Bill > H5122

This bill proposes to exempt certain items sold to or used by internet access service providers and communications service providers from sales tax in South Carolina, treating these providers as manufacturers for this purpose. Specifically, supplies, technical equipment, machinery, and electricity used in producing, broadcasting, or distributing internet or communications services will be eligible for this exemption. Providers must apply to the Department of Revenue for a refund of sales and use taxes paid on these items annually, with a cap of $10 million in total refunds per year, distributed on a pro-rata basis if claims exceed this amount. However, this exemption explicitly excludes data centers, defined as facilities with a peak electricity demand of 50 megawatts or greater that become customers after December 31, 2026, and are primarily for storing, retrieving, or transmitting data, unless they are owned or operated by a telecommunications company or primarily support telecommunications network operations. The bill also makes a technical amendment to clarify the definition of "taxpayer" for certain tax purposes and will take effect after approval by the Governor, applying to tax years beginning after 2025.