The South Carolina Department of Revenue has submitted a Public Draft for comment, “Sales to Government Employees, Foreign Diplomats, and Other Similar Employees While on Official Business (Sales, Use and Accommodations Taxes).”

The purpose of the 16-page update is to inform retailers that federal government employees are using new credit cards to purchase tangible personal property and sleeping accommodations. The General Services Administration’s SmartPay2 Charge Cards illustrated in SC Revenue Ruling #15-11 were replaced in November 2018 with GSA SmartPay3 Charge Cards. The SmartPay3 contract period ends Nov. 29, 2022, unless renewed.

The advisory opinion concerns the application of the sales and use tax to sales of tangible personal property and sleeping accommodations to federal, state and local government employees, foreign diplomats, federal credit union employees, and nonprofit organization employees.

South Carolina law exempts certain government and business-related sales from South Carolina tax, as specified in Code Section 12-36-2120.

The advisory opinion released on Aug. 13, 2019, provides guidance concerning the taxability of sales to:

  • employees of the federal government, including instrumentalities of the federal government, such as the American Red Cross or federal credit unions
  • foreign diplomats (including Taipei officials)
  • other similar employees, such as employees of nonprofit organizations or state governments and colleges.

While it is clear that South Carolina is not permitted to impose a tax directly on the federal government, questions often arise when a federal government employee is making work-related purchases. Similar questions arise about the taxation of sales of tangible personal property, accommodations and food when a foreign diplomat stationed in the United States, or a state employee, or nonprofit employee is making purchases in South Carolina. In general, the applicability of the sales and use tax with such employees depends upon whether the government or nonprofit organization is making the purchase or the employee.

The comment close date is Tuesday, Aug. 27. A conference, if requested by the comment close date, would be Sept. 3 at 10 a.m. You can submit a comment or request a conference by emailing

The tracker for all the SCDORS’s advisory opinions can be found at