When did South Carolina's infrastructure maintenance fee replace sales tax on vehicles and trailers under RR 18-1?
Apply this to your situation
This page answers the general question as of 2018. Ezel answers yours, under current South Carolina tax law, with citations.
Plain-English summary
South Carolina Revenue Ruling #18-1 is the Department's broad guide to the infrastructure maintenance fee (IMF) enacted by Act No. 40 of 2017 and the remaining sales-tax rules for vehicles and trailers.
Beginning July 1, 2017, an item required to be registered under Chapter 3 of Title 56 generally became subject to the IMF when first registered with the South Carolina DMV. The related sale was exempt from state and local sales and use tax. For a dealer sale or lease, the fee was 5% of gross proceeds, capped at $500; for a nondealer transaction, it was 5% of fair market value, capped at $500.
When the same owner first registered in another state and later registered the item in South Carolina, the ruling states a $250 IMF applied, with an exception for active-duty military members, spouses, and dependents. Licensed dealers generally collected and remitted the fee to the DMV.
Items not required to be registered remained under sales and use tax. A maximum-tax item was generally taxed at 5% up to $500 with no local tax; an item outside the maximum-tax list was taxed at 6% plus applicable local tax. Personal-use utility and boat trailers, for example, were not required to be registered under the ruling and were taxed at the ordinary state and local rates, while business-use trailers required registration and triggered the IMF.
What this means for you
South Carolina vehicle buyers
Start with registration. If the item must be registered with the DMV, the IMF generally replaces sales and use tax. If not, determine whether it falls under the $500 maximum-tax statute or the ordinary state-plus-local rate.
Dealers
Report exempt IMF sales in gross proceeds on the sales-tax return and take the exemption deduction, while separately collecting and remitting the IMF to the DMV. Parts, short-term rentals, and other non-IMF transactions remain reportable under their own sales-tax rules.
Nonresident buyers
For a vehicle registered in the buyer's home state, the ruling generally used the lesser of the home-state tax or South Carolina's 5% rate capped at $500. No South Carolina tax was due when the home state imposed no tax or allowed no credit for South Carolina tax, subject to the specific item and exemption rules.
Lessors and renters
Long-term written leases of covered items could qualify for maximum-tax or IMF treatment. Short-term motor-vehicle rentals remained subject to sales tax on rental gross proceeds rather than the IMF framework described for registration transactions.
Common questions
Q: Does the casual excise tax still apply to cars and motorcycles?
A: No. The ruling says it stopped applying to motor vehicles and motorcycles on July 1, 2017; the IMF replaced it at registration.
Q: Is a personal utility trailer subject to the IMF?
A: Under RR #18-1, no. Because it was not required to be registered, it was subject to 6% state tax plus applicable local tax.
Q: Is RR 18-1's treatment of ATVs and golf carts still valid?
A: No. RR #23-3 superseded the relevant questions and treats motorized, self-propelled wheeled vehicles not running on rails as motor vehicles for the maximum-tax rule.
Q: Are sales to active-duty military automatically exempt?
A: Not automatically. RR #18-1 gives specific resident, nonresident, domicile, business-use, and home-state fee conditions that must be satisfied.
Citations and references
- S.C. Code Ann. § 12-36-2120(83) — exemption for transactions subject to the IMF
- S.C. Code Ann. § 12-36-2110 — maximum tax
- S.C. Code Ann. § 12-36-930 — specified nonresident vehicle and trailer sales
- Act No. 40 of 2017 — infrastructure-maintenance-fee legislation
- SC Revenue Ruling #23-3 — later maximum-tax definition modifying RR #18-1
Source
- Landing page: SC Advisory Opinion Search
- Original PDF: RR18-1.pdf
Original ruling text
STATE OF SOUTH CAROLINA
DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 12265, Columbia, South Carolina 29211
SC REVENUE RULING #18-1
SUBJECT:
Motor Vehicles, Motorcycles, Trailers, Semitrailers, Pole Trailers and
Other Vehicles
(Sales and Use Tax)
EFFECTIVE DATE: July 1, 2017
SUPERSEDES:
SC Revenue Ruling #10-6 1, SC Revenue Ruling #05-4, SC Revenue
Advisory Bulletin #00-03 2, SC Revenue Ruling #97-5, and all previous
advisory opinions and any oral directives in conflict herewith.
REFERENCES:
Title 12, Chapter 36 of the S.C. Code of Laws (2014, Supp. 2016)
Act 40 of 2017, Sections 5 and 7 (Enacted May 10, 2017)
AUTHORITY:
S.C. Code Ann. Section 12-4-320 (2014)
S.C. Code Ann. Section 1-23-10(4) (2005)
SC Revenue Procedure #09-3
SCOPE:
The purpose of a Revenue Ruling is to provide guidance to the public. It
is an advisory opinion issued to apply principles of tax law to a set of facts
or general category of taxpayers. It is the Department’s position until
superseded or modified by a change in statute, regulation, court decision,
or another Department advisory opinion.
INTRODUCTION:
South Carolina imposes a sales and use tax on persons engaged in the business of selling tangible
personal property at retail, including motor vehicles, motorcycles, trailers, semitrailers, and pole
trailers. However, effective July 1, 2017, sales or purchases of most motor vehicles, motorcycles,
trailers, semitrailers, and pole trailers are subject to a new Infrastructure Maintenance Fee instead
of a sales and use tax or a casual excise tax.
1
2
See Question #29 of this advisory opinion (SC Revenue Ruling #18-1).
See Questions #31 and 33 of this advisory opinion (SC Revenue Ruling #18-1).
1
Infrastructure Maintenance Fee
The General Assembly recently enacted the South Carolina Infrastructure and Economic
Development Reform Act to address the needs of South Carolina’s transportation infrastructure
system. As part of its effort to improve the State’s transportation infrastructure network, a new
infrastructure maintenance fee became effective July 1, 2017.
Registration in South Carolina upon Purchase or Lease: The owner of each vehicle, trailer,
semitrailer or other item that must be registered pursuant to Chapter 3 of Title 56 must pay the
infrastructure maintenance fee upon first registering the vehicle, trailer, semitrailer or other item
with the SC Department of Motor Vehicles (“SCDMV”). The infrastructure maintenance fee is
remitted to SCDMV and is imposed at a rate of 5% of the gross proceeds of the sale, not to
exceed $500, for a sale by a licensed SCDMV dealer, or 5% of the vehicle’s fair market value,
not to exceed $500, for a sale by a person who is not a SCDMV licensed dealer.
Sales that are subject to the new infrastructure maintenance fee are exempt from state and local
sales and use taxes (Code Section 12-36-2120(83)).
If a dealer has a South Carolina retail license or offers to license and register the item, then the
dealer must collect the infrastructure maintenance fee and remit it to SCDMV. Generally, based
on information from SCDMV, a dealer is a person in the business of selling motor vehicles (e.g.,
cars, trucks, motorcycles, and motor homes) that is licensed with SCDMV. A dealer also
includes, effective November 19, 2018, a person licensed with SCDMV in the business of selling
mopeds.
Registration in South Carolina after First Registration in Another State: The infrastructure
maintenance fee is also imposed when a vehicle, trailer, semitrailer or other item required to be
registered under Chapter 3 of Title 56 was first registered in another state by the owner and is
subsequently registered for the first time in South Carolina by the same owner. This
infrastructure maintenance fee is $250, but it does not apply to active duty members of the
military, their spouses, and their dependents.
Sales and Use Tax and Casual Excise Tax
Sales of vehicles by persons engaged in the business of selling tangible personal property at
retail that are not required to be registered with SCDMV under Chapter 3 of Title 56 are subject
to the sales and use tax. The tax due on such sales depends on whether the vehicle is subject to
the maximum tax provisions of Code Section 12-36-2110 and whether the vehicle will be
registered by the purchaser in his state of residence.
If the sale of a vehicle is subject to the maximum tax provisions of Code Section 12-36-2110,
then the sales and use tax is imposed at a rate of 5% of “gross proceeds of sales” or “sales price,”
not to exceed $500. Local sales and use taxes do not apply.
2
If the sale of a vehicle is not subject to the maximum tax provisions of Code Section 12-36-2110,
then the sales and use tax is imposed at a rate of 6% of “gross proceeds of sales” or “sales price,”
plus any applicable local sales and use tax.
However, if the vehicle is a motor vehicle, or a trailer, semitrailer, or pole trailer of a type to be
registered and licensed, and is sold to a nonresident for registration in his state of residence, then
the sales tax is imposed at the lesser of the sales tax due in the purchaser’s state of residence or
the sales tax due in South Carolina, unless the sale is otherwise excluded or exempted from the
South Carolina sales and use tax. However, no sales tax is due in South Carolina if the
nonresident purchaser cannot receive a credit in his state of residence for sales tax paid to South
Carolina.
The casual excise tax, which is imposed upon the issuance of a certificate of title or other proof
of ownership for certain items, no longer applies to motor vehicles and motorcycles effective
July 1, 2017.
GENERAL SUMMARY:
The application of the new infrastructure maintenance fee or the sales and use tax on the sale or
purchase of a vehicle can generally be summarized as follows (unless the transaction is otherwise
exempt):
General Rule:
•
If the vehicle is required to be registered under Chapter 3 of Title 56 and is registered
with the SCDMV, the infrastructure maintenance fee applies and is remitted to the
SCDMV. The sale or purchase of a vehicle that is subject to the infrastructure
maintenance fee is exempt from state and local sales and use taxes.
•
If the vehicle is of a type that is not required to be registered with the SCDMV, then the
sales and use tax would apply and is remitted to the Department of Revenue (e.g., a
utility trailer purchased for personal use).
Sales to Nonresidents:
Maximum Tax Items
•
If the vehicle is subject to the maximum tax provisions of Code Section 12-362110(A)(1) (e.g., motor vehicle, motorcycle, recreational vehicle), is of a type that would
be registered in South Carolina if not for it being registered out-of-state, and is sold by an
SCDMV licensed dealer to a nonresident who will register it in his home state, then the
sales tax applies and is remitted to the SCDMV. (Note: The sales tax imposed on such
sales to a nonresident by a person who is not a licensed SCDMV dealer are remitted to
the Department of Revenue.)
3
However, based on Code Section 12-36-930 and Code Section 12-36-2120, the sales tax
is not due if (1) the purchaser’s state of residence does not impose a sales tax on the
motor vehicle, trailer, semitrailer or pole trailer, (2) the purchaser’s state of residence
does not allow a credit for sales tax paid in South Carolina on the motor vehicle, trailer,
semitrailer or pole trailer, or (3) the sale is otherwise exempt from the sales tax.
Items Not Subject to the Maximum Tax
•
If the vehicle is a trailer, semitrailer or pole trailer that is not subject to the maximum tax
provisions of Code Section 12-36-2120(A)(1), is of a type required to be licensed and
registered, and is sold to a nonresident who will register it in his home state, then the
sales tax applies and it is remitted to the Department of Revenue.
However, based on Code Section 12-36-930 and Code Section 12-36-2120, the sales tax
is not due if (1) the purchaser’s state of residence does not impose a sales tax on the
trailer, semitrailer or pole trailer, (2) the purchaser’s state of residence does not allow a
credit for sales tax paid in South Carolina on the trailer, semitrailer or pole trailer, or (3)
the sale is otherwise exempt from the sales tax.
•
If the vehicle is a trailer, semitrailer or pole trailer that is not subject to the maximum tax
provisions of Code Section 12-36-2110(A)(1), is of a type not required to be licensed and
registered, and is sold to a nonresident, then the sales tax applies and it is remitted to the
Department of Revenue, unless the sale is otherwise exempt from the sales tax.
Casual Excise Tax:
•
The casual excise tax no longer applies to motor vehicles and motorcycles. Effective July
1, 2017, the casual excise tax only applies to aircraft, boats and boat motors. The
infrastructure maintenance fee, however, is paid on motor vehicles and motorcycles at the
time of registration with SCDMV under the above rules.
Note: SC Information Letter #17-10 provides charts that include the applicable rate for the
infrastructure maintenance fee or the sales and use tax for each of the above scenarios and also
provides general information, including information on exemptions for active duty military
members.
PURPOSE:
The purpose of this advisory opinion is to provide additional guidance in a question and answer
format with respect to the application of the sales and use tax to sales or purchases of motor
vehicles, motorcycles, trailers, semitrailers and pole trailers on or after July 1, 2017. It will
address issues involving sales to residents and nonresidents, sales of farm trailers, sales by
nonretailers (i.e., casual sales), leases and short-term rentals of motor vehicles, and sales to
resident and nonresident members of the military and their spouses.
4
DEFINITIONS:
For purposes of this document, the terms “dealer”, “retailer”, and “nonretailer” are defined as
follows:
Dealer: A person in the business of selling motor vehicles (e.g., cars, trucks, motorcycles,
and motor homes) that is licensed with SCDMV.
Retailer: A person engaged in the business of selling tangible personal property
(including, but not limited to motor vehicles, motorcycles, and motor homes) at retail. A
person engaged in the business of selling tangible personal property at retail in South
Carolina must obtained a retail license from the Department of Revenue.
Nonretailer: A person not engaged in the business of selling tangible personal property at
retail. However, a nonretailer may sell tangible personal property on a casual and isolated
basis, such as an individual who may sell his 20-year-old car because he plans to
purchase a new car from a dealer. For more information on casual and isolated sales, see
SC Regulation 117-322.
QUESTIONS AND ANSWERS:
General Guidance
- Are sales of motor vehicles by a retailer licensed as a “dealer” with the SCDMV subject
to the sales and use tax?
For sales on or after July 1, 2017, the application of the sales and use tax on sales of
motor vehicles by a retailer licensed as a “dealer” with the SCDMV is as follows:
(a) Sales of motor vehicles to residents for registration in South Carolina are exempt
from the sales and use tax under Code Section 12-36-2120(83) since such sales
are subject to an infrastructure maintenance fee (“IMF”) upon registration of the
motor vehicle at the SCDMV. The IMF is remitted by the dealer to the SCDMV.
(b) Sales of motor vehicles to nonresidents who will register the motor vehicle in
South Carolina with the SCDMV are exempt from the sales and use tax under
Code Section 12-36-2120(83) since such sales are subject to an IMF upon
registration of the motor vehicle at the SCDMV. The IMF is remitted by the
dealer to the SCDMV.
(c) Sales of motor vehicles to nonresidents who will register the motor vehicle in
their state of residence are subject to the sales tax in South Carolina at the lesser
of the sales tax due in the purchaser’s state of residence or 5% of the gross
proceeds of sales, but no more than $500. This sales tax is paid to the SCDMV.
5
Note: If the purchaser’s state of residence does not impose a sales tax on the
purchase of a motor vehicle or does not allow the purchaser a credit against its use
tax for a sales tax paid on the motor vehicle in South Carolina, then the sale of the
motor vehicle is not subject to the South Carolina sales tax. See SC Information
Letter #14-2.
- Are sales by a retailer of trailers, semitrailers, and pole trailers subject to the sales and use
tax?
The application of the state sales and use tax on sales of trailers, semitrailers, and pole
trailers by a retailer depends on the type and use of the trailer, semitrailer, and pole
trailer. For information concerning specific trailers, semitrailers and pole trailers, see the
questions below. - What is the rate of the IMF?
The IMF is calculated as follows:
(a) For purchases or leases from a person licensed as a dealer with the SCDMV, the IMF
is 5% of the “gross proceeds of sales” of the purchase or lease, but no more than
$500. The term “gross proceeds of sales” is defined in the same manner as in Code
Section 12-36-90 of the sales and use tax law. 3
(b) For purchases or leases from a person not licensed as a dealer with the SCDMV, the
IMF is 5% of the “fair market value” of the vehicle, but no more than $500. 4
The IMF is remitted to the SCDMV upon registration of the motor vehicle at the
SCDMV.
Note: An IMF in the amount of $250 is also due on motor vehicles and other items
required to be registered with the SCDMV that were first registered in another state but
which were subsequently registered in South Carolina by the same owner. For example,
if a person is a resident of Virginia and his motor vehicle is registered with the State of
Virginia, and that person later moves to South Carolina, the registration by that person of
that same motor vehicle in South Carolina is subject to an IMF of $250.
3
Generally, the term “gross proceeds of sales” is defined in Code Section 12-36-90 as the value proceeding or accruing
from the sale of tangible personal property, without any deductions for the cost of goods sold; the cost of materials,
labor, or service; interest paid; losses; transportation costs; manufacturers or importers excise taxes imposed by the
United States; or any other expenses. It does not, however, include the value of any trade-in.
4
“Fair market value” is defined in Code Section 56-3-627(C)(4) to mean the total purchase price less any trade-in,
or the valuation shown in a national publication of used values adopted by the Department, less any trade-in.
6
4. Are motor vehicles, motorcycles, trailers and semitrailers subject to a maximum sales and
use tax?
The sales and use taxes are imposed at the rate of 5% for the sale or lease of certain
tangible personal property subject to a 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.
A $500 maximum tax applies to each sale or each lease of the following items:
motor vehicles;
motorcycles (on-road or off-road);
recreational vehicles, including tent campers, travel trailers, park trailers,
motor homes and fifth wheels;
boats;
aircraft;
trailers or semitrailers capable of being pulled only by a truck tractor;
self-propelled light construction equipment with compatible attachments
limited to a maximum of 160 net engine horsepower;
fire safety education trailers; and
horse trailers.
In order for the lease of any of the above items to qualify for the $500 maximum tax, the
lease must be in writing and 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 apply only 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.
A maximum tax does not apply to the sale or lease of the following items:
trailers or semitrailers capable of being pulled by a vehicle other than a
truck tractor;
pole trailers;
boat trailers;
self-propelled light construction equipment with compatible attachments
with a net engine horsepower that exceeds 160; and
all-terrain vehicles, legend race cars, golf carts and any other items not
meeting the definition of a motor vehicle.
Sales or leases of these items not subject to the maximum tax are subject to a state tax
rate of 6%, plus any applicable local sales and use tax.
Note: If an item subject to the maximum sales and use tax is required to be registered
with the SCDMV under Chapter 3 of Title 56, then the sale on that item is exempt from
the sales and use tax and is subject to the IMF.
7
Sales by a Retailer of Motor Vehicles, Motorcycles, Mopeds, Trailers, and Semitrailers to
Residents of South Carolina
- Are sales by a retailer of motor vehicles and motorcycles to residents of South Carolina
for registration in South Carolina subject to the sales and use tax?
No. However, such motor vehicles and motorcycles are subject to an IMF upon
registration at the SCDMV.
Note: See Question #30 concerning dirt bikes. - Are sales by a retailer of trailers and semitrailers that can only be pulled by a truck tractor
to residents of South Carolina for registration in South Carolina subject to the sales and
use tax?
No. However, the trailer or semitrailer is subject to an IMF upon registration at the
SCDMV. - Are sales by a retailer of pole trailers to residents of South Carolina for registration in
South Carolina subject to the sales and use tax?
No. However, the pole trailer is subject to an IMF upon registration at the SCDMV. - Are sales by a retailer of utility trailers and boat trailers that will be used for business
purposes to residents of South Carolina subject to the sales and use tax?
No. However, utility trailers and boat trailers that will be used for business purposes in
South Carolina must be registered with the SCDMV and are therefore subject to an IMF
upon registration at the SCDMV. - Are sales by a retailer of utility trailers and boat trailers that will be used for personal
purposes to residents of South Carolina subject to the sales and use tax?
Yes. Since utility trailers and boat trailers that will be used for personal purposes are not
required to be registered with the SCDMV, such sales are subject to the sales and use tax
and are not subject to an IMF. The sales and use tax is imposed on sales of utility trailers
and boat trailers used for personal purposes at a rate of 6%, plus any applicable local
sales and use tax. - Are sales by a retailer of recreational vehicles that are pulled by a motor vehicle (e.g.,
tent campers, travel trailers, park models, park trailers, and fifth wheels) to residents of
South Carolina for registration in South Carolina subject to the sales and use tax?
No. However, recreational vehicles that are pulled by a motor vehicle, such as tent
campers, travel trailers, park models, park trailers, and fifth wheels, are subject to an IMF
upon registration at the SCDMV.
8
11. Are sales by a retailer of mopeds to residents of South Carolina for registration in South
Carolina subject to the sales and use tax?
For sales of mopeds prior to November 19, 2018, the sale of a moped is subject to the
sales and use tax. The tax is imposed at a rate of 6%, plus any applicable local sales and
use tax.
For sales of mopeds on or after November 19, 2018, the sale of a moped is not subject to
the sales and use tax. The sale of a moped on or after November 19, 2018 is subject to the
IMF upon registration with the SCDMV.
Sales by a Retailer of Motor Vehicles, Motorcycles, Mopeds, Trailers, and Semitrailers to
Nonresidents
- Are sales by a retailer of motor vehicles for registration in South Carolina subject to the
sales and use tax?
No. However, the motor vehicle is subject to an IMF upon registration at the SCDMV. - Are sales by a retailer of motor vehicles to nonresidents for registration in their state of
residence subject to the sales and use tax?
`
Yes. However, the calculation of the tax depends on the purchaser’s state of residence.
Sales of motor vehicles to nonresidents who will register the motor vehicle in their state
of residence are subject to the sales tax at the lesser of the sales tax due in the purchaser’s
state of residence or 5%, but no more than $500. When purchased from a licensed
SCDMV dealer, this sales tax is paid to the SCDMV.
If the purchaser’s state of residence does not impose a sales tax on the purchase of a
motor vehicle or does not allow the purchaser a credit against its use tax for a sales tax
paid on the motor vehicle in South Carolina, then the sale of the motor vehicle is not
subject to the South Carolina sales tax.
For additional information on sales to nonresidents of motor vehicles, see SC Information
Letter #14-2.
Note: If the seller delivers the motor vehicle to the nonresident at a point outside of South
Carolina, or delivers the vehicle to a common carrier who will deliver the motor vehicle
to the nonresident at a point outside South Carolina, then the sale is exempt from the tax
under Code Section 12-36-2120(36).
9
14. Are sales by a retailer to nonresidents of trailers and semitrailers of a type required to be
registered for registration in their state of residence subject to the sales and use tax?
`
Yes. However, the calculation of the tax depends on the purchaser’s state of residence
and whether the trailer or semitrailer is subject to the maximum sales and use tax in Code
Section 12-36-2110.
(a) If the trailer or semitrailer is subject to the maximum tax of $500 under Code
Section 12-36-2110, then the sale is subject to the sales tax at the lesser of the
sales tax due in the purchaser’s state of residence or 5%, but no more than
$500. When purchased from a licensed SCDMV dealer, this sales tax is
paid to the SCDMV.
(b) If the trailer or semitrailer is not subject to the maximum tax of $500 under
Code Section 12-36-2110, then the sale is subject to the sales tax at the lesser
of the sales tax due in the purchaser’s state of residence or 6% plus any
applicable local sales tax. This sales tax is paid to the Department of
Revenue.
If the purchaser’s state of residence does not impose a sales tax on the purchase of a
trailer or semitrailer of a type required to be registered or does not allow the purchaser a
credit against its use tax for a sales tax paid on the trailer or semitrailer in South Carolina,
then the sale of the trailer or semitrailer is not subject to the South Carolina sales tax.
For additional information on sales to nonresidents of trailers and semitrailers of a type
required to be registered, see SC Information Letter #14-2.
Note: If the seller delivers the trailer or semitrailer to the nonresident at a point outside of
South Carolina, or delivers the vehicle to a common carrier who will deliver the trailer or
semitrailer to the nonresident at a point outside South Carolina, then the sale is exempt
from the tax under Code Section 12-36-2120(36).
- Are sales by a retailer to nonresidents of trailers and semitrailers of a type that are not
required to be registered subject to the sales and use tax?
Yes. Sales to nonresidents of trailers and semitrailers of a type that are not required to be
registered are subject to the sales and use tax at a rate of 6% plus any applicable local
sales tax.
Note: If the seller delivers the trailer or semitrailer to the nonresident at a point outside of
South Carolina, or delivers the vehicle to a common carrier who will deliver the trailer or
semitrailer to the nonresident at a point outside South Carolina, then the sale is exempt
from the tax under Code Section 12-36-2120(36).
10
16. Is the guidance provided in SC Information Letter #14-2 the most recent sales tax
guidance available from the Department of Revenue regarding purchases by nonresidents
from surrounding states?
Yes, as of the date of this advisory opinion, SC Information Letter #14-2 is the most
recent sales tax guidance available from the Department of Revenue regarding purchases
by nonresidents from surrounding states. However, sellers should monitor the “Law and
Policy” section of the Department’s website from time to time to determine if a new
information letter has been issued with respect to motor vehicles, and trailers,
semitrailers, and pole trailers of a type to be licensed and registered, which are sold to
nonresidents.
- Can SC Form ST-385, the “Affidavit for Intent to License Motor Vehicle, Trailer,
Semitrailer or Pole Trailer Purchased in South Carolina in Purchaser’s State of
Residence,” still be used for sales to nonresidents by licensed SCDMV dealers of motor
vehicles and trailers, semitrailers, and pole trailers of a type to be registered and licensed?
Yes, as of the date of this advisory opinion, SC Form ST-385 can still be used with
respect to such sales to nonresidents.
Sales by a Retailer of Farm Trailers for Use in Farming Crops for Sale
- Are sales by a retailer of farm trailers that will be used in farming crops for sale subject to
the sales and use tax?
Sales of flatbed trailers or stock trailers for use in farming in hauling farm crops (e.g.,
hay, corn, peaches) are exempt under Code Section 12-36-2120(16) if the flatbed trailer
or stock trailer will be used solely in the “planting, cultivating, or harvesting” of farm
crops for sale in their “original state of production or preparation for sale.”
Sales of flatbed trailers or stock trailers are not exempt under Code Section 12-362120(16) if the flatbed trailer or stock trailer will be used solely for a purpose other than
the “planting, cultivating, or harvesting” of farm crops (e.g., hay, corn, peaches) for sale
in their “original state of production or preparation for sale.” For example, sales of
flatbed or stock trailers for use solely in:
(a) hauling tractors, harvesting equipment, or cattle; or
(b) hauling farm crops (e.g., hay, corn, peaches) from a storage area to market or
to a buyer
are not exempt from the sales and use tax under Code Section 12-36-2120(16).
11
Sales of flatbed trailers or stock trailers that will be used for both exempt and nonexempt
purposes are exempt from the sales and use tax if used substantially (not merely
incidentally) in the “planting, cultivating, or harvesting” of farm crops (i.e., hay, corn,
peaches) for sale in their “original state of production or preparation for sale.”
For more detail regarding this exemption, see SC Revenue Ruling #99-3.
Note: If a farm trailer is exempt from the sales and use tax under Code Section 12-362120(16), then it is exempt from the IMF.
Sales by a Nonretailer of Motor Vehicles, Motorcycles, Mopeds, Trailers, and Semitrailers
(Casual Sales)
- Are sales by a nonretailer of motor vehicles and motorcycles subject to the sales and use
tax or casual excise tax? 5
No. However, such motor vehicles and motorcycles are subject to an IMF upon
registration of the motor vehicle or motorcycle at the SCDMV. - Are sales by a nonretailer of mopeds subject to the sales and use tax or casual excise tax?
No. However, mopeds sold by a nonretailer on or after November 19, 2018 are subject to
an IMF upon registration of the moped at the SCDMV. - Are sales by a nonretailer of trailers and semitrailers subject to the sales and use tax or
casual excise tax?
No. However, trailers and semitrailers of a type required to be registered with the
SCDMV under Chapter 3 of Title 56 are subject to an IMF upon registration of the trailer
and semitrailer at the SCDMV.
Leases and Short-Term Rentals of Motor Vehicles
- Are leases of motor vehicles by a retailer licensed as a “dealer” with the SCDMV, which
upon leasing the motor vehicles must be registered with the SCDMV, subject to the sales
and use tax?
For leases executed on or after July 1, 2017, the application of the state sales and use
tax on the lease of a motor vehicle by a retailer licensed as a “dealer” with the SCDMV is
as follows:
5
The casual excise tax is imposed under Code Section 12-36-1710 on the issuance of a certificate of title or other
proof of ownership of a boat, boat motor, or airplane. It is intended to apply to the sale by a nonretailer of a boat,
boat motor, or airplane. Prior to July, 1, 2017, the casual excise tax also applied to the sale by a nonretailer of a
motor vehicle or motorcycle. On or after July 1, 2017, the sale of a motor vehicle or a motorcycle for registration in
South Carolina is subject to the IMF upon registration at the SCDMV.
12
(a) Leases of motor vehicles to residents for registration in South Carolina are exempt
from the state sales and use tax under Code Section 12-36-2120(83) since such
leases are subject to the IMF upon registration of the motor vehicle at the
SCDMV.
(b) Leases of motor vehicles to nonresidents who will register the motor vehicle in
South Carolina with the SCDMV are exempt from the state sales and use tax
under Code Section 12-36-2120(83) since such leases are subject to an IMF upon
registration of the motor vehicle at the SCDMV.
(c) Leases of motor vehicles to nonresidents who will register the motor vehicle in
their state of residence are subject to the sales tax at the lesser of the sales tax due
in the purchaser’s state of residence or 5%, but no more than $500. This sales tax
is paid to the SCDMV. (Local sales and use taxes do not apply to sales or lease
of motor vehicles subject to the IMF or to the maximum sales tax.)
Note: If the lessee’s state of residence does not impose a sales tax on the lease of
a motor vehicle or does not allow the lessee a credit against its use tax for a sales
tax paid on the motor vehicle in South Carolina, then the lease of the motor
vehicle is not subject to the South Carolina sales tax. See SC Information Letter
14-2.
- Are motor vehicle lease payments paid to a retailer after July 1, 2017 for a motor vehicle
registered in South Carolina subject to the sales tax for leases executed prior to July 1,
2017?
Since the lease was executed prior to July 1, 2017, all lease payments are subject to the
sales tax and the maximum sales tax remains at $300 for the lease. If the $300 maximum
sales tax on the lease of the motor vehicle had not been paid in full prior to July 1, 2017,
then the tax must be remitted by the retailer to the Department of Revenue with each
lease payment until the maximum sales tax of $300 has been paid in full for that lease.
The lessor, however, has the option to remit the remainder of the tax due (up to $300) in
one payment.
Note: If the lease is renewed on or after July 1, 2017, then lease payments made as a
result of the renewal of the lease are not subject to the sales tax. - Are short-term rentals (e.g., daily, weekly) of motor vehicles subject to the sales tax?
Yes. The exemption for sales of motor vehicles subject to an IMF upon registration of the
motor vehicle at the SCDMV does not apply since short-term rentals are not registered by
the customer and therefore are not subject to an IMF.
13
For example, if a person rents a motor vehicle for a week while in South Carolina on
business, or a person rents a motor vehicle to move furniture from one location to
another, then the rental payments are subject to the sales tax and not subject to the IMF.
Note: For information on what is included in “gross proceeds” (the basis or measure of
the sales tax) for purposes of short-term motor vehicle rentals, see SC Revenue Ruling
93-1.
Sales of Motor Vehicles and Motorcycles to Members of the Military
- Are sales of motor vehicles and motorcycles to members of the military, or to spouses of
members of the military, who are residents of South Carolina for registration in South
Carolina subject to the sales tax?
No. However, the motor vehicle is subject to an IMF upon registration at the SCDMV. - Are sales of motor vehicles (excluding trucks) and motorcycles to nonresident members
of the military subject to the sales tax?
No, provided the nonresident member of the military is located in South Carolina by
reason of orders of the U.S. Armed Forces. Under South Carolina law, sales of motor
vehicles (excluding trucks) and motorcycles to nonresident members of the military
located in South Carolina by reason of orders of the U.S. Armed Forces are exempt from
the sales tax under Code Section 12-36-2120(25), regardless of the state in which the
motor vehicle or motorcycle will be registered.
However, for this exemption under Code Section 12-36-2120(25) to apply, the purchaser
must provide the vendor within ten days of the sale either:
(a) a statement from a commissioned officer of the Armed Forces of a higher rank
than the purchaser certifying that the buyer is a member of the Armed Forces on
active duty and a resident of another state; or
(b) a leave and earnings statement from the appropriate department of the armed
forces which designates the state of residence of the purchaser.
This exemption does not apply to spouses of members of the military when the spouse
purchases a motor vehicle or motorcycle in his or her name only. However, if the motor
vehicle (excluding trucks) or motorcycle is purchased in the name of both spouses, the
exemption in Code Section 12-36-2120(25) applies.
Note: See Question #27 below for information concerning sales of motor vehicles and
motorcycles to spouses of nonresident members of the Armed Forces and sales of trailers
and semitrailers to nonresident members of the military and their spouses.
14
27. Are sales of motor vehicles, motorcycles, trailers, and semitrailers to nonresident
members of the military, or to spouses of nonresident members of the military, subject to
the sales tax?
No. Under federal law known as the Servicemembers Civil Relief Act, 6 sales of motor
vehicles (including trucks), motorcycles, trailers, and semitrailers to nonresident
members of the military, or to spouses of nonresident members of the military, who are in
South Carolina by reasons of orders from the U.S. Armed Forces are not subject to the
sales tax provided:
(a) the motor vehicle or motorcycle will not be used in a trade or business; and,
(b) a license, fee, or excise tax is paid by the servicemember or the servicemember’s
spouse in the servicemember’s state of domicile or residence.
For purposes of the Servicemembers Civil Relief Act, a “motor vehicle” means a vehicle
driven or drawn by mechanical power and manufactured primarily for use on public
streets, roads and highways, but does not include a vehicle operated only on a rail line. 7
Note: See Question #26 above for information on the South Carolina sales and use tax
exemption for sales of motor vehicles (excluding trucks) and motorcycles to nonresident
members of the military.
Dealers Filing of Sales Tax Returns
- Are sales of motor vehicles and other items subject to the IMF required to be reported on
the sales and use tax return filed with the Department of Revenue?
Yes. All sales of tangible personal property, whether or not exempt from the sales and
use tax, are required to be reported on the sales and use tax return. The return includes a
Worksheet on which the retailer reports all sales of tangible personal property and also
reports as a deduction all sales exempt from the sales and use tax. By taking a deduction
for exempt sales, such as sales of motor vehicles subject to the IMF, the retailer will not
pay a sales tax on any exempt sales.
For example, if a retailer who is licensed as a dealer with the SCDMV sells $1,000,000 in
cars during the month and all sales were to residents for registration with the SCDMV,
then the dealer would report the $1,000,000 as part of his “gross proceeds of sales,” but
also take a deduction for the $1,000,000 for exempt sales (sales of motor vehicles subject
to the IMF). As such, no sales tax would be due with respect to these motor vehicle sales.
Note, however, that the dealer would still owe sales tax on the sale of parts sold at retail,
short-term rentals of motor vehicles, and other transactions not subject to the IMF and not
otherwise exempt from the sales and use tax.
Note: The licensed SCDMV dealer is, however, responsible for collecting and remitting
the IMF to the SCDMV.
6
7
50 U.S.C. Section 3901 et.seq.
See 50 U.S.C. Section 3911(8); 49 U.S.C. Section 30102(a)(7).
15
Low-Speed Vehicles, Dirt Bikes, All-Terrain Vehicles, Golf Carts, and Go-Carts
- Are sales by a retailer of low-speed vehicles subject to the sales and use tax?
Low-speed vehicles are subject to registration with the SCDMV in the same matter as a
motor vehicle. Therefore, sales of low-speed vehicles are:
(a) Subject to an IMF if sold to residents or nonresidents for registration in South
Carolina; or
(b) Subject to the sales tax if sold to nonresidents for registration in the purchaser’s state
of residence.
For sales to residents and nonresidents subject to the IMF, see Questions #5 and #12 of
this advisory opinion. For sales to nonresidents subject to a sales tax, see Question #13. - Are sales by a retailer of dirt bikes subject to the sales and use tax?
Yes. Since a dirt bike cannot be used on the roads and highways, it is not subject to
registration with the SCDMV and, therefore, not subject to an IMF. As such, sales of dirt
bikes are subject to the sales and use tax at the rate of 5% of gross proceeds of sales, but
no more than $500. - Are sales by a retailer of all-terrain vehicles (“ATVs”) subject to the sales and use tax?
Yes. Since ATVs are not required to be registered with the SCDMV, sales of ATVs are
subject to the sales and use tax at a rate of 6%, plus any applicable local sales and use
taxes. - Are sales of golf carts and go-carts subject to the sales and use tax?
Yes. Since golf carts and go-carts are not required to be registered with the SCDMV,
sales of golf carts and go-carts are subject to the sales and use tax at a rate of 6%, plus
any applicable local sales and use taxes. - Are race cars 8, including legend race cars 9, subject to the sales and use tax?
Yes. Since a race car, including a legend race car, cannot be used on the roads and
highways, it is not subject to registration with the SCDMV and, therefore, not subject to
the IMF. As such, sales of race cars, including legend race cars, are subject to the sales
and use tax at the rate of 6%, plus any applicable local sales and use taxes.
8
For purposes of this advisory opinion, a “race car” is an automobile or truck for use only on race tracks and
speedways and that is not authorized for use on the highways of South Carolina.
9
For purposes of this advisory opinion, a “legend race car” is an automobile race car powered by a motorcycle
engine for use only on race tracks and speedways and that is not authorized for use on the highways of South
Carolina.
16
Additional Information:
The Department, in SC Information Letter #17-10, issued several charts to provide
guidance regarding the application of either the sales and use tax or the IMF to sales of
motor vehicles, motorcycles, and various types of trailers, semitrailers, pole trailers, and
other items.
If you have questions regarding the new IMF remitted to the SCDMV, or sales taxes
remitted by licensed SCDMV dealers to the SCDMV on certain sales to nonresidents,
please contact the SCDMV at [email protected].
If you have questions regarding all other sales and use tax matters, please contact the
SCDOR at (803) 898-5000 or [email protected].
SOUTH CAROLINA DEPARTMENT OF REVENUE
s/W. Hartley Powell
W. Hartley Powell, Director
March 5
, 2018
Columbia, South Carolina
17
Get today's answer for your situation
You just read a 2018 ruling on this question. Ezel checks current South Carolina tax law and answers your specific situation, with citations.
Opens in Ezel Pro. Every answer cites the authority it relies on.