South Carolina Sales Tax on Car Purchases
South Carolina sales tax on cars is an essential part of purchasing a vehicle if you reside in this state. On top of the cost of a vehicle, vehicle tax rates are calculated depending on many factors, including the state you live in.
Purchases of vehicles are among the biggest sales made in South Carolina, which means that they can often lead to a pricey sales tax bill. The state collects a 6 percent sales tax on all vehicle purchases. However, according to Sales Tax Rates, cities and/or municipalities in South Carolina can also collect their own rate on top of the state sales tax rate.
In South Carolina, vehicle purchases can also be subject to other fees like plate, registration, and title fees, according to Sales Tax Handbook. The additional fees are usually as follows:
- Plate Transfer Fee: $10
- Registration Fee: $24
- Title Fee: $15
Any additional taxes and fees for South Carolina vehicle buyers are separate from sales tax and are collected by the South Carolina Department of Motor Vehicles.
Many dealerships also charge a documentation fee, also known as a "doc fee." This covers the costs of the dealership preparing the documents associated with the vehicle purchase. These are separate from the DMV and tax fees.
In South Carolina, the average documentation fee is $2201, and the amount a dealership can charge for doc fees is not limited by state law. Therefore, they can vary from dealership to dealership.
The state's tax rate can vary depending on the purchase type. Some of South Carolina's tax types are as follows:
- Rental tax
- Sales tax
- Lodgings tax
- Sellers use tax
- Consumer use tax
Often, dealerships allow the trade-in of an old vehicle and apply a credit to the cost of the new vehicle. For example, if you trade in your old vehicle, you could receive a $5000 credit. If your new vehicle costs $10,000, you will then only pay $5000.
Your trade-in's value is not subject to sales tax, so the taxable price of your new vehicle is usually considered as $5000. Therefore, you will save the sales taxes you'd otherwise have paid on your trade-in's $5000 value.
On top of this, many dealers also offer manufacturer rebates or cash incentives on a vehicle's price as a way to boost and encourage sales. If a $1000 cash rebate is offered on a $10,000 car, the buyer will then only need to pay $9000.
The state always taxes purchases of vehicles before applying incentives or rebates to the price. The buyer will pay taxes on the new vehicle based on its full price.
Road Repair Bill
The Roads Bill was implemented on July 1, 2017, and specifies that all purchased or leased vehicles that will be registered and/or titled in South Carolina will owe an Infrastructure Maintenance Fee (IMF), as stated by SCDMV Online.
According to The State, changes in legislation have resulted in a $200 increase in sales tax. Previously, the maximum was $300, but now the maximum a vehicle buyer can be charged is $500.
Additionally, those who move to South Carolina with a vehicle that needs to be registered in the state will automatically owe a $250 Infrastructure Maintenance Fee (IMF) per vehicle. This is in addition to other fees, and you won't be able to register or title the vehicle until the IMF is paid. For example, if you move from California to South Carolina with a vehicle that has been registered there, you'll owe the IMF upon registration.
However, those who purchase a vehicle or other item in the state, that will be registered in a different state, will not need to pay an Infrastructure Maintenance Fee, but a sales tax instead, as explained by this article from ABC news.
All property taxes are paid to the county treasurer. When you visit the SCDMV, you must bring your paid property tax receipt with you.
The amount you owe is based on the item's sales price. If the item costs $9999 or less, your IMF will be 5 percent of the sales price. If it's over $10,000, you'll owe $500.
South Carolina State Rate(s) for 2019
In South Carolina, Borden has the lowest tax rate, at 6 percent, whereas Charleston has the highest, at 9 percent. On average, the state's combined rate is 7.477 percent. In 2019, there were 42 out of 386 South Carolina cities that charge city sales tax at 10.881 percent, and 98 out of 553 South Carolina zip codes charge sales tax at 17.722 percent.
South Carolina Has Lower Real Estate Tax, Higher Vehicle Tax
According to Greenville News, residents of South Carolina are facing a trade-off when it comes to taxes. A study published by WalletHub ranked the state as the sixth most reasonable for property taxes, but 48th for vehicle taxes. It also found that while the average American household pays $2197 in real estate taxes, South Carolina residents pay only $821.
The state's low real estate taxes have boosted its reputation as a great place to retire or relocate, according to Robby Brady of Allen Tate Realtors. Despite this, South Carolina is one of 27 states that collect taxes on vehicles, and they're among the highest in the country.
With all things considered, it's fair to say that although South Carolina sales tax on cars is generally high, the low property taxes balance out the situation. Sales tax on cars can often be a difficult thing to understand, but with a spot of time, patience, and resources like this one, it will all make a bit more sense.
Sources:
https://www.salestaxhandbook.com/south-carolina/sales-tax-vehicles
http://www.salestaxstates.com/sales-tax-calculator-south_carolina
https://www.thestate.com/news/politics-government/article158477029.html
http://www.scdmvonline.com/News/New-Fee-Beginning-July-1-2017
