By Robert Merten and Madison Barnett
The South Carolina Department of Revenue issued a revenue ruling concluding that charges paid by customers to stream media content over the Internet, such as movies, music and television programs, are subject to state sales and use tax. Under South Carolina law, the statutory definition of “tangible personal property” includes “services and intangibles, including communications.” The Department has long viewed cable and satellite television and other electronic services as taxable communications services, and the revenue ruling characterizes streaming media as the newest method of delivering taxable communications services. The Department’s ruling also said that streaming media charges are taxable regardless of whether they are paid as part of a subscription service, per item or per event. South Carolina Revenue Ruling No. 16-5 (July 16, 2016).