S.C. Code Regs. 117-309.6 — Machine Shops

Property manufactured or fabricated by machine shops and custom foundries is subject to the sales
tax, except when sold for resale purposes or when exempted by one of the exemptions found in the
sales and use tax law.
In doing repair work, the machine shop operator consumes the materials which lose their identity in
the repairing process, such as paint, solder, babbitt and lumber. He is also considered to be the
consumer of such items as cotter keys, nails, washers, stove bolts and nuts, bits of metal, and sheets of
metal used in patching or reinforcing. The receipts from the use of these materials are not subject to
the sales and use tax. The sales or use tax is due by the machinist at the time of purchase from his
suppliers.
Where the machinist in making repairs, fabricates or manufactures a recognizable part or attachment
for the article being repaired (as contrasted to patching, mending, or reinforcing weakened parts) no
deduction is permissible for labor or any other expenses which are a part of fabricating or manufactur-
ing the part or attachment. He may, however, if making separate agreements to sell the manufactured
or fabricated part and to install same, remit tax only on the sales price of the fabricated part or
attachment, provided his books and invoices show clearly a separation between the sales price of the
fabricated part or attachment and the labor and service of installation.