South Carolina H 5122: Internet and Communications Service Providers Equipment

Bill Text

2025-2026 Bill 5122 Text of Previous Version (May. 12, 2026) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 5122

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

Indicates Matter Stricken

Indicates New Matter

As Passed By The Senate

May 12, 2026

H. 5122

Introduced by Reps. B. Newton, Bannister, 
Herbkersman, Yow, C. Mitchell, Rose, Cobb-Hunter, Lawson, Brewer, Kirby, 
Ballentine, Rutherford, Hiott, Gagnon, Guest, M. M. Smith, Howard, Pope, Grant, 
Anderson, Schuessler, G. M. Smith, Caskey, Davis and Govan 

S. Printed 5/12/26--S.

Read the first time May 5, 2026

________

A bill

TO AMEND THE SOUTH 
CAROLINA CODE OF LAWS BY ADDING ARTICLE 31 TO CHAPTER 9, TITLE 58 SO AS TO 
PERMIT CERTAIN ITEMS SOLD TO OR USED BY INTERNET ACCESS SERVICE PROVIDERS AND 
COMMUNICATIONS SERVICE PROVIDERS TO BE EXEMPT FROM SALES TAX. 

 Amend Title To Conform

Be it enacted by the 
General Assembly of the State of South Carolina:

SECTION 1. Chapter 9, Title 58 of the S.C. Code is amended by 
adding:

Article 31

Service Provider Tax Exemptions

 Section 
58-9-3100. (A) All supplies, 
technical equipment, machinery, and electricity sold to internet access service 
providers and communications service providers, for use in producing, 
broadcasting, or distributing internet access service, communications services, 
or any combination thereof are exempt from sales tax imposed by Chapter 36, 
Title 12 pursuant to the provisions of Section 12-36-2120. For purposes of this 
section, internet access service providers and communications service providers 
are deemed to be manufacturers.

 (B) 
An internet access provider or communications service provider shall apply to 
the Department of Revenue for a refund of state and local sales and use taxes 
paid on items exempt under this section not later than January thirty-first for 
the prior calendar year. No later than May first, the department shall 
calculate the total amount of qualifying refund claims. If the total amount of 
refund claims exceeds ten million dollars for any year, the department shall 
issue pro-rata refunds such that the total amount of refund claims shall not 
exceed ten million dollars for any year. Refunds shall be paid no later than 
June first.

 (C) 
Notwithstanding any other provision of this section, a data center may not 
claim or utilize the exemption or refund authorized pursuant to this section.

 (1) 
For purposes of this subsection, "data center" means a facility, campus of 
facilities, or array of electronically interconnected facilities under a single 
electric supply agreement in this State used by an entity or other business 
enterprise to operate, manage, or maintain a computer, group of computers, or 
other organized assembly of hardware and software for the primary purpose of 
storing, retrieving, or transmitting data, other than facilities owned or 
operated by a telecommunications company as defined in Section 58-9-2200 or 
facilities that primarily support telecommunications service or network 
operations, that has a peak demand of fifty megawatts or greater, and that 
becomes a customer of an electric service provider after December 31, 2026. 

 (2) 
For purposes of calculating peak demand under this definition, peak demand 
shall be determined according to the contract between the energy user and the 
electric service provider, and the possibility or occurrence of energy usage 
which temporarily exceeds fifty megawatts shall not cause a commercial data 
center to fall under this definition where contractual peak demand is less than 
fifty megawatts.

SECTION 2. This act takes effect upon approval 
by the Governor and applies to tax years beginning after 2025.

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This web page was last updated on May 12, 2026 at 07:18 PM