South Carolina businesses that first receive or sell untaxed nicotine-vapor products can now register for a new state tax account, one week before collection begins Oct. 1.
The South Carolina Department of Revenue opened registration through MyDORWAY on Sept. 24. The tax is five cents per milliliter of consumable nicotine liquid or other nicotine-containing material depleted as a vapor product is used. The first return, covering October activity, is due Nov. 20.
The new levy applies to vapor products, electronic cigarettes and e-liquids containing consumable nicotine. Responsibility falls on the first business that purchases or sells taxable products in the state, a group that can include retailers, wholesalers, distributors and manufacturers.
Who must register
The department’s detailed tax guidance says a free license is required before selling manufactured nicotine-vapor products for several business types. They include in-state wholesalers and manufacturers receiving untaxed products, out-of-state suppliers selling into South Carolina, retailers buying untaxed products from out-of-state suppliers, retailers mixing house-made e-liquid and vending-machine operators handling untaxed products.
Businesses must register, file returns and pay electronically through MyDORWAY. Monthly returns are due on the 20th day after the filing period ends, even when a taxpayer records no activity. Businesses with existing cigarette-stamp or other-tobacco-product accounts will receive an updated license after registering for the new account.
At the statutory rate, the tax equals $1.50 on 30 milliliters of taxable liquid, $3 on 60 milliliters and $5 on 100 milliliters. Those calculations describe the business’s state-tax liability at the first taxable stage; they do not dictate how a seller must display or pass through the cost to customers.
The General Assembly created the levy in Act 234, which Gov. Henry McMaster signed May 19. The law directs proceeds from both the vapor tax and a related tax on cigarettes for heating into the South Carolina Medicaid Reserve Fund.
Heat-not-burn products change too
The same rollout introduces separate rules for cigarettes designed to be heated rather than burned. Licensed distributors can order heat-not-burn tax stamps through MyDORWAY beginning Sept. 24. The state rate is 21.375 mills per cigarette, or 42.75 cents for a pack of 20.
Distributors must stamp those packages and begin reporting purchases and sales with the October monthly cigarette report, also due Nov. 20. That process differs from the vapor tax, which is calculated by the volume of nicotine liquid rather than by each unit sold.
For retailers and suppliers, the practical deadline is immediate: businesses in the taxable chain need the appropriate account before Oct. 1 and must determine whether they are the first party responsible for tax on each product. Consumers may see the levy reflected in prices, but the filing and payment obligation rests with the covered business.
