Free guide for contractors
Do contractors charge sales tax in South Carolina?
General information, not tax advice. Tax rules change and depend on the details of each job. Confirm how they apply to your business with your accountant or the state's revenue department before relying on them.
SC South Carolina
Usually no tax on the invoiceNo, for construction work. South Carolina contractors are the consumers of what they buy, unless they are really retailers making sales and installations.
In South Carolina a construction contractor is the user or consumer of everything it buys, and pays tax on building materials.
A retailer making sales and installations is different: it taxes the materials, but separately stated, reasonable installation labor is not taxed. Whether a business is a retailer or a contractor depends on the facts, such as advertising, a showroom, licensing, subcontract work and how materials are priced on the invoice.
The statewide rate is 6%.
It turns on: whether the business is a construction contractor or a retailer making sales and installations; for a retailer, whether installation labor is separately stated.
Watch out for
- Materials that become federal property under a written federal contract are exempt; state and local government projects are not (SC Manual ch. 16; S.C. Code 12-36-2120).
- The Department's manual cites Lowe's Home Center v. SCDOR (Ct. App. 2024) on when a business is a retailer rather than a contractor (SC Manual ch. 16).
“A construction contractor is the user or consumer of everything he buys.”SC Sales and Use Tax Manual, ch. 16