S.C. Code Ann. § 5-41-120: Sales and use tax; ordinance; referendum.

(A)(1) Subject to the requirements of this chapter, a municipal governing body of a municipality wholly or partially located in a county that does not impose any tax pursuant to Chapter 10 or Chapter 37, Title 4 or any local law enacted by the General Assembly as of January 1, 2026, may impose a sales and use tax not to exceed one percent by ordinance, subject to a referendum to be held at the next general election which must be after the 2026 General Election, within the municipality for a specific purpose or purposes and for a limited amount of time. If a municipality is only located partially in a qualifying county, then the municipality only may impose the sales and use tax in the portion of the municipality located within the qualifying county.

(2) Notwithstanding item (1), a municipal governing body of a municipality wholly or partially located in a county that has never imposed any tax pursuant to Chapter 10 or Chapter 37, Title 4 or any local law enacted by the General Assembly, and otherwise qualifies, may impose the tax allowed by this chapter at any qualifying general election.

(B) No less than twenty percent of the revenues collected pursuant to this chapter must be used to provide a credit against a taxpayer's municipal ad valorem tax liability pursuant to Section 5-41-170. The credit only may be applied to property assessed pursuant to Section 12-43-220(c). Any revenues not dedicated to tax relief may be used to defray the cost associated with projects authorized in this chapter including, but not limited to, debt service on bonds issued to pay for such projects.

(C) To impose the tax, the governing body of the municipality shall enact an ordinance which contains the ballot question formulated by the municipality. The ordinance must specify:

(1) the purpose for which the proceeds of the tax are to be used. If any of the proceeds are to be used for purposes other than a tax credit, the proceeds may be used for projects located within or without, or both within and without, the boundaries of the municipality, and may include the following types of projects:

(a) highways, roads, streets, bridges, public parking lots, public parking garages, core local government services, and related facilities;

(b) administration buildings, civic centers, police stations, and fire stations;

(c) any combination of the projects described in this item;

(2) the maximum time, in two-year increments not to exceed eight years from the date of imposition, or in the case of a reimposed tax, a period ending on April thirtieth, not to exceed seven years, for which the tax may be imposed;

(3) at least twenty percent of the amount collected must be used to provide a nonrefundable credit against existing municipal ad valorem tax liability in accordance with Section 5-41-170 on property assessed pursuant to Section 12-43-220(c); and

(4)(a) if the municipality proposes to issue bonds to provide for the payment of any costs of the projects, the maximum amount of bonds to be issued, whether the tax proceeds are to be pledged to the payment of the bonds and, if other sources of funds are to be used for the projects, specifying the other sources;

(b) if any of the proceeds are to be used for purposes other than a tax credit, the maximum cost of the project or facilities or a portion of the project or facilities, to be funded from proceeds of the tax or bonds issued as provided in this chapter and the maximum amount of net proceeds expected to be used to pay the cost or debt service on the bonds, as the case may be.

(D) Upon receipt of the ordinance, the municipality must conduct a referendum on the question of imposing the sales and use tax in the municipality, or portion thereof, that is to be subject to the tax. The referendum for imposition of the tax must be held at the time of the general election. Two weeks before the referendum the appropriate election commission must publish in a newspaper of general circulation the question that is to appear on the ballot, with the list of projects and the cost of the projects. If the proposed question includes the use of sales taxes to defray debt service on bonds issued to pay the costs of any project, the notice must include a statement indicating that principal amount of the bonds proposed to be issued for the purpose and, if the issuance of the bonds is to be approved as part of the referendum, stating that the referendum includes the authorization of the issuance of bonds in that amount. This notice is in lieu of any other notice otherwise required by law.

(E) The referendum question to be on the ballot must read substantially as follows:

"Must a _____ percent sales and use tax be levied in (municipality or portion therof) for no more than (time) for the purpose of allowing a credit against certain municipal ad valorem tax liability and for the purpose of raising the amounts specified for the following purposes?

(1) $________ for __________

(2) $________ for __________

(3) etc.

Yes []

No []"

If the referendum includes the issuance of bonds, the question must be revised to include the principal amount of bonds proposed to be authorized by the referendum and the sources of payment of the bonds if the sales tax approved in the referendum is inadequate for the payment of the bonds. If the entirety of the revenues collected pursuant to this chapter are used for existing municipal ad valorem tax liability, the question must be revised appropriately.

(F) All qualified electors desiring to vote in favor of imposing the tax for the stated purposes shall vote "yes" and all qualified electors opposed to levying the tax shall vote "no." If a majority of the votes cast are in favor of imposing the tax, then the tax is imposed as provided in this chapter and the enacting ordinance. The appropriate election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the result to the municipal governing body and to the Department of Revenue no later than thirty days after the election. Expenses of the referendum must be paid by the municipality.

(G) Upon receipt of the returns of the referendum, the municipal governing body must, by resolution, declare the results. In such event, the results of the referendum, as declared by resolution of the municipal governing body, are not open to question except by a suit or proceeding instituted within thirty days from the date the resolution is adopted.

(H) Once a certified copy of the ordinance is filed with the department, for the period of imposition provided in that ordinance, the department may not accept as filed any additional ordinance from the municipality that in any way relates to the tax allowed to be imposed pursuant to this chapter except an ordinance reducing or repealing the existing tax. The department shall accept for filing a certified copy of an ordinance reducing or repealing the tax and that reduction or repeal applies in the manner provided in subsection (D) for imposition.

(I) When the tax authorized by this chapter is imposed for more than one purpose, the enacting ordinance must set forth the priority in which the net proceeds are to be expended for the purposes stated. The enacting ordinance may set forth a formula or system by which multiple projects are funded simultaneously.