South Carolina Sales Use Taxes—Transportation tax guidelines.
The South Carolina Department of Revenue (DOR) has issued guidelines to counties who are considering imposing, or are currently imposing, a transportation tax. The transportation tax is administered and collected by the DOR in the same manner that other sales and use taxes are collected. The DOR will use these guidelines to assist in determining whether certain costs are considered a proper expenditure of local transportation tax revenue under the Transportation Act, S.C. Code Ann. § 4-37-30. The Transportation Act provides that the types of projects permitted to be funded with transportation tax revenues are highways, roads, streets, bridges, mass transit systems, greenbelts, and other transportation-related projects facilities. The ordinance imposing the tax must specify the projects to be funded from the transportation tax, the estimated capital costs of the projects, and other information as specified in the statute. The guidelines explain what a “capital cost,” (i.e. “eligible costs”) and include direct costs or indirect costs, as well as certain operational costs relating to mass transit systems. “Direct costs” are expenditures for material, labor, and financing for transportation-related projects that would be properly chargeable to a capital asset account as distinguished from current expenditures and ordinary maintenance expenses. “Indirect costs” are costs that benefit (1) the construction and improvement of authorized projects or (2) the construction and improvement of authorized projects and other county operations; generally only a portion are eligible costs. ”Mass transit systems costs” include costs incurred for the acquisition, design, construction, equipping, and operation of mass transit systems, provided that such costs are consistent with the public purpose of the Transportation Act, the county’s imposition ordinance, and the referendum approved by voters. The guidelines provide examples of each type of cost, as well as ineligible costs. ( South Carolina Revenue Ruling No. 22-2, 04/18/2022.)
South Carolina Sales Use Taxes—Transportation tax
