How much South Carolina sales tax is due when a dealer sells a motor vehicle or trailer to an out-of-state resident (per SC IL #13-4)?

Plain-English summary

When a South Carolina dealer sells a motor vehicle, trailer, semitrailer, or pole trailer to a nonresident who will register and license it in their home state, the South Carolina sales tax is capped at the lesser of the buyer's home-state tax or the ordinary South Carolina tax. The rule comes from S.C. Code § 12-36-930. This edition is effective March 1, 2013 and supersedes SC Information Letter #05-13.

Mechanically:

• The South Carolina tax due is the lesser of (a) the sales tax the purchaser's state of residence would impose on the sale, or (b) the tax that would otherwise apply under Chapter 36 of the South Carolina Code.
• If the nonresident purchaser cannot receive a credit in their home state for sales tax paid to South Carolina, then no South Carolina sales tax is due.

Even when a home-state credit is allowed, the purchaser may still owe more in their own state — because of a higher state rate, a local tax, or how their state's credit rules treat state versus local tax.

Required paperwork. At the time of sale the seller must obtain from the purchaser a notarized statement of the purchaser's intent to license the vehicle in their home state within 10 days. Form ST-385 ("Affidavit for Intent to License Motor Vehicle, Trailer, Semitrailer, or Pole Trailer Purchased in South Carolina in Purchaser's State of Residence") may be used; the seller retains a completed, notarized copy and the purchaser gives a copy to their home-state taxing agency. The letter attaches worksheets and a table of neighboring states' motor-vehicle tax rates to help dealers compute the tax.

What this means for you

If you are a South Carolina dealer

For a qualifying nonresident sale, charge the lesser of the buyer's home-state rate or the South Carolina tax, and charge nothing if the buyer's state gives no credit for South Carolina tax. Get the notarized ST-385 affidavit at the time of sale and keep it in your records. Use the letter's worksheets and neighboring-state rate table to run the calculation.

If you are a nonresident buyer

The South Carolina tax you pay is limited as above, but do not assume you are done — your own state may impose additional state or local tax when you register the vehicle at home.

Common questions

Q: How much South Carolina sales tax do I charge a nonresident buyer?
A: The lesser of the tax the buyer's home state would impose or the South Carolina tax — and zero if the buyer's state would not credit South Carolina tax paid.

Q: What paperwork is required?
A: A notarized statement (Form ST-385) of the buyer's intent to license the vehicle in their home state within 10 days, retained by the seller.

Q: Does paying the reduced South Carolina tax settle the buyer's whole bill?
A: Not necessarily. The buyer may still owe additional state or local tax in their home state.

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL13-4.pdf

Original ruling text

State of South Carolina

Department of Revenue
300A Outlet Pointe Blvd., P.O. Box 12265, Columbia, South Carolina 29211
Website Address: http://www.sctax.org

SC INFORMATION LETTER #13-4

SUBJECT:

Sale of a Motor Vehicle, Trailer, Semitrailer and Pole Trailer to a
Nonresident
(Sales Tax)

EFFECTIVE DATE: March 1, 2013
SUPERSEDES:

SC Information Letter #05-13 and all previous documents and any oral
directives in conflict herewith.

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2000)
S. C. Code Ann. Section 1-23-10(4) (Supp. 2012)
SC Revenue Procedure #09-3

SCOPE:

An Information Letter is a written statement issued to the public to
announce general information useful in complying with the laws
administered by the Department. An Information Letter has no
precedential value.

GENERAL INFORMATION CONCERNING SALES TO NONRESIDENTS
General Rule. For South Carolina sales tax purposes, Code Section 12-36-930 provides that the
sales tax due on a sale to a nonresident of a motor vehicle, trailer, semitrailer, or pole trailer that
is to be registered and licensed in the nonresident purchaser’s state of residence, is as follows:

1. The lesser of:
   (a) the sales tax which would be imposed on the sale in the purchaser’s state of residence or
   (b) the tax that would be imposed under Chapter 36 of the South Carolina Code of Laws.
2. No sales tax is due in South Carolina if a nonresident purchaser cannot receive a credit in his
   resident state for sales tax paid to South Carolina.
   Note: Even though a credit will be allowed in the purchaser’s state of residence for sales tax paid
   in South Carolina under this provision, the purchaser may still owe a state or local tax in his state
   of residence as a result of a higher state tax imposed in the purchaser’s state, a local tax due in
   the purchaser’s state, or other provisions of the state tax law in the purchaser’s state of residence
   (e.g., credit provisions concerning state vs. local taxes).

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Required Paperwork. Code Section 12-36-930 further provides that at the time of the sale, the
seller shall obtain from the purchaser a notarized statement of the purchaser’s intent to license
the vehicle in the purchaser’s state of residence within 10 days. South Carolina Form ST-385,
“Affidavit for Intent to License Motor Vehicle, Trailer, Semitrailer, or Pole Trailer Purchased in
South Carolina in Purchaser’s State of Residence,” may be used to meet the paperwork
requirements of Code Section 12-36-930. The seller should retain a completed and notarized
copy of Form ST-385. The purchaser should give a copy to the appropriate taxing agency in the
purchaser’s state of residence.
Note: Worksheets are attached to assist in calculating the tax due on sales to nonresidents. For
illustrative purposes, attached is a sample worksheet completed for a motor vehicle purchased by
an Alabama resident.
Sales Tax Rates Imposed by Neighboring States on Sales of Motor Vehicles. Since the amount of
tax imposed on the purchase of a motor vehicle within South Carolina by a nonresident depends,
in part, on the tax rate and type of tax imposed in the nonresident’s home state, the sales tax
imposed on sales of motor vehicles by neighboring states is provided to assist dealers in
calculating the tax due, if any. The neighboring states tax information, as of the date of this
Information Letter, for motor vehicles is:
Alabama

a 2% State rate imposed on sales price less trade in allowance

Florida

a 6% State rate imposed on sales price less trade in allowance

Georgia

Sales: no sales tax is due since Georgia (effective March 1, 2013)
does not impose a sales tax on the sale of a motor vehicle
Lease: a 4% State rate is imposed on the lease of motor vehicles.

Kentucky

no sales tax is due since Kentucky does not impose a sales tax on
the sale of a motor vehicle, but imposes a motor vehicle usage tax
upon registration.

North Carolina

no sales tax is due since North Carolina does not impose a sales tax
on the sale of a motor vehicle, but imposes a highway use tax upon
registration.

Tennessee

a 7% State rate imposed on sales price less trade in allowance

Virginia

no sales tax is due since Virginia does not allow a credit for taxes
paid in another state if the state of purchase (e.g., South Carolina)
exempts sales of motor vehicles to residents of states that do not
give such credit.

West Virginia

no sales tax is due since West Virginia does not allow a credit for
taxes paid in another state

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Sales to Residents of Other States. In order to assist dealers verify the most current sales tax
information in other states or to obtain information in calculating the tax due on sales to
nonresidents of states not listed above, the following are websites that provide a link to
applicable state agencies as of the date of this Information Letter:

1. http://www.taxadmin.org/fta/link/ This is the Federation of Tax Administrators website. It
   contains a link to the website to each of the 50 states taxing authorities.
2. http://www.seatastates.org/links.htm This is the Southeastern Association of Tax
   Administrators website. It contains a link to the website to each of the southeastern states
   taxing authorities.
   Sales to Residents of Other Countries or Possessions of the United States. A sale of a motor
   vehicle, trailer, semitrailer, or pole trailer to a resident of a possession of the United States or
   another country is subject to South Carolina sales tax at the rate that a South Carolina resident
   would pay on the purchase.
   SALES NOT SUBJECT TO SALES AND USE TAX
   The following sales are not subject to sales and use tax:
3. A sale of a motor vehicle, trailer, semitrailer, or pole trailer that is delivered out-of-state by the
   dealer at the purchaser’s direction. See Code Section 12-36-2120(36).
4. A sale of a motor vehicle, trailer, semitrailer, or pole trailer to a dealer for resale. The liability
   for the sales tax will shift from the seller to the purchaser (i.e., the dealer purchasing the motor
   vehicle for resale) if the seller receives a properly completed Form ST-8A, “Resale
   Certificate,” from the purchaser. See Code Section 12-36-120(1).
5. A sale of a qualifying motor vehicle to a military personnel stationed in this State by reason
   of orders of the U.S. Armed Forces who is not a resident of South Carolina is exempt from
   South Carolina sales and use tax, provided the dealer is furnished within 10 days of the sale:
   (1) a copy of Form ST-178, “Nonresident Military Tax Exemption Certificate,” completed by
   a commissioned officer of the Armed Forces of a higher rank than the purchaser, or (2) a
   leave and earnings statement from the appropriate department of the armed services
   designating the state of residence of the buyer.
   Note: This sales tax exemption for sales to nonresident military personnel applies only
   to the sale of a motor vehicle that is primarily designed to carry passengers, such as a
   car, passenger van, and sports utility vehicle. It does not apply to the sale of a motor
   vehicle designed primarily to carry cargo, such as a cargo van or truck. See Code
   Section 12-36-2120(25).

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SOUTH CAROLINA $300 MAXIMUM SALES TAX
The sales and use taxes are imposed at the rate of 5% 1 for the sale or lease of tangible personal
property subject to the $300 maximum tax. Local taxes administered and collected by the
Department on behalf of local jurisdictions do not apply to the sale or lease of tangible
personal property subject to a maximum tax.
The following are examples of tangible personal property the sale or lease of which are subject to
the $300 maximum tax:
■ motor vehicles (including “low speed vehicles” that meet the requirements of South
Carolina Code §§56-2-110 through 56-2-130);
■ motorcycles (on-road or off-road);
■ recreational vehicles, including tent campers, travel trailers, park trailers, motor homes and
fifth wheels;
■ trailers or semitrailers capable of being pulled only by a truck tractor;
■ fire safety education trailers; and
■ horse trailers.
Leases: In order for the lease of any of the above items to qualify for the $300
maximum tax, the lease must specifically state the term of, and remain in force for, a
period in excess of 90 continuous days. In addition, the sales or use tax applies to each
renewal of the lease and the maximum tax for that renewal will only apply if (1) the
lease renewal is in writing and (2) the lease renewal specifically states a term of, and
remains in force for, a period in excess of 90 continuous days.
For purposes of computing the maximum tax, South Carolina Code §56-3-20 provides the
definitions of motor vehicle, motorcycle, vehicle, trailer, semitrailer, pole trailer, and truck tractor.
SOUTH CAROLINA EXCEPTIONS TO THE MAXIMUM TAX
The sales and use taxes are imposed at the rate of 6% 2 for the sale or lease of tangible personal
property not subject to a maximum tax. In addition, local taxes administered and collected by
the Department on behalf of local jurisdictions apply to the sale or lease of tangible
personal property not subject to a maximum tax.

1

The provisions of South Carolina Code §12-36-1110 which increased the sales and use tax rate from 5% to 6%
effective June 1, 2007 do not apply to the sale or lease of tangible personal property subject to the maximum tax.
2
The provisions of South Carolina Code §12-36-1110 increased the sales and use tax rate from 5% to 6% effective
June 1, 2007. This increase applies to trailers and semitrailers that are not subject to the maximum tax.

4

The following are examples of tangible personal property the sale or lease of which are not
subject to the maximum tax:
■ trailers or semitrailers capable of being pulled by vehicles other than a truck tractor;
■ pole trailers;
■ boat trailers; and,
■ all terrain vehicles, legend race cars, and other items not meeting the definition of a motor
vehicle.
Note: Sales or leases of these items are subject to a state tax rate of 6%, plus any applicable
local sales and use tax.

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WORKSHEET EXAMPLE - SALE OF A MOTOR VEHICLE TO A NONRESIDENT
This worksheet calculates the State sales tax. Sales of these items are subject to the $300 maximum State sales
tax and are not subject to any applicable local sales tax.
Purchaser’s Name
Purchaser’s State of Residence
Purchaser’s State Sales Tax Rate
Trade-in Allowed

John Doe
Alabama
2%
x
Yes

No

Computation of Tax Based on Alabama's State Sales Tax Rate

1. Sales Price
   $28,000
   (Enter amount on Sales Tax Return (ST-455) as Item 1 on Worksheet #1 and as Item 10 on Worksheet #3)
2. Less: Trade-in (if allowed in purchaser’s state)

$ 8,000

3. Measure of Tax (Line 1 less line 2)

$20,000

4. Multiply by Purchaser’s State Sales Tax Rate (Not to exceed 5%)
5. Tax Due Based on Purchaser’s State Sales Tax Rate

2%
$ 400

Computation of Tax Based on South Carolina State Sales Tax Rate and Maximum Tax

6. Sales Price (Line 1)

$28,000

7. Less: Trade-in

$ 8,000

8. Measure of Tax (Line 6 less line 7)

$20,000

9. Multiply by SC State Sales Tax Rate (5%)

5%

10. Maximum Tax (This amount may not exceed $300.)

$

300

Computation of the State Sales Tax due South Carolina and Allowable Deductions on the Sales Tax Return

11. SC State Sales Tax Due (Lesser of Line 5 or Line 10)
12. SC State Sales Tax Rate

$

300
5%

13. Basis for Tax at SC State Rate (Line 11 divided by Line 12)

$ 6,000

14. Measure of Tax from Line 3

$20,000

15. Less: Basis for Tax at SC State Rate (Line 13)

$ 6,000

16. Deduction for Excess Sales Price* (Line 14 less Line 15)

$14,000

17. Trade-in Allowed* (Line 2)

$ 8,000

18. Total Deductions (Line 16 plus Line 17)

$22,000

*Enter type and amount on the “Deduction” line (Item 13) of the Worksheet on the Sales Tax Return (ST-455).

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WORKSHEET #1: SALES OF MOTOR VEHICLES TO NONRESIDENTS
This worksheet calculates the State sales tax. Sales of these items are subject to the $300 maximum
State sales tax and are not subject to any applicable local sales tax.
Purchaser’s Name
Purchaser’s State of Residence
Purchaser’s State Sales Tax Rate
Trade-in Allowed

Yes

%
No

Computation of Tax Based on Purchaser's State Sales Tax Rate

1. Sales Price
   (Enter amount on Sales Tax Return (ST-455) as Item 1 on Worksheet #1 and as Item 10 on Worksheet #3)
2. Less: Trade-in (if allowed in purchaser’s state)
3. Measure of Tax (Line 1 less line 2)
4. Multiply by Purchaser’s State Sales Tax Rate (Not to exceed 5%)
5. Tax Due Based on Purchaser’s State Sales Tax Rate
   Computation of Tax Based on South Carolina State Sales Tax Rate and Maximum Tax
6. Sales Price (Line 1)
7. Less: Trade-in
8. Measure of Tax (Line 6 less line 7)
9. Multiply by SC State Sales Tax Rate (5%)

5%

10. Maximum Tax (This amount may not exceed $300.)
    Computation of the State Sales Tax due South Carolina and Allowable Deductions on the Sales Tax Return
11. SC State Sales Tax Due (Lesser of Line 5 or Line 10)
12. SC State Sales Tax Rate (5%)

5%

13. Basis for Tax at SC State Rate (Line 11 divided by Line 12)
14. Measure of Tax from Line 3
15. Less: Basis for Tax at SC State Rate (Line 13)
16. Deduction for Excess Sales Price* (Line 14 less Line 15)
17. Trade-in Allowed* (Line 2)
18. Total Deductions (Line 16 plus Line 17)
    *Enter type and amount on the “Deduction” line (Item 13) of the Worksheet on the Sales Tax Return (ST-455).

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WORKSHEET #2: SALES TO NONRESIDENTS OF TRAILERS AND SEMITRAILERS
PULLED BY A TRUCK TRACTOR; RECREATIONAL VEHICLES; FIRE EDUCATION
TRAILERS; AND HORSE TRAILERS
This worksheet calculates the State sales tax. Sales of these items are subject to the $300 maximum
State sales tax and are not subject to any applicable local sales tax.
Purchaser's Name
Purchaser's State of Residence
Purchaser's State Sales Tax Rate
Trade-in Allowed

Yes

%
No

Computation of Tax Based on Purchaser's State Sales Tax Rate

1. Sales Price
   (Enter amount on Sales Tax Return (ST-455) as Item 1 on Worksheet #1 and as Item 10 on Worksheet #3)
2. Less: Trade-in (if allowed in purchaser’s state)
3. Measure of Tax (Line 1 less Line 2)
4. Multiply by Purchaser’s State Sales Tax Rate (Not to exceed 5%)
5. Tax Due Based on Purchaser’s State Sales Tax Rate
   Computation of Tax Based on South Carolina State Sales Tax Rate and Maximum Tax
6. Sales Price (Line 1)
7. Less: Trade-in
8. Measure of Tax (Line 6 less line 7)
9. Multiply by SC State Sales Tax Rate (5%)

5%

10. Maximum Tax (This amount may not exceed $300.00)
    Computation of the State Sales Tax due South Carolina and Allowable Deductions on the Sales Tax Return
11. SC State Sales Tax Due (Lesser of Line 5 or Line 10)
12. SC State Sales Tax Rate (5%)

5%

13. Basis for Tax at SC State Rate (Line 11 divided by Line 12)
14. Measure of Tax from Line 3
15. Less: Basis for Tax at SC State Rate (Line 13)
16. Deduction for Excess Sales Price* (Line 14 less Line 15)
17. Trade-in Allowed* (Line 2)
18. Total Deductions (Line 16 plus Line 17)
    *Enter type and amount on the “Deduction” line (Item 13) of the Worksheet on the Sales Tax Return (ST-455).

8

WORKSHEET #3: SALES TO NONRESIDENTS OF POLE TRAILERS AND TRAILERS
OR SEMITRAILERS PULLED BY A VEHICLE OTHER THAN A TRUCK TRACTOR
This worksheet only calculates the State sales tax. Sales of these items are not subject to the $300
maximum State sales tax; however, sales of these items are subject to any applicable local sales tax.
Purchaser’s Name
Purchaser’s State of Residence
Purchaser’s State Sales Tax Rate
Trade-in Allowed

Yes

%
No

Computation of Tax Based on Purchaser's State Sales Tax Rate

1. Sales Price (Enter amount on Sales Tax Return, Item 1 of Tax Return Worksheet)
2. Less: Trade-in (if allowed in purchaser’s state)
3. Measure of Tax (Line 1 less Line 2)
4. Multiply by Purchaser’s State Sales Tax Rate (Not to exceed 6%)
5. Tax Due Based on Purchaser’s State Sales Tax Rate

Computation of Tax Based on South Carolina State Sales Tax Rate

6. Sales Price (Line 1)
7. Less: Trade-in
8. Measure of Tax (Line 6 less line 7)
9. Multiply by SC State Sales Tax Rate (6%)

6%

10. Sales Tax Due Based on SC Law (This amount may exceed $300.)

Computation of the State Sales Tax due South Carolina and Allowable Deductions on the Sales Tax Return

11. SC State Sales Tax Due (Lesser of Line 5 or Line 10)
12. SC State Sales Tax Rate (6%)

6%

13. Basis for Tax at SC State Rate** (Line 11 divided by Line 12)
14. Measure of Tax from Line 3
15. Less: Basis for Tax at SC State Rate (Line 13)
16. Deduction for Excess Sales Price* (Line 14 less Line 15)
17. Trade-in Allowed* (Line 2)
18. Total Deductions (Line 16 plus Line 17)
    Enter type and amount on the “Deduction” line (Item 4) of the Worksheet on the ST-3, or ST-403, Sales Tax Return or on
    the “Deduction” line (Item 7) of Worksheet #2 of the ST-455, Sales Tax Return.
    *This amount (Line 13 of this Worksheet) is the basis upon which any applicable local sales tax is computed (Local Taxes
    are reported on Form ST-389).

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