South Carolina Tax Changes - October 2024

Week Of 10.07.2024

South Carolina Cigarette, Alcohol & Miscellaneous Taxes—South Carolina updates guidance on tax exemption for sale of beer and wine to military.

The South Carolina Department of Revenue (DOR) has issued updated guidance on S.C. Code § 12-21-100, which exempts the sale of certain articles (including beer and wine) from tax that are sold to the United States, for military use. Previously, the DOR guidance mandated taxpayers to file an affidavit along with the taxpayer's monthly beer or wine tax return. Since then, the Department has developed its own standard affidavit, the Affidavit for Sales of Beer/Wine to the Military (Form L-BW-603) for taxpayers to use when reporting exempt sales pursuant to Code Section 12-21-100. The information letter provides a sample of the new affidavit and instructions on how to file. (South Carolina Information Letter No. 24-18, 10/08/2024.)

South Carolina Corporate Income Tax—South Carolina provides tax relief for those affected by Hurricane Helene.

In response to Hurricane Helene, the South Carolina Department of Revenue (DOR) is granting relief to South Carolina taxpayers. Several returns and payments originally due between September 25, 2024 and May 1, 2025, are now due May 1, 2025. The DOR will automatically provide relief to affected taxpayers, and the relief applies to all 46 South Carolina counties and follows the IRS's decision to issue relief due to the storm. The following returns and payments are now due May 1, 2025: (1) 2023 income tax returns from individuals, businesses, and tax-exempt organizations who had a valid extension to file their returns. (Note: tax payments related to 2023 individual income tax returns were due on April 15, 2024, and therefore those payments are not eligible for this relief); (2) 2024 income tax returns from individuals, businesses, and tax-exempt organizations, including business income tax returns originally due March 15, 2025, and individual income tax returns and payments originally due April 15, 2025; (3) Quarterly estimated income tax payments originally due on December 16, 2024, January 15, 2025, and April 15, 2025; and (4) Quarterly withholding tax returns originally due on October 31, 2024, January 31, 2025, and April 30, 2025. Due dates that were extended to February 3, 2025 under the tax relief due to Hurricane Debby are now further postponed to May 1, 2025. The May 1, 2025 relief does not apply to other state taxes administered by the DOR. (South Carolina Information Letter No. 24-17, 10/07/2024; SCDOR Issues Tax Relief Due to Hurricane Helene, S.C. Dept. Rev. 10/07/2024.)

South Carolina General Administrative Provisions—South Carolina provides tax relief for those affected by Hurricane Helene.

In response to Hurricane Helene, the South Carolina Department of Revenue (DOR) is granting relief to South Carolina taxpayers. Several returns and payments originally due between September 25, 2024 and May 1, 2025, are now due May 1, 2025. The DOR will automatically provide relief to affected taxpayers, and the relief applies to all 46 South Carolina counties and follows the IRS's decision to issue relief due to the storm. The following returns and payments are now due May 1, 2025: (1) 2023 income tax returns from individuals, businesses, and tax-exempt organizations who had a valid extension to file their returns. (Note: tax payments related to 2023 individual income tax returns were due on April 15, 2024, and therefore those payments are not eligible for this relief); (2) 2024 income tax returns from individuals, businesses, and tax-exempt organizations, including business income tax returns originally due March 15, 2025, and individual income tax returns and payments originally due April 15, 2025; (3) Quarterly estimated income tax payments originally due on December 16, 2024, January 15, 2025, and April 15, 2025; and (4) Quarterly withholding tax returns originally due on October 31, 2024, January 31, 2025, and April 30, 2025. Due dates that were extended to February 3, 2025 under the tax relief due to Hurricane Debby are now further postponed to May 1, 2025. The May 1, 2025 relief does not apply to other state taxes administered by the DOR. (South Carolina Information Letter No. 24-17, 10/07/2024; SCDOR Issues Tax Relief Due to Hurricane Helene, S.C. Dept. Rev. 10/07/2024.)

South Carolina Personal Income Tax—South Carolina provides tax relief for those affected by Hurricane Helene.

In response to Hurricane Helene, the South Carolina Department of Revenue (DOR) is granting relief to South Carolina taxpayers. Several returns and payments originally due between September 25, 2024 and May 1, 2025, are now due May 1, 2025. The DOR will automatically provide relief to affected taxpayers, and the relief applies to all 46 South Carolina counties and follows the IRS's decision to issue relief due to the storm. The following returns and payments are now due May 1, 2025: (1) 2023 income tax returns from individuals, businesses, and tax-exempt organizations who had a valid extension to file their returns. (Note: tax payments related to 2023 individual income tax returns were due on April 15, 2024, and therefore those payments are not eligible for this relief); (2) 2024 income tax returns from individuals, businesses, and tax-exempt organizations, including business income tax returns originally due March 15, 2025, and individual income tax returns and payments originally due April 15, 2025; (3) Quarterly estimated income tax payments originally due on December 16, 2024, January 15, 2025, and April 15, 2025; and (4) Quarterly withholding tax returns originally due on October 31, 2024, January 31, 2025, and April 30, 2025. Due dates that were extended to February 3, 2025 under the tax relief due to Hurricane Debby are now further postponed to May 1, 2025. The May 1, 2025 relief does not apply to other state taxes administered by the DOR. (South Carolina Information Letter No. 24-17, 10/07/2024; SCDOR Issues Tax Relief Due to Hurricane Helene, S.C. Dept. Rev. 10/07/2024.)

Week Of 09.30.2024

South Carolina General Administrative Provisions—South Carolina updates ACH Credit Instructions.

The South Carolina Department of Revenue has issued a revised ACH Credit Instructions Manual, which provides information on which businesses can use this payment program, what types of taxes can be paid using this method, and how to request an ACH Credit Approval. (ACH Credit Instructions Manual, S.C. Dept. Rev., 09/01/2024.)

South Carolina Supreme Court Reverses Tax Sale

The South Carolina Supreme Court reversed a South Carolina Court of Appeals decision that found that a county tax collector had adequately posted a notice of levy. (Massenberg v. Clarendon Co. Treasurer, et al., S.C. S. Ct., Dkt. No. 2023-000098, 08/21/2024.)

History. The taxpayer inherited in 1997 a 2.54-acre tract of undeveloped densely forested land in a rural area. The taxpayer paid all taxes related to the property through 2015, but she failed to pay the property taxes for 2016. The tax collector in accordance with S.C. Code Ann. § 12-51-40 sent a "notice of delinquent property taxes" by regular mail to the taxpayer's permanent address in Charlotte, North Carolina, and another notice by certified mail. The certified mail notice was returned undelivered, therefore statutorily the tax collector was required to "take exclusive physical possession of the property... by posting a notice at one or more conspicuous places on the premises." The tax collector hired a private contractor to do the posting, but gave no information, no instruction, and no guidance as to how to—or even whether to—post the notice in a "conspicuous" place. The property was sold, and the taxpayer filed an action to set aside the tax sale, alleging the tax collector failed to post the Notice of Levy in a conspicuous place as required by statute. The master-in-equity found that the notice was properly posted but did not address whether the location was "conspicuous," and the court of appeals affirmed.

Holding. The court noted that determining whether the place of posting notice was "conspicuous" is a judgment call. S.C. Code Ann. § 12-51-40(c) requires the county official statutorily charged with the duty of complying with the "strict" requirements of the statute to exercise that judgment. Here, the court found that the county tax collector exercised no judgment, but entrusted the responsibility to a private contractor, giving that contractor no information, instruction, or guidance before the contractor carried out the posting and no review after it was carried it out. In addition, there was no evidence that the contractor even knew of the "conspicuous place" requirement.

When analyzing the location of the Notice of Levy in the context of the general layout of the taxpayer's property, it was clear to the court that the notice was not posted in a conspicuous place. The property faced two public roads: one was a two-lane lined and paved road and the other was a one-lane dirt road with insufficient width for even two cars to pass at the same time. The contractor—with no explanation—chose to post the Notice of Levy to a tree facing the dirt road on the back side, as if the person was trying to make the posting inconspicuous. The court agreed that the tax collector failed to post the notice in a conspicuous place as required by statute. The tax collector thus failed to "take exclusive physical possession of the property" and all subsequent steps in the process of carrying out the tax sale were invalid. Therefore, the decision of the court of appeals was reversed.

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