South Carolina Code of Regulations › Chapter 117 - DEPARTMENT OF REVENUE › Article 11 - SALES AND USE TAX REGULATIONS › Section 117-309.8 - Undertakers

Current through Register Vol. 48, No. 6, June 28, 2024
Caskets, grave vaults, shrouds, and other tangible personal
				property furnished by undertakers and funeral directors in rendering burial
				services are sold by them at retail. These sales are subject to the sales
				tax.
Where there is a separation of services from the sale of
				tangible personal property in invoices rendered, and where receipts from sales
				and receipts from services are properly identified on the books and records of
				the undertaker, the sales tax will not apply to receipts accruing from the
				rendering of such services as embalming, hearse service, transportation of
				family, etc.
In complying with the provision for the separation of charges,
				a detailed itemization is not required. A separation, listing items such as
				caskets, vaults, embalming, hearses, and other expenses, without indicating the
				amount of each item, but indicating the total amount of the charge, and then
				indicating the amount of the sales tax would be in compliance with the
				department's determination, if the invoice also contains a statement evidencing
				the separation of the charges. As an example, if the sale of the tangible
				personal property amounts to 50 percent of the total charge, then a statement
				may be shown on the invoice such as: "For purposes of calculating the South
				Carolina sales tax, 50 percent of the above charge is determined to be subject
				to the sales tax as being the sale of tangible personal property."
The department is not saying that 50 percent, or any other
				percentage, is to be used as a basis of separating the sale of tangible
				personal property from the sale of service.
Several methods have been approved by the division when
				percentages are used. There are predicated on (1) The funeral director must
				establish a fair and reasonable percentage to assure the state of at least the
				correct amount of the tax. (2) Auditable records must be maintained to enable
				verification of the accuracy of the percentage used, and (3) The invoice to the
				customer must have imprinted thereon (by stamp or some other designation) the
				method used in computing the tax.
South Carolina undertakers and funeral directors incur sales
				and/or use tax liability by reason of sales and service rendered in South
				Carolina, regardless of the situs of interment. Out-of-state undertakers and
				funeral directors incur no sales and/or use tax liability to South Carolina
				when the only business the out-of-state funeral director or undertaker has
				within this state is the rendering of burial service.
Where undertakers and funeral directors service burial
				insurance policies, the measure of the sales tax is the total of receipts from
				all sources accruing to the undertaker as a result of his furnishing tangible
				personal property. In some instances the undertaker furnishes caskets or other
				property, the sales price of which is in excess of the amount covered by the
				insurance policy, which excess is paid by the family of the deceased. In these
				instances the total sales price of the substituted property is to be used as
				the measure of the tax.
Where the undertaker is also the insurer, his use of property
				in servicing his insurance policies is not a sale of such property. In these
				instances the undertaker is the purchaser at retail of the property used on
				which he owes either sales or use tax at the time he purchases the
				property.
Undertakers purchase property, which they sell at retail as
				stated above, at wholesale, tax-free.
Undertakers purchase at retail consumable supplies, equipment,
				and property furnished in servicing their own insurance contracts, which
				consumable supplies and equipment are taxable to them at the time of purchase,
				including hearses, ambulances, instruments, tools, fixtures, furniture, all
				other equipment, embalming fluids, chemicals of all kinds, and all other
				supplies.