Tobacco manufacturers and distributors have long made refund/rebate payments to retailers for the retailer’s purchase of cigarettes and other tobacco products from the manufacturer, provided the retailer reduces the price of the cigarettes and other tobacco products sold to the retailer’s customers.
In 2020, the South Carolina Department of Revenue issued SC Revenue Ruling #20-3 (“Buydowns – Tobacco Company Payments to Retailers”), and related Information Letter #20-35, administratively determining that these “buydown” payments from the ...
The South Carolina Department of Revenue (DOR) has issued a proposed Revenue Ruling which will have a significant impact on South Carolina tobacco retailers, if finalized in its present form. The proposed Revenue Ruling, to be effective on January 1, 2020, addresses tobacco manufacturer rebates and refunds to retailers, and which DOR characterizes as “buydowns” and “promotional payments”- i.e. sales volume discounts. The proposed Revenue Ruling determines that these payments to retailers are subject to sales tax.
Tobacco manufacturers have provided their retailers ...