South Carolina – Private Letter Ruling #20-4 Sales and Use Tax: Software Subscription Service Was Taxable


A Private Letter Ruling is an advisory opinion issued to a specific taxpayer by the Department to apply principles of law to a specific set of facts or a particular tax situation.

Private Letter Ruling issued May 18, 2020:

QUESTIONS

  1. Are charges by XYZ, Inc. to customers for its online software subscription service, as described in the facts, subject to the sales and use tax? 
  2. Are charges by XYZ, Inc. to customers for training, as described in the facts, subject to the sales and use tax? 

CONCLUSIONS

1. Charges by XYZ, Inc. to customers for its online software subscription service, as described in the facts, are subject to the sales and use tax under Code Sections 12-36-910(B)(3) and 12- 36-1310(B)(3). 

2. Charges by XYZ, Inc. for training, as described in the facts, that are made in conjunction with, or as part of the sale of, its online software subscription service are includable in “gross proceeds of sales” or “sales price” and, therefore, subject to the tax. Charges by XYZ, Inc. for training, as described in the facts, that are not made in conjunction with, or as part of the sale of, its online software subscription service are not includable in “gross proceeds of sales” or “sales price” and, therefore, not subject to the tax. 

Read the complete ruling issued by the South Carolina Department of Revenue here.


For more information visit: dor.sc.gov

South Carolina Department of Revenue
May 18, 2020