The Tax Break Nobody Knows About

September 15, 2015

Citizen Scoops

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YOU MIGHT BE ENTITLED TO A TAX
BREAK ON THAT PURCHASE.
BUT DON’T EXPECT ANYBODY TO KNOW IT.

Two weeks ago, Stanley Oswald wrote to us about several gas stations in Pelion charging a 1 cent sales tax on items that are supposed to be exempt from sales tax. That story sparked several responses, including promises to investigate the matter from more than one state lawmaker. Among responses from citizens, this one – sent to us by mail – caught our attention.

The Nerve recently published something by a Pelionian who was upset about being charged an extra cent for his diet soda. He claims he contacted the Department of Revenue and got no response.

This reminds me of a futile battle at check-out counters for the one-percent tax break state legislators awarded folks 85 and older many years ago. The law stated that retailers were to post at registers or at doorways a notice stating that persons 85 or older were, upon showing proper ID, to be charged 5 percent state sales tax, not 6 percent.

This is a savings of a dollar on every $100 spent. Worth asking for, I thought. It resulted in a lot of embarrassment as check-out clerks had to call their managers, etc., It’s a great way to make others in line hate you.

I dropped the governor a line suggesting she investigate a little publicity to let everyone know the tax break still exists. One of her assistants said it would be better to contact the Department of Revenue. I wrote DOR, but nothing happened.

This ridiculous two-tier tax is little publicized, but it might get some notice when Amazon.com starts charging a 6 percent sales tax on South Carolina next year and we octogenarians make a substantial demand for the 5 percent tax prescribed by state law.

Although I don’t live in Lexington County, there are plenty of octogenarians who do. It might be beneficial if one of the Senate’s brightest stars reminded them they are not obligated to pay a 6 percent sales tax if they are 85 or older. Their obligation is 5 percent.

Regards,

John Wrisley
Columbia

We checked the law code and discovered that Mr. Wrisley is correct. Not only are retailers required to post the notice; they may be punished if they don’t. Here’s the relevant section:

SECTION 12-36-2646. Retailers to post notice of tax exclusion available to individuals 85 years of age or over; penalties.

(A) Retailers shall post a sign at each entrance or each cash register which advises individuals eighty-five years of age or older of the one percent exclusion from tax available under Sections 12-36-2620, 12-36-2630, and 12-36-2640.

(B) A retailer who fails to post the required signs is subject to a penalty of up to one hundred dollars for each month or portion of the month the sign or signs are not posted. Continued failure to post the signs after a written warning from the Department of Revenue may result in revocation of the retailer’s retail license in accordance with Section 12-54-90. Failure to post the signs does not give rise to a cause of action by an individual eighty-five years of age or older who failed to request the exclusion and provide proof of age at the time of sale.

HISTORY: 2001 Act No. 89, Section 50(D), eff August 15, 2001.

Back in 2001 a lawsuit forced the state to pay seniors $7.5 million owed to them because of the law. We are unaware of the law being updated since then.

In any case, we agree with Mr. Wrisley. The law is a cruel joke. There is no enforcement mechanism – hence the 2001 lawsuit – and we’d like to know if anyone has ever been told to display the “sign at each entrance or each cash register.” It appears, anyway, that no one will abide by this law without being prodded by an ancient consumer who likely doesn’t have the physical energy or wherewithal to go around demanding that retailers follow state law. We suspect the law was originally passed merely in order to please a special interest group (we will not name names), but we doubt even that interest group could be happy with the result – octogenarians starting minor kerfuffles at the front of check-out lines, managers frightened by the thought DOR fining them for failing to post notices of a law they’ve never heard of, and so on.

It’s all unfortunately typical of the state’s exemption-ridden sales tax law. At 6 percent (and up to 9 percent depending on the locality), South Carolina’s is the 18th highest in the nation – an especially high ranking given the state’s low per capita income (currently 42nd). Rather than getting rid of the exemptions and lowering the rate on everyone, though, South Carolina lawmakers would rather keep enjoying the power to grant special exemptions to the companies and industries they happen to like.

Meanwhile, a note to retailers: If Mr. Wrisley asks for his extra percent, do what he says. Please.