Environmental and pollution control equipment exemptions
South Carolina offers sales and use tax exemptions for equipment used to prevent, control or abate pollution in manufacturing and related operations. These exemptions support companies that integrate pollution mitigation into their operations and help reduce the cost of investing in environmental and pollution control systems.
South Carolina’s sales tax exemptions support industrial growth while encouraging responsible environmental practices.
Overview of the exemption
The Environmental and Pollution Control Equipment Exemptions allow qualifying businesses to purchase certain pollution control equipment without paying South Carolina state and local sales tax. This can lower upfront costs for companies required to install environmental systems to comply with federal or state regulations.
Under the exemption, equipment that is necessary for prevention of air pollution, control of water pollution or abatement of noise pollution is exempt from sales and use tax when used in manufacturing, processing, recycling, compounding, mining, quarrying or other eligible industrial activities.
What equipment may qualify
Qualifying pollution control equipment generally includes machinery and systems that are required to comply with pollution prevention or abatement standards established by federal or state agencies. Eligible equipment may include, but is not limited to:
- Air emission control systems
- Water treatment and effluent control systems
- Noise reduction equipment
- Other devices or machinery directly used for pollution prevention, control or abatement
The exemption applies when equipment is essential for compliance with environmental regulations and is used in a manufacturing or processing setting.
How the exemption works
When a purchase qualifies for the Environmental and Pollution Control Equipment Exemption:
- The purchaser does not pay South Carolina state sales tax on the exempted items.
- Local sales and use taxes administered through the Department of Revenue also do not apply.
- The exemption applies at the time of purchase when proper documentation is provided.
Taxpayers should obtain the appropriate exemption certification before purchasing to help ensure the exemption is applied correctly.
Eligibility criteria
To qualify for the exemption, equipment must be:
- Tangible personal property used directly in pollution prevention, control or abatement; and
- Necessary to comply with a federal or state environmental order or regulatory requirement for pollution control.
Eligibility is typically tied to regulatory compliance. Businesses should confirm equipment is used in a qualifying manner and maintain records substantiating its use for pollution control.
Claiming the exemption
To take advantage of this exemption:
- Confirm eligibility with the South Carolina Department of Revenue (SCDOR).
- Obtain necessary exemption documentation before purchase.
- Present exemption certification at the time of purchase to avoid tax collection.
- Maintain documentation demonstrating qualifying environmental control use.
For details on documentation requirements and exemption certificates, contact the SCDOR or consult the Sales & Use Tax Manual.
Exemption benefits
Pollution control equipment can be a significant capital investment for businesses required to comply with environmental regulations. By exempting sales and use tax on these purchases:
- Companies can reduce upfront cost barriers.
- Pollution mitigation becomes more economically feasible.
- South Carolina strengthens its manufacturing and processing environment while promoting environmental compliance.
- Businesses may be more competitive when investing in sustainable operations.
This aligns South Carolina’s economic development goals with responsible environmental stewardship.
Frequently asked questions
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