The South Carolina Department of Revenue has issued a pair of approved advisory opinions based on public drafts that were released in August. The first informs retailers that federal government employees are using new credit cards to purchase tangible personal property and sleeping accommodations, while the second address the applicability of the Sales and Use Tax to the Dual Party Relay Charge and the 911 Service Charge on customer’s telephone bills.

Revenue Ruling 19-7: “Sales to Government Employees, Foreign Diplomats, and Other Similar Employees While on Official Business”

This 16-page advisory opinion 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. RR19-7 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.

Revenue Ruling 19-8: “Universal Service Fund Surcharge, Dual Party Relay Charge, and 911 Service Charge”

This 9-page advisory opinion lays out an overview of the imposition and collection provisions of the Universal Service Fund Surcharge, the Dual Party Relay Charge, and the 911 Service Charge. It includes a chart that summarizes the application of the sales and use tax by type of service provider.

Customers frequently inquire why these charges are imposed and if they are taxes. Although these fees are not taxes, customers often contact the Department of Revenue for an explanation of the charges and any associated taxes imposed. Are they gross proceeds of sales of the telephone service provider and subject to sales and use tax? The purpose of this advisory opinion is to expand the scope of SC Revenue Ruling #03-1 to address the applicability of the sales and use tax to the Dual Party Relay Charge and the 911 Service Charge on customer’s telephone bills.

The tracker for all the SCDORS’s advisory opinions can be found at https://dor.sc.gov/policy/index/new-draft-advisory-opinions. To receive email alerts from the department’s Policy Division, sign up at dor.sc.gov/policy-news.