SC Department of Revenue
Sales Tax May be Due on Online Holiday Purchases




Public Affairs Office

Contact: Danny Brazell

Phone: (803) 898-5464








COLUMBIA, S.C. Shopping online may save you some time, and it may even save you some money, but it may not necessarily save you from your sales and use tax obligation to the state.


You will owe South Carolina a 5 percent use tax on your out-of-state purchase whether it is an online purchase or one from a catalog or TV infomercial if you have not paid another state an amount equal to South Carolina's sales and use tax. And if you live in a county that has a local sales and use tax, you will owe that as well. If your purchase receipt shows that you have paid a sales tax to another state equal to South Carolina's rate, you will not be taxed again.


The use tax, which is the name for the tax due on out-of-state purchases where merchandise is either delivered to a purchaser or brought back to the state by the purchaser, is not a new tax and has been part of South Carolina's tax system since 1951, the year the sales tax law was passed. The use tax prevents South Carolina merchants, who must collect the state's sales tax, from being placed at a competitive disadvantage to out-of-state retailers who may not be collecting the tax. And for that reason, every state that has a sales tax also has a use tax.


Like the South Carolina sales tax, use tax revenues are used exclusively to fund the state's education initiatives, adding to the importance of collecting the tax. In recent years, the Department of Revenue has stepped up efforts to educate taxpayers on the use tax law and to ensure the tax is reported and paid. Taxpayers who fail to pay the use tax on their out-of-state purchases could have penalties and interest added to their tax bills once the department establishes the tax is owed.  


The use tax can be conveniently, and somewhat painlessly, paid at the time a taxpayer files their SC1040 or SC1040A individual income tax return by entering the amount of use tax owed on the use tax line of the tax return. By doing so, the taxpayer simply increases their balance-due or decreases their refund by the amount of use tax owed. Taxpayers can also download Form UT-3 from the revenue department website,, and mail the amount owed to the Department of Revenue.


For information on the use tax, call the Department of Revenue at (803) 898-5728 or visit


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