South Carolina AG Concludes State May Withhold Local Option Sales Tax Distributions for Audit Noncompliance
South Carolina AG Concludes State May Withhold Local Option Sales Tax Distributions for Audit Noncompliance # South Carolina AG Concludes State May Withhold Local Option Sales Tax Distributions for Audit Noncompliance Sept.
news.bloombergtax.com · September 8, 2026
South Carolina AG Concludes State May Withhold Local Option Sales Tax Distributions for Audit Noncompliance
# South Carolina AG Concludes State May Withhold Local Option Sales Tax Distributions for Audit Noncompliance
Sept. 8, 2026, 6:03 PM UTC
Bloomberg Tax Automation
The South Carolina Attorney General (AG) concluded that the State Treasurer must withhold local option sales tax distributions from municipalities that fail to timely submit required audited financial statements. In an advisory opinion interpreting Proviso 98.9 of the 2025–2026 Appropriations Act, the Attorney General determined that local option sales tax revenues constitute “state payments” subject to withholding because the South Carolina Department of Revenue collects the taxes under Title 12 before distributing them to local governments. Relying in part on the reasoning of Richland County v. Department of Revenue (2018), the opinion concludes that taxes administered under Title 12 are ...