Relocating to South Carolina-Tax

[Montanan]

Originally Posted by flightlead404

Wait, this doesn't make sense

You're saying that as a non-SC resident with a USGC documented and GA registered $100k sailboat I should be paying SC ~$10k/year for the privilege of keeping my boat in a marina there for 6 months of the year?

That doesn't sound likely to me. If that were true and enforced it would decimate the marina industry.

The taxation on watercraft is like all property taxes, based on a proscribed percentage of assessed value and thence multiplied by the millage rate of the specific county jurisdiction. Each county is unique.

South Carolina utilizes several methods of locating boats that have not been included in a county's assessors database. Of course, they match the SCDNR registrations and titling records with the county and a boat can't be registered unless the property taxes are prepaid for the year; they also utilize the USCG documentation database; and they have county auditors walk the marinas. Very similar procedure as to say, California.

Although South Carolina is a bit of an oddity in that they do not require State registration by the SCDNR of vessels that are USCG documented [and of course they don't issue Titles to USCG documented vessels]. Whereas Georgia does require State registration of all vessels that use the waters of this state for a period in excess of 60 consecutive days, which is the custom for US States [albeit sometimes that period is 90 days].

Devil in the details which are deep in the seagrass.

[Montanan]

Originally Posted by slipaway

Wow... lots of tax info that is hard to sort through. One thing I have noticed reading posts like that is that many people confuse "excise tax", "sales tax", "use tax", "personal property tax". Further the issue of registration and titling are also thrown in. Each of these are different with different applicability to recreational vessels depending on the state. Some taxes such as excise, sales and use taxes are one-time assessments upon purchase or bringing a boat into the state permanently. Some states may exempt used boats from these, some don't but may give credit for sales taxes paid in another sytate. On the other hand, personal property taxes are annual and in states that have one, may be assessed at different rates depending upon location (such as in VA). Titling fees are usually one-time fees upon application while registration is usually annual. And to complicate things even more, different rules may apply to US documented vessels vs. state registered. And yes, a documented vessel may be required to be registered in the state if principal use, but cannot be titled in a state.

50 States, 50 sets of complexity.

One needs to know the many rules of the jurisdiction one enters, resides and departs as there are specific requirements for each.

[denverd0n]

Originally Posted by flightlead404

Wait, this doesn't make sense

You're saying that as a non-SC resident with a USGC documented and GA registered $100k sailboat I should be paying SC ~$10k/year for the privilege of keeping my boat in a marina there for 6 months of the year?

That doesn't sound likely to me. If that were true and enforced it would decimate the marina industry.

Makes perfect sense to me. I don't know of any state that will allow you to keep your boat there for six months without registering with the state, and requiring you to pay some sort of taxes or fees.

[Montanan]

Originally Posted by flightlead404

Wait, this doesn't make sense

You're saying that as a non-SC resident with a USGC documented and GA registered $100k sailboat I should be paying SC ~$10k/year for the privilege of keeping my boat in a marina there for 6 months of the year?

That doesn't sound likely to me. If that were true and enforced it would decimate the marina industry.

The residency of the owner[s] is typically not a factor when it comes to imposing all of the various forms of privilege taxations by State, County / Municipality.

Such taxations are based on the situs of where the privilege is occurring, e.g., a purchase, a use, a presence of a good or utilization / performance of a service within a jurisdictional territory. By way of example, in this instance the tangible personal property that is being assessed is a watercraft if it resides in a county of South Carolina and is not otherwise exempt. Mind you the vessel does not need to be within a marina, it could be stored on the hard, at anchor or moorage, or even transiting interstate / intrastate, so long as it meets the presence specifications.

As previously noted South Carolina is a bit odd in exempting USCG documented vessels from needing to be registered by the South Carolina Department of Natural Resources to be validly allowed to be used within the waters of the State. The South Carolina county tax auditors requested a change in the State law to aid in their collection of personal property taxation on water craft by requiring that the property tax must be paid in advance to the county before the SCDNR can title or register the watercraft and to require that registration expire annually instead of every three years. Yet the South Carolina laws were not changed to require annual registration of water craft that are documented by the USCG which would have further eased the counties in collection of the personal property taxations as a the documented vessels would have required annual State numbering [provided by a simple sticker] issued upon registration. Presently, South Carolina does not require State numbering / registration of USCG documented vessels. Go figure, The State has not yet eased the effort of collection of the ad valorem taxes on USCG documented vessels that utilize the waters of the State of South Carolina as their "principal place of use" [a legally defined term of both the US Federal Government and of each State]

And do realize that the property taxation [personal or real] are typically based on the following formula to determine the ad valorem tax:

(An Appraised Value) X (An Assessed Ratio of the Appraised Value [e.g., 10.5%]) X (A millage rate).

Don't forget to include the millage rate into determination of the assessed ad valorem tax amount.

But most importantly, go enjoy the privilege of owning and operating the water craft.

[scarlet]

Originally Posted by slipaway

Wow... lots of tax info that is hard to sort through. One thing I have noticed reading posts like that is that many people confuse "excise tax", "sales tax", "use tax", "personal property tax". Further the issue of registration and titling are also thrown in. Each of these are different with different applicability to recreational vessels depending on the state. Some taxes such as excise, sales and use taxes are one-time assessments upon purchase or bringing a boat into the state permanently. Some states may exempt used boats from these, some don't but may give credit for sales taxes paid in another sytate. On the other hand, personal property taxes are annual and in states that have one, may be assessed at different rates depending upon location (such as in VA). Titling fees are usually one-time fees upon application while registration is usually annual. And to complicate things even more, different rules may apply to US documented vessels vs. state registered. And yes, a documented vessel may be required to be registered in the state if principal use, but cannot be titled in a state.

I got the use and excise tax. My concern is sales tax. That's the one I need to know. The first length reply did reference a sales tax of 10% or 6%. But again, it doesn't make clear whether that is for recent purchases in state, ior delivered to the state... Or if that also applies to boats that have been owned for years.

Also, it doesn't state how long you can have the boat in water without having to pay the sales tax. (I will be a cruiser who would keep the boat in SC during hurricane season) I will not be a resident....

[Montanan]

Originally Posted by scarlet

I got the use and excise tax. My concern is sales tax. That's the one I need to know. The first length reply did reference a sales tax of 10% or 6%. But again, it doesn't make clear whether that is for recent purchases in state, ior delivered to the state... Or if that also applies to boats that have been owned for years.

Also, it doesn't state how long you can have the boat in water without having to pay the sales tax. (I will be a cruiser who would keep the boat in SC during hurricane season) I will not be a resident....

Residency of the owner is not a factor.

The casual excise tax [a special subset of the standard Use tax] is applied at 5% of purchase or fair market value and for boats is capped at a maximum of $500 with credit for sales / use taxation previously paid to another State [with exemptions as specified below]. But this Casual Excise [use tax] is only due and applicable to watercraft before they are to be titled, registered or licensed by the State. Yet, seemingly the standard Use Tax of 5% would be due for boats that are NOT subject to the special Casual Excise tax [e.g., watercraft that are documented by the USCG, in lieu of the Casual Excise [use tax] which are specifically excluded from registration or titling by the SCDNR], but such taxation is capped at a maximum of $500 and is credited for sales / use tax paid in another state.

As is typical for most goods or services, sales or use taxes are not limited by any time period of use within the state, rather become due when the privilege is initiated. Some states establish a tolling [or conditional waiver / exemption] of applying sales or use tax if a good is to be promptly removed from the State.
South Carolina has a provision for such occurrence:

Section 12-36-2520 - Tax liability when property delivered out of state; violations
If the seller delivers tangible personal property to the purchaser in a state other than South Carolina and receives from the purchaser a statement, given under oath, that the property was purchased for storage, use, or consumption outside of South Carolina and that the property will not be returned for storage, use, or consumption in South Carolina, the sales or use tax due on the transactions will be transferred to the purchaser if the statement contains a description of the property, the date of sale, the amount of the purchase price, and the city and state of delivery. The statement must be retained by the seller and, upon request forwarded to the department. The department may forward a copy of the statement to the taxing authority of the state of delivery. If the property is subsequently stored, used, or consumed in this State, the purchaser, in addition to the sales or use tax, shall pay a penalty in an amount equal to fifty percent of the tax.

S.C. Code § 12-36-2520

1990 Act No. 612, Part II, Section 74A.

As far as State Tax codes go, South Carolina's tax code is comparatively short and clear, albeit a bit novel.



Section 12-36-1310 - Imposition of tax; rate; applicability; credit for tax paid in another state
(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 that the sales or use tax was due and paid in the other 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 department.
S.C. Code § 12-36-1310

Section 12-36-1330 - Tax on storage, use, or consumption of tangible personal property
(A) Every person storing, using, or otherwise consuming in this State tangible personal property purchased at retail, is liable for the use tax, until the tax is paid to the State.

Section 12-36-1360 - Filing use tax return; payment of tax directly to State
Every person liable for the use tax under Section 12-36-1330(A) who has not paid the tax due to a seller required or authorized to collect the tax, must file a return and remit the tax to the State, in accordance with this chapter.
S.C. Code § 12-36-1360

1990 Act No. 612, Part II, Section 74A.

Article 17 - CASUAL EXCISE TAX
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Section 12-36-1710 - Excise tax on casual sales of motor vehicles, motorcycles, boats, motors, and airplanes; exclusions; payment of tax as prerequisite to titling, licensing, or registration
Section 12-36-1720 - Application of tax
Section 12-36-1730 - Wilful avoidance of tax; penalty
Section 12-36-1740 - Penalty for failure to pay casual excise tax


Current through 2022 Act No. 137.
Section 12-36-1710 - Excise tax on casual sales of motor vehicles, motorcycles, boats, motors, and airplanes; exclusions; payment of tax as prerequisite to titling, licensing, or registration
(A) 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 boat, motor, or airplane, required to be registered, titled, or licensed. The tax is five percent of the fair market value of the airplane, boat, and motor.
(B) Excluded from the tax are:
(1) 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 licensed motor vehicle or motorcycle dealer 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 boat, motor, or airplane, transferred to the seller or secured party in partial payment;
(3) gross proceeds of transfers of airplanes specifically exempted by Section 12-36-2120 from the sales or use tax;
(4) boats, motors, or airplanes, where a sales or use tax has been paid on the transaction necessitating the transfer.
(C) "Fair market value" means 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.
(D) "Total purchase price" means the price of a boat, motor, or airplane agreed upon by the buyer and seller with an allowance for a trade-in, if applicable.
(E) "Immediate family" means spouse, parents, children, sisters, brothers, grandparents, and grandchildren.
(F) The department shall require every applicant for a certificate of title to supply information it considers necessary as to the time of purchase, the purchase price, and other information relative to the determination of fair market value. If the excise tax is based upon total purchase price as defined in this section, the department shall require a submission of a bill of sale and the signature of the owner subject to the perjury statutes of this State.
(G) The Department of Motor Vehicles and the Division of Aeronautics of the Department of Commerce may not issue a license or transfer of title without first procuring from the Department of Revenue information showing that the excise tax has been collected. The Department of Natural Resources may not license any boat or register any motor without first procuring from the Department of Revenue information showing that the excise tax has been collected.
S.C. Code § 12-36-1710

Amended by 2017 S.C. Acts, Act No. 40 (HB 3516), s 7, eff. 7/1/2017.
1996 Act No. 459, Section 10; 1996 Act No. 431, Section 7; 1994 Act No. 497, Part II, Section 121C; 1993 Act No. 181, Section 197; 1990 Act No. 612, Part II, Section 74A.

Section 12-36-1720 - Application of tax
The excise tax applies only to the last sale before the application for title.

S.C. Code § 12-36-1720

1990 Act No. 612, Part II, Section 74A.

Section 12-36-2640 - Casual excise tax composed of two components
The tax imposed by Section 12-36-1710 is composed of two taxes as follows:

(1) a four percent tax which must be credited to the general fund of the State; and
(2) a one percent tax which must be credited as provided in Section 59-21-1010(B). The one percent tax specified in this item does not apply to the issuance of certificates of title or other proof of ownership to an individual eighty-five years of age or older titling or registering a motor vehicle, motorcycle, boat, motor, or airplane for his own personal use, if at the time of sale, the individual requests the one percent exclusion from tax and provides the retailer with proof of age.
S.C. Code § 12-36-2640

2001 Act No. 89, Section 50C, eff July 1, 2001; 1990 Act No. 612, Part II, Section 74A.




Section 12-36-1730 - Wilful avoidance of tax; penalty
A person who wilfully or knowingly makes a false statement for the purpose of avoiding all or a part of the casual excise tax imposed by this article or who assists another person to avoid all or a part of the casual excise tax levied by this article is guilty of a misdemeanor and, upon conviction, must be punished by a fine of not more than two hundred dollars or imprisoned not more than thirty days, or both. Offenses under this section are triable in magistrate's court.

S.C. Code § 12-36-1730

1992 Act No. 361, Section 16(K).


Section 12-36-1740 - Penalty for failure to pay casual excise tax
A person liable for the casual excise tax provided by this article who fails to pay the tax or comply with a lawful regulation of the department is liable for a penalty not to exceed five hundred dollars.

S.C. Code § 12-36-1740


Article 21 - MAXIMUM TAX AND EXEMPTIONS

Section 12-36-2110 - Maximum tax on sale or lease of certain items; calculation of tax on manufactured homes; maximum tax on purchase of certain property by religious organizations; maximum tax on sale or use of machinery for research and development
Section 12-36-2120 - Exemptions from sales tax
Section 12-36-2130 - Exemptions from use tax
Section 12-36-2140 - Port facility

1992 Act No. 361, Section 16(K).


Section 12-36-2110 - Maximum tax on sale or lease of certain items; calculation of tax on manufactured homes; maximum tax on purchase of certain property by religious organizations; maximum tax on sale or use of machinery for research and development
(A)
(1) The maximum tax imposed by this chapter is three hundred dollars for each sale made after June 30, 1984, or lease executed, after August 31, 1985, of each:
(a) aircraft, including unassembled aircraft which is to be assembled by the purchaser, but not items to be added to the unassembled aircraft;
(b) motor vehicle;
(c) motorcycle;
(d) boat;

. . .

(4) Notwithstanding any other provision of this subsection, after June 30, 2017, the maximum tax imposed pursuant to this chapter on the sale, lease, or registration of an item enumerated in item (1) is increased from three hundred dollars to five hundred dollars, mutatis mutandis. Notwithstanding Section 59-21-1010, or any other provision of law, any revenue resulting from the increase contained in this item must be credited to the Infrastructure Maintenance Trust Fund.




Maximum Tax:
The sales, use and casual excise taxes are imposed at the rate of 5%1 for the sale or lease of tangible personal property subject to a maximum tax. Local taxes administered and collected by the Department of Revenue on behalf of local jurisdictions do not apply to the sale or lease of tangible personal property subject to a maximum tax.

Maximum Tax Applies to:
(A) A maximum tax of $500 is established for each sale2 or lease3 of each:4
1 The provisions of South Carolina Code §12-36-1110 which increased the sales and use tax rate and the casual excise 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 maximum tax only applies for each sale made after June 30, 1984.
3 The maximum tax only applies for each lease executed after August 31, 1985.
4 South Carolina Code §12-36-2110(A), as amended by Act No. 40 of 2017. Effective July 1, 2017, Act No. 40 increased the maximum tax from $300 to $500 for certain enumerated items.

Personal property taxation

Then there is the county assessed personal property taxation that is due annually and must be paid before a vessel can be registered or titled with the SCDNR. The USCG documented vessels are presently exempt from registration / numbering by the State of South Carolina, but the personal property tax is required.

Boats in South Carolina, therefore, are most at risk for the imposition of personal property tax. Liability for South Carolina’s personal property tax arises when a boat is in the state for 60 consecutive days or 90 total days in a calendar year. A local jurisdiction, however, has the discretion to increase the number of days a boat can stay without being subject to taxation to 180 days. Check with the County Auditor / Assessor's office of the county the boat will reside in to determine the rules for that county.
They can tell you the appraised value, the assessment ratio and the millage rate and for how long the boat must reside within the County before the personal property tax becomes assessed.

SC Code Ann. § 12-37-714 provides:

(2) A boat, including its motor if the motor is separately taxed, which is not currently taxed in this State and is not used exclusively in interstate commerce, is subject to property tax in this State if it is present within this State for sixty consecutive days or for ninety days in the aggregate in a property tax year….

Also, upon an ordinance passed by the local governing body, a county may increase the number of days in the aggregate a boat….must be in this State to be subject to property tax to one hundred eighty days in a property tax year, regardless of the number of consecutive days.

S.C. Code Ann. § 12-37-714

[scarlet]

So, this from the SCDNR seems to cover me, so no tax or titling..

"Boating - Title and Register a Watercraft or Outboard Motor in SC
Boating - Documented Vessels
If you choose to document your vessel (instead of titling and registering it in SC), please contact the US Coast Guard: United States Coast Guard National Vessel Documentation Center

If a vessel is documented with the US Coast Guard it does not have to be titled or registered in SC."