(A) A partnership
engaged in the business of selling tangible personal property at retail, and
therefore required to be licensed under the provisions of Article 5, Chapter 36
of Title 12, must obtain a new retail license, or retail licenses if the
partnership has multiple retail locations, if:
1. The partnership incorporates.
2. A single partner takes over the business
and operates it as a sole proprietorship.
3. The partnership is terminated (no part of
any business, financial operation, or venture of the partnership continues to
be carried on by any of its partners in a partnership) and a new partnership is
begun.
4. The partnership is
otherwise required to obtain a new Taxpayer Identification Number ("TIN"). (See
SC Regulation Regulation 117-201.)
Note: If the retailer moves its retail business to a new
location, then the retailer must notify the Department of the move prior to the
move. Upon notification, the Department will issue a corrected retail license
at no charge for the new location.
(B) A new retail license, or retail licenses
if the partnership has multiple retail locations, is not required if:
1. The partnership merely changes its
name.
2. The partnership has a
change in ownership but is not required to obtain a new Taxpayer Identification
Number ("TIN"). (See SC Regulation Regulation
117-201.)
However, if there is a change of general partners, the Department advises the
partnership to either advise the Department of the change in general partners
or obtain a new retail license for each retail location. If the Department is
not advised of the change in general partners or a new retail license is not
obtained, it will be presumed that the persons listed in records of the
Department of Revenue as the general partner or partners are liable for any
sales or use taxes the partnership fails to pay (unless the retail license of
record indicates the partnership is a registered LLP pursuant to Code Section
33-41-1120) .
Since the partnership is not required to obtain a new retail license under this
circumstance, the payment of the application fee for a retail license, as
prescribed in Code Section
12-36-510,
is not required to be paid for a retail license obtained in order to ensure
that only proper persons are listed as the general partner or partners in the
records of the Department of Revenue.
(C) The term "partnership" includes a limited
liability company ("LLC") that is taxed for South Carolina income tax purposes
as a partnership.
Note: Unlike other types of partnerships, a general partner in
a limited liability partnership ("LLP") is not liable for debts, obligations
and liabilities chargeable to the partnership while the partnership is a
registered LLP. (See Code Section
33-41-370.)
A partner in an LLP and a member of an LLC may, however, be
individually and personally liable for withholding taxes, state and local sales
and use taxes, or both as a "withholding agent" (withholding tax), a
"responsible person" (state and local sales and use taxes), or both under the
provisions of Code Section
12-8-2010
and Code Section
12-54-195.
(D) The conversion of a
partnership to a registered LLP pursuant to Article 13 of Chapter 41 of Title
33 is a partnership-to-partnership conversion and the organization is still
considered to be the same entity for South Carolina tax purposes and is not
required to obtain a new retail license. However, the Department advises the
resulting LLP to either advise the Department of the change in general partners
or partners or obtain a new retail license for each retail location. If the
Department is not advised of the change in general partners or partners or a
new retail license is not obtained, it will be presumed that the general
partner or partners are liable for any sales or use taxes the LLP fails to pay.
Since the resulting LLP is not required to obtain a new retail license, the
payment of the application fee for a retail license, as prescribed in Code
Section
12-36-510,
is not required to be paid for a retail license obtained as a result of the
conversion of a partnership to an LLP.
(E) The conversion of a partnership to an LLC
taxed as a partnership pursuant to Code Section
33-44-902
is treated as a partnership-to-partnership conversion and the organization is
still considered to be the same entity for South Carolina tax purposes and is
not required to obtain a new retail license. See Code Section
33-44-903
which confirms that a partnership that has been converted into an LLC is the
same entity that existed before conversion and all property owned by the
converting partnership vests in the LLC.
However, the Department advises the resulting LLC to either
advise the Department of the change in general partners or partners or obtain a
new retail license for each retail location. If the Department is not advised
of the change in general partners or partners or a new retail license is not
obtained, it will be presumed that the general partner or partners are liable
for any sales or use taxes the LLC fails to pay (unless the retail license of
record indicates the partnership is a registered LLP pursuant to Code Section
33-41-1120) .
Since the resulting LLC is not required to obtain a new retail license, the
payment of the application fee for a retail license, as prescribed in Code
Section
12-36-510,
is not required to be paid for a retail license obtained as a result of the
conversion of a partnership to an LLC taxed as a partnership.
(F) The provisions of this regulation apply
to the retail licensing requirements under the sales and use tax law (Chapter
36 of Title 12) and do not apply to the alcoholic beverage licensing provisions
of Title 61. For information as to when a person must obtain a new alcoholic
beverage license, see Code Section
61-2-140
and the various other licensing provisions of Title 61.
Notes
S.C. Code Regs. §
117-300.6
Added by State Register
Volume 26, Issue No. 6, Part 2, eff June 28, 2002; State Register Volume 31,
Issue No. 2, eff February 23, 2007.
