A "cigarette" is:

1. Any roll for smoking containing tobacco or any substitute for tobacco wrapped in paper or in any substance other than a tobacco leaf; or
2. Any roll for smoking containing tobacco or any substitute for tobacco, wrapped in any substance, weighing three pounds per thousand or less, however labeled or named, which because of its appearance, size, type of tobacco used in the filler, or its packaging, pricing, marketing, or labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in item.

Since the imposition of the cigarette tax applies to “all cigarettes made of tobacco or any substitute for tobacco,” cigarettes that do not contain tobacco, such as clove cigarettes, are subject to the tax.

In addition, a cigar which weighs three pounds per thousand or less, regardless of how it’s labeled or named, is considered a cigarette for the purposes of the cigarette tax.

The tax rate for cigarettes is $0.0285 on each cigarette. Cigarettes are typically sold in packs of 20 or 25. The tax on a pack of 20 cigarettes is $0.57 and $0.7125 on a pack of 25.

Note: The cigarette tax is actually a combination of two taxes - excise tax of 3 1/2 mills per cigarette and a surtax of $0.025 per cigarette.

The term “tobacco products” is defined in the law to mean “cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco, snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut, and other chewing tobacco, shorts, refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco, prepared in a manner to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing or smoking, but does not include cigarettes.”​

The tax rate on tobacco products is 5% of the manufacturer’s price. The manufacturer’s price is “the established price at which a manufacturer sells to a wholesaler.”​

South Carolina Revenue Ruling #94​-7advised:

1. The “established price” of snuff, chewing tobacco and smoking tobacco for purposes of calculating the tobacco tax on promotional packages, products received free of charge, and promotional allowances, as described in the facts, is as follows:
• Promotional Packaging - A product packaged for the consumer as part of a “buy one get one free” or similar promotion by the manufacturer is a packaged unit with an established price that is distinct and separate from the established price for the same product sold individually. Therefore, the established price is the recognized and accepted sum of money asked by the manufacturer for each packaged unit during the promotion.
• Products Received Free of Charge - If a manufacturer offers a wholesaler, during a specified time period, the opportunity to receive one case of a product free of charge if he purchases one or more cases of the same product, the total price that the wholesaler pays is the “established price” for all the cases of the product received under the promotion.
  
  For example, if the wholesaler purchases 10 cases for $200 and receives 1 case free, the established price upon which the tax is calculated for all 11 cases is $200. A transaction must be viewed based upon its substance rather than its form. As such, the taxpayer in the example has purchased 11 cases for $200.
• Promotional Allowance - If a manufacturer offers a promotion that merely reduces the price of the product, the established price is the recognized and accepted sum of money asked by the manufacturer for the product during the promotion.
  
  For example, the product may normally sell for $175 per case; however, the manufacturer is offering for a limited time the product for $160 per case with the invoice showing a unit price of $175 and a promotional allowance of $15. As a result of the promotion, the established price is $160.Chapter 8, Page 3
2. The “established price” for the purpose of calculating the tobacco tax is the amount charged by the manufacturer to the wholesaler before any cash discounts for early payment are taken.​​

A cigarette and tobacco products license must be obtained, at no cost, by the following persons before engaging in the sale of cigarettes or tobacco products in South Carolina:

1. Wholesalers of cigarettes or tobacco products.
2. Retailers that purchase untaxed cigarettes or untaxed tobacco products.
3. Vending machine operators selling cigarettes or tobacco products through vending machines placed on another person’s premises.
4. Sales representatives for manufacturers of cigarettes or tobacco products.

Yes.

There is no cost to obtain a cigarette or tobacco products tax license.

No. Retailers are only required to obtain a license if they purchase untaxed cigarettes or untaxed tobacco products.​​

No. A license is only valid for the person in whose name it is issued and only for the transaction of business at the place designated in the license.

Cigarettes: Persons who are liable for the cigarettes tax are required to post a surety bond or submit statements of financial stability satisfactory to the Department. These are required to cover possible losses from a taxpayer’s failure to remit the cigarette or tobacco products due.
Tobacco Products: A bond or statement of financial stability is not specifically required with respect to the tobacco products tax. However, tobacco products licensees who are not liable for the cigarette tax can be required to post a bond if the licensee fails to pay the tobacco products tax for as many as two filing periods in a 12 month period.​

No. The law requiring stamps was repealed effective January 1, 1996. The payment of license tax on cigarettes is by a reporting method rather than by tax stamps. That law eliminated stamps, but implemented a report to be completed that describes the number of cigarettes sold or disposed of.​​

Yes. The tax is imposed “upon all cigarettes made of tobacco or any substitute therefore.”

Only substitutes for cigarettes are subject to the tax. The tax on tobacco products applies to forms of tobacco prepared in a manner suitable for chewing, smoking or other consumption.

1. Sales to the United States Government;
2. Sales to a United States Government instrumentality for Army, Navy, Marine or Air Force purposes and delivered to a place lawfully ceded to the United States; and
3. Sales to a United States Government instrumentality for Army, Navy, Marine or Air Force purposes and delivered to a ship belonging to the United States Navy for distribution and sale to members of the military establishment only.​

Contact the Collection Supervisor at the nearest Taxpayer Service Center of the SCDOR to report any evidence of possession of contraband cigarettes. 

Information concerning retail sales of cigarettes to minors should be reported to the local law enforcement agency.

Yes.​​