May 17, 2017
SALES TAX/INFRASTRUCTURE MAINTENANCE FEE TO GO TO $500 JULY 1ST
Below is a summary of the highway funding law that passed the legislature last week and takes effect July 1st, 2017.
What the new law does:
– The law increases gasoline tax by two cents each year over a six-year span.
– It increases the sales tax cap from $300 to $500.
– The new “Highway User Fee” applies to in-state residents and vehicles that are registered in South Carolina (includes out-of-state residents who register a vehicle in South Carolina).
– The “Sales Tax” applies to out-of-state residents who purchase a vehicle in South Carolina, but register out-of-state.
– Both taxes are 5% of the sales price and capped at $500.
– Both taxes are to be remitted to SCDMV.
– Vehicles powered exclusively by electricity, hydrogen, or any fuel other than motor fuel shall pay a biennial road use fee of one hundred twenty dollars.
– Vehicles powered by a combination of motor fuel subject to motor fuel user fees imposed by electricity, hydrogen, or any fuel other than motor fuel shall pay a biennial road use fee of sixty dollars.
– Casual sales will pay the new highway user fee of 5% of fair market value capped at $500.
– Individuals moving to South Carolina and registering their vehicle for the first time in South Carolina will pay a one-time registration fee of $250.
– The $250 1st time registration fee, the highway user fee, and/or the sales tax do not apply to someone stationed in South Carolina serving active duty military in the United States Armed Forces. However, military spouses or dependents are only exempt from the 1st time registration fee of $250.
Examples of how sales would be handled under the new law:
– If an out-of-state customer buys a car in South Carolina, they would be charged 5% of the sales price up to the maximum sales tax of $500, or the lesser, according to if their state is a reciprocating state or not.
– If a South Carolina resident buys a car in another state, they will pay 5% of the sales price up to the maximum highway user fee of $500 to SCDMV.
– If someone moves to South Carolina and registers their car for the first time they will pay a registration fee of $250.
– If an out-of-state resident buys a car in South Carolina, registers their car in South Carolina, and keeps it at their vacation property in South Carolina, they will pay 5% of the sales price up to the maximum highway user fee of $500.