When did South Carolina Revenue Ruling 92-10 apply casual excise tax, use tax, or no tax to transfers of vehicles, motorcycles, boats, motors, and airplanes?

Plain-English summary

South Carolina Revenue Ruling 92-10 explained whether a title or ownership transfer for a motor vehicle, motorcycle, boat, motor, or airplane produced casual excise tax, use tax, or no tax under the law then in effect.

The casual excise tax was 5% of fair market value and applied when the state issued a certificate of title or other proof of ownership after a taxable sale, unless a statutory exclusion applied. Section 12-36-1720 limited the tax to the last sale before the title application.

The ruling's key distinction was where the purchase occurred and whether the seller was a retailer.

The ruling's transaction matrix

Purchases within South Carolina

Casual excise tax applied at titling when the property was purchased in South Carolina and sales tax had not been paid on the transaction requiring the title transfer.

The statutory exclusions in Section 12-36-1710(B) still controlled. The ruling quoted exclusions for transfers to immediate family, heirs or distributees, newly formed partnerships or corporations, licensed dealers for resale, financial institutions for resale, and secured parties after repossession for resale. It also referenced trade-in value, specified sales-and-use-tax exemptions, and transactions on which sales or use tax had already been paid.

Purchases outside South Carolina from retailers

Use tax applied when property was bought from an out-of-state retailer for storage, use, or consumption in South Carolina.

If sales or use tax was due and paid to another state, South Carolina allowed a credit when that state provided a substantially similar reciprocal credit. If the other state's tax was lower, the purchaser paid the difference.

The ruling said use tax did not apply when the purchaser had substantially used the property outside South Carolina before bringing it into the state for storage, use, or consumption.

Purchases outside South Carolina from nonretailers

Casual excise tax applied at titling when the property was bought from an out-of-state nonretailer and no sales or use tax had been paid on the transaction.

The ruling also said casual excise tax did not apply if the purchaser had substantially used the property outside South Carolina before titling, registering, or licensing it in the state.

Gifts and prizes

Casual excise tax did not apply to a gift or prize because the recipient had not acquired the property through a sale for consideration. Other statutory exclusions also remained relevant.

What this means for you

Buyers titling property in South Carolina

The title event alone was not the entire analysis. The ruling examined the transaction that required the title, whether tax had already been paid, seller status, prior out-of-state use, and statutory exclusions.

Out-of-state retail purchases

Retail purchases were analyzed under use tax rather than casual excise tax. Documentation of other-state tax payments and reciprocal-credit eligibility mattered.

Private-party purchases

An out-of-state nonretailer purchase could trigger casual excise tax at South Carolina titling when no sales or use tax had been paid.

Recipients of gifts or prizes

The ruling treated those transfers as outside the casual excise tax because there was no sale to the recipient.

Common questions

Q: What property did the ruling cover?
A: Motor vehicles, motorcycles, boats, motors, and airplanes requiring title, registration, or licensing.

Q: What was the historical casual excise tax rate?
A: Five percent of fair market value under the statute quoted in the ruling.

Q: Could tax paid to another state be credited?
A: Yes for the use tax when the other state allowed a substantially similar credit and the taxpayer proved payment.

Q: Did substantial use outside South Carolina matter?
A: Yes. The ruling described substantial prior out-of-state use as removing use tax for retailer purchases and casual excise tax for nonretailer purchases.

Q: Were gifts and prizes taxable?
A: Not under the casual excise tax in this ruling, because the recipient made no purchase for consideration.

Citations and references

• S.C. Code Ann. § 12-36-100 — sale and purchase defined as transfers for consideration
• S.C. Code Ann. § 12-36-1310 — use tax, other-state credit, and reciprocal-credit condition
• S.C. Code Ann. § 12-36-1710(A)-(B) — casual excise tax and statutory exclusions
• S.C. Code Ann. § 12-36-1720 — tax applies only to the last sale before title application
• S.C. Code Ann. § 12-36-2120 — sales-and-use-tax exemptions referenced by the ruling

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR92-10.pdf

Original ruling text

SC REVENUE RULING #92-10

SUBJECT:

Transfers Subject To the Casual Excise Tax
(Casual Excise Tax)

TAX ANALYST:

Steve Hallman

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous documents and any oral directives in conflict herewith.

REFERENCE:

S.C. Code Ann. Section 12-36-100 (Supp. 1991)
S.C. Code Ann. Section 12-36-1310 (Supp. 1991)
S.C. Code Ann. Section 12-36-1710 (Supp. 1991)
S.C. Code Ann. Section 12-36-1720 (Supp. 1991)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (Supp. 1991)
SC Revenue Procedure #87-3

SCOPE:

A Revenue Ruling is the Commission's official interpretation of how
tax law is to be applied to a specific set of facts. A Revenue Ruling is
public information and remains a permanent document until
superseded by a Regulation or is rescinded by a subsequent Revenue
Ruling.

Question:
What transfers are subject to the casual excise tax imposed by Code Section 12-36-1710?
Facts:
Many motor vehicles, motorcycles, boats, motors, and airplanes are titled or registered in South
Carolina where a sales or use tax has been paid on the transaction necessitating the transfer.
Frequently, however, motor vehicles, motorcycles, boats, motors, or airplanes are titled or
registered in this State and a sales or use tax has not been paid on the transaction necessitating
the transfer. In the latter case, there has been some confusion as to whether to impose the casual
excise tax under certain conditions (e.g. property which has been used substantially in another
state by the owner thereof, or transferred as a gift or prize).

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Discussion:
Code Section 12-36-1710(A) imposes the casual excise tax and reads:
In addition to all other fees prescribed by law there is imposed an excise tax for the
issuance of every certificate of title, or other proof of ownership, for every motor vehicle,
motorcycle, boat, motor, or airplane, required to be registered, titled, or licensed. The tax
is five percent of the fair market value of the motor vehicle, motorcycle, airplane, boat,
and motor.
Code Section 12-36-1710(B) states, in part:
Excluded from the tax are:
(1)

motor vehicles, motorcycles, boats, motors, or airplanes:
(a)

transferred to members of the immediate family;

(b)

transferred to a legal heir, legatee, or distributee;

(c)

transferred from an individual to a partnership upon formation of a
partnership, or from a stockholder to a corporation upon formation of a
corporation;

(d)

transferred to a motor vehicle or motorcycle dealer licensed under Section 563-2310 for the purpose of resale;

(e)

transferred to a financial institution for the purpose of resale;

(f)

transferred as a result of repossession to any other secured party, for the
purpose of resale;

(2)

the fair market value of a motor vehicle, motorcycle, boat, motor, or airplane,
transferred to the seller or secured party in partial payment;

(3)

gross proceeds of transfers of motor vehicles, motorcycles, or airplanes specifically
exempted by Section 12-36-2120 from the sales or use tax;

(4)

motor vehicles, motorcycles, boats, motors, or airplanes, where a sales or use tax has
been paid on the transaction necessitating the transfer....

Code Section 12-36-1720 reads "[t]he excise tax applies only to the last sale before the
application for title."

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In summary, the casual excise tax is imposed upon the issuance of a certificate of title or other
proof of ownership for motor vehicles, motorcycles, boats, motors, or airplanes, unless
specifically excluded from the tax (e.g. when a sales or use tax has been paid on the sale
necessitating the transfer of title). Also, there must have been a sale which necessitated the
transfer of title of such property in order to impose the tax.
Code Section 12-36-100 defines the terms "sale" and "purchase" to mean "any transfer,
exchange, or barter, conditional or otherwise, of tangible personal property for a consideration."
Finally, with respect to purchases made outside South Carolina, we must consider the State use
tax. Code Section 12-36-1310 states, in part:
(A)

A use tax is imposed on the storage, use, or other consumption in this State of
tangible personal property purchased at retail for storage, use, or other consumption
in this State, at the rate of five percent of the sales price of the property, regardless
of whether the retailer is or is not engaged in business in this State.

(C)

When a taxpayer is liable for the use tax imposed by this section on tangible
personal property purchased in another state, upon which a sales or use tax was due
and paid in the other state, the amount of the sales or use tax due and paid in the
other state is allowed as a credit against the use tax due this State, upon proof of
payment of the sales or use tax. The provisions of this section do not apply if the
state in which the property was purchased does not allow substantially similar tax
credits for tangible personal property purchased in this State. If the amount of the
sales or use tax paid in the other state is less than the amount of use tax imposed by
this article, the user shall pay the difference to the commission.

Conclusion:
I.

PURCHASES MADE WITHIN SOUTH CAROLINA
The casual excise tax applies to the issuance of every certificate of title, or other proof of
ownership, for motor vehicles, motorcycles, boats, motors, and airplanes purchased in
South Carolina if a sales tax has not been paid on the transaction necessitating the transfer
of title. (See Item III below, and §12-36-1710(B) for exclusions.)

II.

PURCHASES MADE OUTSIDE SOUTH CAROLINA
Purchases From Retailers:
The use tax applies to the storage, use, or other consumption in this State of motor
vehicles, motorcycles, boats, motors, or airplanes purchased from retailers located outside
South Carolina for storage, use, or other consumption in this State.

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If a sales or use tax was due and paid in another state on such purchases, a credit against
the South Carolina use tax is allowed if the other state allows similar credit for property
purchased in this State.
Note: The use tax does not apply to property purchased from retailers located outside
South Carolina if the property is used substantially outside this State by the purchaser
before being stored, used, or consumed in this State.
Purchases From Non-Retailers:
The casual excise tax applies to the issuance of every certificate of title, or other proof of
ownership, for motor vehicles, motorcycles, boats, motors, and airplanes purchased
outside South Carolina from non-retailers if a sales or use tax has not been paid on the
transaction necessitating the transfer of title.
Note: The casual excise tax does not apply to property purchased outside South Carolina if
the property has been substantially used outside this State by the purchaser before being
titled, registered, or licensed in South Carolina. (See Item III below, and §12-36-1710(B)
for exclusions.)
III.

GIFTS AND PRIZES
The casual excise tax does not apply to property transferred as a gift or prize in that there
has not been a sale to the person receiving the property. (See §12-36-1710(B) for
exclusions.)
SOUTH CAROLINA TAX COMMISSION

s/A. Crawford Clarkson Jr.
A. Crawford Clarkson, Jr., Chairman

s/T. R. McConnell
T. R. McConnell, Commissioner

s/James M. Waddell Jr.
James M. Waddell, Jr., Commissioner
Columbia, South Carolina
August 4
, 1992

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