FREQUENTLY ASKED QUESTIONS AND LAW SUMMARIES
LICENSES TAXES - ELECTRIC POWER TAX
1. Define the electric power tax per the code.
The electric power tax is a tax imposed upon persons in the business of selling electric power. It is imposed at either the wholesale level and the retail level depending on who is selling the electric power and whether the electric power tax had been previously paid on the electric power. The tax is imposed based on the number of kilowatt hours of electric power sold. See Code Section 12-23-10.
2. How do you register to file and pay electric power tax?
To register to pay the electric power tax, contact the department's License and Registration Section at (803) 898-5872. The electric power tax is remitted to the department on or before the twentieth of each month. See Code Section 12-23-60.
3. What is the tax rate on electric power?
The tax rate for the electric power tax is five-tenths of one mill for each electric kilowatt hour of electric power sold either at the wholesale level and at the retail level (depending on who is selling the electric power and whether the electric power tax had been previously paid on the electric power). See Code Section 12-23-10.
4. Are there any specific exemptions in the code?
Code Section 12-23-20 provides the following exemptions from the electric power tax:
(1) Electric power manufactured or generated in another state and brought into this State until such power has lost its interstate character and immunities;
(2) Electric power or energy generated in the State by plants constructed after May 1, 1951 and exported to another state;
(3) any person owning and operating an electric manufacturing or generating plant of ten horsepower or less;
(4) any industrial plant manufacturing or generating power for its own use or for use upon its own premises by its bona fide operatives or employees, but the tax shall be paid upon so much thereof as may be sold to other than its employees;
(5) A municipality manufacturing or generating electricity for the use of its customers; or
(6) Electric power used in manufacturing or generating hydroelectric power and steam electric power, and electric power used in the operation of such electric power manufacturing or generating plants and auxiliary machinery and equipment necessary thereto; provided, that all such power that is used for generation of power, which is to be exempt from taxation shall be exempt only if it is metered; nor shall they apply:
(7) When the entire capital stock of a corporation owning and operating a plant manufacturing or generating electric power is owned by an industrial corporation, to such power as may be furnished by such generating corporation to such industrial corporation for use and consumption by such industrial corporation or for use upon the premises of such industrial corporation by its bono fide operatives or employees, but the tax shall be paid upon so much of such power as may be sold to other than such industrial corporation's employees.
(8) Electric power sold to industrial customers as a class in excess of the amounts of electric power sold to industrial customers as a class during the corresponding months of the State's fiscal year 1957 - 1958; but all sales of electric power to any class of customer other than industrial customers shall continue to be assessed and taxed as provided in this article. As used in this section, "industrial customers" shall mean that class of customer engaged in the business of manufacture, fabrication, processing and related work.
5. Is the South Carolina Public Service Authority exempt from the tax?
Section 12-23-130 exempts the S.C. Public Service Authority from the electric power tax and states:
Nothing contained in Sections 12-19-100, 12-19-110, 12-23-10, 12-23-20, or 12-37-220, shall be construed or interpreted to impose any tax liability on the S.C. Public Service Authority, and all property leased to and operated by the S.C. Public Service Authority for the generation or transmission of electric power shall, for all tax purposes, be considered the property of the Authority.
6. What is the specific criteria for determining who is an "industrial customer" under Code Section 12-23-20(8)?
Section 12-23-20 (8) states "Industrial customers shall mean that class of customers engaged in the business of manufacture, fabrication, processing and related work." Regulation 117-49 further states that the Department will use Division (D) Manufacturing, Standard Industrial Classification Manual, Bureau of the Budget, 1967 Edition, as a guide to classify "industrial customers" as used in the S.C. Code of Laws. Certain mining operations and cotton gins also qualify as industrial customers from Opinions of the Attorney General.
7. When is the electric power tax return due?
S. C. Code Section 12-23-60 states, "Every person subject to the provisions of this article shall on or before the twentieth day of each month make a true and correct return to the department...".
8. Is electricity sold by electric cooperatives taxable?
Yes, unless otherwise exempt under Code Sections 12-23-20 or 12-23-130.
9. Are industrial plants that generate their own electric power for their own use subject to the electric power tax?
No. Code Section 12-23-20(4) exempts from the electric power tax "[a]ny industrial plant manufacturing or generating power for its own use or for use upon its own premises by its bona fide operatives or employees." However, the tax is due with respect to any electric power sold to persons other than employees.
10. Are electric power sales by industrial plants to utility companies subject to the electric power tax?
Yes, unless previously taxed under Code Section 12-23-10 sales from an industrial plant to a utility company would be subject to the tax.
Note: Code Section 12-23-20 exempts from the tax electric power generated by an industrial plant for its own use on its own premises by bona fide operatives or employees, or sold to its employees.
11. Is electric power used in street lights and security lights taxable?
Yes, provided there was a sale of electric power.
12. Is electricity used for residential purposes subject to the electric power tax?
Yes. Electricity sold for residential purposes is subject to the electric power tax.