South Carolina Use Tax: Rate, $500 Vehicle Cap, and Filing

South Carolina’s use tax is a 6% tax on tangible personal property you buy from outside the state and bring home to use, store, or consume here, when the seller didn’t collect South Carolina sales tax at the time of purchase. It exists so out-of-state retailers don’t get a built-in price advantage over local businesses. Online orders, catalog purchases, and things you buy while traveling can all trigger it.¹

When You Owe Use Tax

The obligation starts the moment you acquire tangible personal property for use in South Carolina without paying South Carolina sales tax on it. That covers online purchases from retailers that don’t charge the state’s tax, items shipped from a catalog, goods bought at an out-of-state auction, and things you carry home from a trip.²

Since the 2018 Supreme Court decision in South Dakota v. Wayfair, remote sellers that meet South Carolina’s economic nexus threshold must get a retail license and collect sales tax on orders shipped into the state. So far more online purchases now arrive with the tax already applied. When a remote seller doesn’t charge it, the responsibility shifts to you.³

A practical habit: check every out-of-state receipt. If you see a line for South Carolina sales tax, you’re covered. If you don’t, that purchase likely owes use tax.

The Rate

The statewide use tax rate is 6%, matching the state sales tax rate. The rate you actually pay depends on where the item is delivered or first used, because most counties add local sales taxes for schools, transportation, and capital projects. Combined rates run 7%, 8%, or 9% in some areas.⁴

The Department of Revenue publishes current rate tables by county. Use the rate for the county where the item lands, not where it was purchased.

The $500 Cap on Vehicles, Boats, and Aircraft

South Carolina caps the sales and use tax on certain high-value items at $500 per transaction, applied at a 5% rate instead of the standard 6%. The cap covers motor vehicles, motorcycles, recreational vehicles, boats, watercraft motors, aircraft, certain trailers, self-propelled light construction equipment up to 160 net engine horsepower, and horse trailers.⁵

Buy a $40,000 boat in Florida and bring it to South Carolina and you don’t owe $2,400 in use tax. You owe $500. If you’re making a major out-of-state purchase, this is the single most valuable rule to know. Motor vehicles registered with the DMV are also subject to a separate infrastructure maintenance fee that follows its own $500 cap.⁵

Exemptions

South Carolina exempts several categories of goods under Section 12-36-2120. Two matter most for everyday buyers:

Unprepared food. Groceries that qualify for purchase with USDA food stamps are exempt from the state 6% tax. The exemption applies only to the state portion; some local taxes still apply, though several counties exempt groceries from their local levies as well.⁶
Prescription medicines and medical supplies. Prescription drugs, prosthetic devices, insulin, diabetic testing supplies, and certain disposable medical supplies used outside a hospital setting are all exempt.⁶

Credit for Tax Paid to Another State

If you already paid sales or use tax to another state on the same item, South Carolina gives you a dollar-for-dollar credit against your use tax bill. When the other state’s tax equals or exceeds what South Carolina would charge, you owe nothing further. When the other state’s rate was lower, you pay the difference.²

Keep the receipts showing the tax paid in the other state. You’ll need them to claim the credit, and the Department of Revenue can request documentation during a review.

Digital Goods and Streaming

South Carolina’s rules here surprise people. Software delivered entirely by electronic download is generally not subject to sales or use tax, as long as no part arrives on a physical medium like a disc or flash drive. Streaming services follow a different rule. Charges for streaming television, movies, music, and similar content are taxable as communication services, whether you pay by subscription, per item, or per event.⁷

Most major streaming platforms already collect South Carolina sales tax on your subscription. If a smaller service doesn’t, you technically owe use tax on those charges. South Carolina also treats SaaS (software-as-a-service) subscriptions as taxable.

How to Report and Pay

Individual residents have three options. You can report use tax on your SC1040 individual income tax return, which is the simplest route since you file it annually anyway. You can file a standalone Use Tax Return (Form UT-3). Or you can report and pay through the MyDORWAY online portal.⁸

If you report on your SC1040, the use tax follows the same April filing deadline as your income tax return. If you use Form UT-3, the return and payment are due by the 20th of the month following the purchase.⁹ Don’t submit a UT-3 and then also report the same amount on your SC1040.

MyDORWAY is the Department of Revenue’s free online portal where you can file returns and pay from a checking or savings account, or by credit card. It’s the fastest way to handle a one-off use tax payment without waiting for your annual return.¹⁰ Paper filers can mail a check with the completed UT-3.

What to Gather Before Filing

Pull together purchase receipts, invoices, and shipping confirmations for out-of-state purchases during the reporting period. Each document should show the purchase price and whether any tax was collected. If you paid sales tax to another state, keep proof so you can claim the credit.

The math is straightforward. Total the prices of all taxable items, multiply by your combined state and local rate, then subtract any credit for taxes already paid elsewhere. That’s your use tax due.

Penalties and Interest if You Don’t Pay

Ignoring use tax doesn’t make it disappear, and the penalties compound. Two separate charges can stack:

Late filing: 5% of the tax due for each month or partial month the return is late, capped at 25%.¹¹
Late payment: 0.5% of the unpaid tax for each month or partial month the payment is overdue, also capped at 25%.¹¹

Interest accrues on top of both penalties. South Carolina ties its interest rate to the federal underpayment rate, currently 7% annually through at least March 2026.¹² Interest runs from the date the tax was due until you pay in full.¹³

Negligence adds a penalty of 5% of the underpayment plus 50% of the interest owed. Fraud triggers 75% of the underpayment attributable to fraud, plus 50% of the interest.¹¹

How Long to Keep Records

South Carolina generally has 36 months from the date a return was filed (or due, whichever is later) to assess additional tax. That window extends to 72 months if you understate your total tax liability by 20% or more. If you never file a return at all, there is no time limit; the Department of Revenue can come after the tax at any point.¹⁴

A special rule applies to use tax. If the Department receives information from another state’s tax authority, a regional tax organization, or the federal government, it can assess use tax within 12 months of receiving that information, even if the standard period has passed. The outer boundary is still 72 months from the original due date.¹⁴

Hold onto out-of-state purchase records for at least six years. If you never reported the use tax, keep them indefinitely.

1
South Carolina Department of Revenue. Use Tax
2
South Carolina Legislature. South Carolina Code 12-36-1310 – Imposition of Tax; Rate; Applicability; Credit for Tax Paid in Another State
3
South Carolina Department of Revenue. Remote Sellers
4
South Carolina Department of Revenue. Sales and Use Tax Index
5
South Carolina Department of Revenue. Chapter 10 – Maximum Tax Items
6
South Carolina Legislature. South Carolina Code 12-36-2120 – Exemptions from Sales and Use Tax
7
Avalara. State-by-State Guide to the Taxability of Digital Products
8
South Carolina Department of Revenue. Use Tax Payment Return UT-3
9
South Carolina Department of Revenue. Sales Tax
10
South Carolina Department of Revenue. MyDORWAY
11
South Carolina Legislature. South Carolina Code Title 12 Chapter 54 – Section 12-54-43
12
South Carolina Department of Revenue. SC Information Letter 25-22
13
South Carolina Legislature. South Carolina Code Title 12 Chapter 54 – Section 12-54-25
14
South Carolina Legislature. South Carolina Code Title 12 Chapter 54 – Section 12-54-85