Sales Tax Exemption for Hydrogen Fuel Cells

December 05, 2023


South Carolina offers a sales tax exemption for "any device, equipment, or machinery operated by hydrogen or fuel cells, any device, equipment or machinery used to generate, produce, or distribute hydrogen and designated specifically for hydrogen applications or for fuel cell applications, and any device, equipment, or machinery used predominantly for the manufacturing of, or research and development involving hydrogen or fuel cell technologies."

A sales tax exemption may also be taken on building materials used to construct a new or renovated building or purchases of machinery for a research district. A research district is defined as land owned by the state, county or other public entity that is designated by the University of South Carolina, Clemson University, the Medical University of South Carolina, South Carolina State University or the Savannah River National Laboratory. If the exemption is taken on building materials, however, the amount of sales tax that would be assessed without the exemption must be re-invested by the taxpayer in hydrogen or fuel cell machinery or equipment in the same research district within two years of the original purchase.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: South Carolina
Incentive Type: Sales Tax Incentive
Web Site:
Administrator: South Carolina Energy Office
Start Date: 10/1/2007
Eligible Renewable/Other Technologies:
  • Hydrogen
  • Fuel Cells using Non-Renewable Fuels
  • Fuel Cells using Renewable Fuels
Incentive Amount: 100% of sales tax
Equipment Requirements: Equipment must be used to produce or research hydrogen fuel cells


Name: S.C. Code § 12-36-2120.71
Date Enacted: 6/27/2007
Effective Date: 10/1/2007


Name: Shannon Baxter-Clemmons, Ph.D
Address: PO Box 12302
Columbia SC 29211
Phone: (803) 545-0189

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.