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ADMISSIONS & AID
Fixed Asset Accounting
Sales Tax Guidelines
I. General guidelines related to the assessment of SC sales tax:
Winthrop pays sales tax just like any consumer. The phrase “exempt from taxation” refers to Federal and State income tax – not sales tax. Tax laws state that Winthrop must pay 7% tax on all tangible items – regardless of where the items were purchased. The 7% rate is assessed as follows: 6% to the State, 1% to York County for the local option sales tax.
If the purchase is made in York County, the vendor will add 7% tax to the bill and remit the tax to the State.
Sales tax is assessed by the vendor in the county in which the item is delivered (or picked up). However, the law states that Winthrop must pay the York County Tax Rate, regardless of where the item was purchased because taxes are due in the county in which the item is USED, not where it is picked up. As always, there are exceptions. If the county in which the item is picked up has a higher tax rate than York County, and tax is paid to that county, no additional tax is due to York County.
If the purchase is made outside of York County but within the State, Winthrop must still pay 7% tax since the item is used in York County. If the SC vendor ships the item to Winthrop, the vendor is required by law to collect and remit 7% tax since the item was delivered in York County. On the other hand, if Winthrop personnel pick up the item in a county that does not have a local option sales tax; the vendor is only required to charge us 6% tax because they “delivered” the item in their county. Nevertheless, Winthrop will have to pay the additional 1% to York County because that is where the item is used.
If the purchase is made outside the State, Winthrop generally does not pay tax to the out-of-state vendor (there are some exceptions, but they are rare; the exception would be if an out-of-state vendor had a specific agreement with the SC Dept. of Revenue to collect and remit SC tax). However, the Accounting Dept will calculate the amount of tax (7%) that needs to be remitted to the State and submit it to the SC Dept of Revenue for that amount.
II. General guidelines for preparing requisitions/purchase orders
Purchase orders related to tangible items that are purchased and delivered to Winthrop using in-state vendors should NOT have the TX indicator added to the transaction. However, we encourage departments to add a tax line to the requisition so that the true cost of the item will be properly represented on the requisition. You will need to calculate 7% tax and add a line “TAX” on the requisition/purchase order. Failure to add the tax line will prevent the sales tax from being encumbered. The true amount of your purchase will be understated by 7% unless the “TAX” line is added. You should handle the addition of tax as you would shipping/handling charges.
Purchase orders related to tangible items that are purchased and delivered to Winthrop using out-of-state vendors SHOULD have the TX added to the transaction. The system will add 7% tax to the requisition. Accounting will arrange to pay the State the tax owed. Failure to add the “TX” indicator will prevent the sales tax from being encumbered. The true cost of the item will be understated by 7%.
III. Additional Sales/Use tax information manual can be found at the SC Department of Revenue website.
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