s General Counsel, and if you still disagree with the final determination you can request a contested case hearing before the Administrative Law Court within 30 days.15South Carolina Department of Revenue. Information Guide – State Tax Appeal Procedures