Noticed something odd working with two manufacturing clients in SC. One served by Santee Cooper automatically applies manufacturing exemption from sales tax. Other client with SCE&G (now Dominion) has been paying 6% sales tax for years. Both have valid Form ST-8M certificates. Why the difference in utility practices?
South Carolina manufacturing exemption - Santee Cooper vs SCE&G differences
Santee Cooper being a public utility tends to be more proactive about applying exemptions. SCE&G historically required customers to specifically request exemption application even with certificate on file. Code of Laws 12-36-2120 is the same for both though.
I've seen this too. Private utilities often err on side of collecting tax unless explicitly told not to. Public utilities seem to review exemption certificates more thoroughly during setup.
Filed refund claim with SC Department of Revenue for the SCE&G client. 3 years lookback = $21,300 recovery. Also got go-forward exemption applied. Definitely worth checking even when certificate is supposedly on file.
Same pattern in Virginia. Dominion charges until told not to, while some municipal utilities proactively apply exemptions. Always verify tax treatment during initial audit phase.
Good reminder that exemption certificates and actual exemption application are two different things. Verify tax billing regardless of what paperwork exists. Private utilities especially need explicit instructions.