South Carolina’s food tax system splits down a simple line: unprepared groceries walk free from state tax, while prepared meals pay the full freight. That distinction sounds straightforward until you’re standing at a deli counter deciding whether plastic forks make your sandwich taxable.
For food businesses, whether brick-and-mortar or shipping across state lines, this creates genuine compliance headaches. State exemptions collide with local tax patchwork across 46 counties. A rotisserie chicken pays different rates than the raw bird sitting ten feet away.
Hands Off Sales Tax (HOST) has spent 25+ years untangling exactly these scenarios. We handle nexus analysis, registration, filing, and audit defense so you can focus on feeding customers instead of decoding tax codes.
What Is South Carolina Sales Tax on Food?
South Carolina draws a hard line between unprepared food (groceries) and prepared food (ready-to-eat meals).
Unprepared food escapes the state’s 6% sales tax entirely. Fresh produce, raw meat, dairy, bread, canned goods, anything requiring home preparation gets the exemption. Think “food stamp eligible” and you’ve got the right category.
But here’s the catch: local taxes may still bite. Counties impose their own 0-3% rates, and whether groceries face these depends on which specific local tax voters approved. Some exempt food explicitly; others don’t.
Prepared food faces the complete bill: 6% state plus 0-3% local, creating combined rates from 6% to 9%. But restaurants and food service establishments face an additional layer: hospitality taxes imposed by many counties and municipalities, ranging from 1% to 2.5%. This brings total taxation on restaurant meals to 11.5% in Myrtle Beach, 8% in Charleston and Columbia, and 7% in Greenville.
The definition gets messy. Food sold hot, combined by the seller for immediate consumption, or sold with utensils provided by the seller all qualify as prepared. That cold sandwich becomes taxable the moment you set plastic forks nearby, even if customers ignore them.
Breaking Down Food Categories
Grocery Store Items (State Tax-Free)
These items dodge the 6% state rate:
- Fresh fruits, vegetables, raw proteins
- Dairy products, eggs, bread, cereals
- Canned and frozen foods
- Baby formula
- Seeds and plants for home vegetable gardens
Local taxes might still apply depending on county ordinances. That raw chicken breast? State-exempt. The rotisserie version? Full state plus local rates.
Restaurant Meals and Prepared Foods (Full Taxation)
Six percent state plus local rates hit:
- All restaurant dining
- Food trucks and catering
- Hot deli items and prepared sandwiches
- Salad bars eaten on-site
Candy, Soft Drinks, and Supplements
South Carolina breaks from most states here. Candy and soft drinks get treated as groceries. State-exempt, though local taxes may apply. A candy bar receives the same tax treatment as a loaf of bread.
Dietary supplements with supplement facts panels (not nutrition facts) typically escape taxation entirely.
Alcoholic Beverages
Alcohol plays by different rules. Beer, wine, and spirits pay 6% state plus local taxes at retail. Restaurant drinks face the same. Additional excise taxes get buried in wholesale prices rather than itemized separately.
Local Tax Complexity
Forty-three of South Carolina’s 46 counties impose local sales taxes. Combined local rates reach 3% in some areas.
Whether these touch groceries depends entirely on the specific tax type. Education Capital Improvement Tax exempts unprepared food. Some Transportation Taxes do too. Others don’t include food exemptions at all.
This creates wild variation. Groceries in one county face 1-2% local tax. Cross the county line and pay nothing. Prepared food always catches the full combined rate.
E-commerce sellers shipping food face nightmare-level complexity: classify products correctly, validate customer addresses, determine which local taxes apply, and calculate rates that vary by jurisdiction and product type.
HOST’s nexus analysis identifies exactly where you have obligations, while our filing services ensure correct rates across every jurisdiction.
Where Businesses Get Tripped Up
Temperature and Presentation
Cold deli sandwich without utensils, packaged for later? State-exempt. Same sandwich heated or sold with a fork? Six percent state plus local.
Grocery stores running hot bars, rotisserie operations, and prepared sections must split-rate single transactions. The complexity is a daily operational reality.
Bakery Classification Nightmares
Bread for home consumption qualifies for exemption. Individual cookies sold with napkins for immediate consumption? Taxable. Wedding cakes consumed later off-premises? Generally exempt. Add plates and seating? Now it’s prepared food.
The Utensil Trap
South Carolina law explicitly includes “sold with eating utensils provided by the seller” in prepared food definitions.
Place cold sandwiches near checkout with complimentary plastic forks available? You’ve converted state-exempt groceries into 6% taxable items even if customers don’t take the forks. Many businesses unknowingly trigger higher rates through this mechanism.
Coffee Shop and Deli Complications
Coffee shops selling packaged cold sandwiches, salads, or cut fruit individually face full state rates even though the items are cold. The individual sale for immediate consumption triggers taxability. Bakery items sold by the slice with napkins? Taxable. The same items sold by the dozen for home consumption? State-exempt.
Business Delivery Creates Taxability
Food delivered to offices, businesses, hospitals, or institutions gets taxed at full state rates regardless of whether it would otherwise qualify as unprepared food. Catering services pay full prepared food rates no matter where consumption occurs. But selling party platters requiring customer assembly might qualify for state exemption. The distinction hinges on the preparation level performed by the seller.
Tax Exemptions Worth Knowing
SNAP/EBT purchases escape both state and local taxes. Point-of-sale systems must identify and exempt these automatically.
Tax-exempt organizations (churches, schools, nonprofits) can buy food tax-free with valid exemption certificates. The exemption covers organizational purchases, not resale to individuals.
Manufacturing ingredient exemptions prevent tax pyramiding. A bakery buying flour to bake retail bread purchases that flour tax-exempt.
Missing documentation during audits converts exempt sales into taxable ones instantly, creating unexpected liabilities.
Why E-Commerce Food Sellers Need Expertise
Post-Wayfair, South Carolina requires sales tax collection once you cross $100,000 in annual sales.
E-commerce food businesses must classify each product (unprepared vs. prepared), calculate correct local rates based on customer addresses across 46 counties, and determine whether specific local taxes apply to food.
Many automation tools default everything to 6% or misclassify items entirely. The result? Systematic over-collection damaging customer relationships or under-collection creating audit exposure.
Without proper classification and address validation, you face pricing issues from overcharging on groceries, audit liabilities from under-collecting, administrative burden managing documentation, and nexus uncertainty.
HOST’s Free Sales Tax Software Review audits your configuration to identify mistakes before they compound into serious problems.
HOST: Your South Carolina Food Tax Partner
Misclassifying products, applying wrong local rates, or maintaining inadequate documentation exposes businesses to audits, penalties, and lost revenue.
What HOST Delivers:
- Nexus Analysis: Pinpoint exactly where you’ve met thresholds across all states
- Registration: Complete South Carolina Department of Revenue and local jurisdiction paperwork
- Automated Filing: Prepare and file returns monthly, quarterly, or annually across all jurisdictions
- Product Classification: Ensure proper rate application under South Carolina law
- Audit Defense: Organize documentation and defend your position
- Notice Management: Interpret and respond to state notices
We’ve focused exclusively on sales tax since 1999. Founded by Mike Espenshade, with parent company TaxMatrix serving North America’s largest companies, we bring enterprise expertise to food sellers of all sizes.
Stop Wrestling With Tax Codes
South Carolina’s dual-system food tax demands precision in classification, rate calculation, and documentation. Every hour researching exemption distinctions or filing returns is an hour not spent growing your food business.
When you’re ready to ensure correct collection across all South Carolina jurisdictions, we’re ready to help. Contact HOST today to discuss your compliance needs.
Want to learn more? Get our “10 Sales Tax Mistakes E-Commerce Sellers Make” e-book.
Frequently Asked Questions
What is the sales tax rate on groceries in South Carolina?
Unprepared food escapes South Carolina’s 6% state tax. However, local taxes (typically 1-2%) may apply depending on the county and which specific local taxes that county imposed. Some local taxes exempt unprepared food; others don’t.
Do restaurants charge full sales tax?
Yes. Restaurant meals and prepared foods pay 6% state plus 0-3% local. Many jurisdictions add hospitality taxes (1-2.5%), bringing total rates to 11.5% in Myrtle Beach, 8% in Charleston and Columbia, or 7% in Greenville.
Is candy taxed differently than groceries?
No. Unlike most states, South Carolina treats candy and soft drinks as groceries. State-exempt, though local taxes may apply.
How do local taxes affect food purchases?
Whether local taxes hit unprepared food depends on which specific tax type the county imposed. Education Capital Improvement Tax exempts food; other taxes might not. Prepared food always pays full state and local rates.
Do businesses charge different rates for hot and cold food?
Yes. Cold sandwiches sold without utensils for later consumption may be state-exempt. Hot foods or items sold with utensils pay 6% state plus local rates.
Are SNAP/EBT purchases taxed?
No. Food purchased with SNAP/EBT benefits escapes both state and local South Carolina sales tax.
Do seniors get sales tax discounts?
Yes. Individuals 85 years and older receive a 1% state tax reduction (paying 5% instead of 6%) on purchases for personal use, including prepared food. They must request the discount at time of sale and show proof of age.
