When did South Carolina collect casual excise tax or use tax on historical vehicle, boat, motor, airplane, and trailer transfers?

Plain-English summary

South Carolina Revenue Ruling #04-13 was a historical guide to two taxes collected when ordinary sales tax had not already been paid on vehicles and similar property.

The casual excise tax generally applied when South Carolina issued title or other ownership proof after the last non-retailer sale of a motor vehicle, motorcycle, boat, motor, or airplane. It did not apply to trailers, semitrailers, or pole trailers.

The use tax generally applied to a motor vehicle, motorcycle, boat, motor, airplane, or trailer bought from an out-of-state retailer for storage, use, or consumption in South Carolina. The ruling allowed credit for qualifying state and local sales or use tax due and paid to another state.

The ruling described a historical 5% tax with a $300 cap for specified property, along with excluded or exempt family, inheritance, resale, government, insurance, gift, farm-aircraft, and entire-business transfers. RR 08-8 expressly superseded this ruling, and RR 20-1 later superseded RR 08-8.

What this means for you

Private-party buyers

Under this historical framework, the tax could be collected through the title process even when the seller was not a retailer. It applied only to the last sale before the title application.

Out-of-state purchasers

Use tax depended on buying from an out-of-state retailer for South Carolina use. Proof of tax paid elsewhere and prior substantial use outside the state mattered under the described rules.

Boat and trailer buyers

The ruling treated boats, permanently attached motors, separately sold motors, and ordinary boat trailers differently. Package allocations had to be reasonable and supported by records.

Common questions

Q: Did casual excise tax apply to ordinary trailers?
A: No. The ruling limited casual excise tax to listed titled property and excluded trailers, semitrailers, and pole trailers.

Q: Did use tax apply to trailers purchased from out-of-state retailers?
A: Yes, unless an exclusion, exemption, or credit applied.

Q: What maximum tax did the ruling use?
A: $300 for specified property under the 2004 law.

Q: Is RR 04-13 current?
A: No. RR 08-8 expressly superseded it, and RR 20-1 later superseded RR 08-8.

Citations and references

• S.C. Code Ann. §§ 12-36-1710 and 12-36-1720 — casual excise tax
• S.C. Code Ann. § 12-36-1310 — use tax and other-state credit
• S.C. Code Ann. § 12-36-2110 — historical maximum tax
• S.C. Code Ann. § 12-36-2120 — exemptions discussed
• S.C. Code Ann. § 12-36-2640 — historical age-85 rate provision
• SC Revenue Ruling 08-8 — expressly superseded RR 04-13
• SC Revenue Ruling 20-1 — later expressly superseded RR 08-8

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: RR04-13.pdf
• Official superseding RR 08-8 PDF: RR08-8.pdf
• Official later RR 20-1 PDF: RR20-1.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214
Website Address: http://www.sctax.org

SC REVENUE RULING 04-13

SUBJECT:

Collection of Casual Excise Tax and Use Tax on Sale of a Motor Vehicle,
Motorcycle, Boat, Motor, Airplane, Trailer, etc.

EFFECTIVE DATE: Applies to all periods open under the statute.
SUPERSEDES:

SC Revenue Ruling #95-12 and all previous advisory opinions and any oral
directive in conflict herewith.

REFERENCES:

S. C. Code Ann. Section 12-36-1710 (2000)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2000)
S. C. Code Ann. Section 1-23-10(4) (Supp. 2003)
SC Revenue Procedure #03-1

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public and to
Department personnel. It is a written statement issued to apply principles of
tax law to a specific set of facts or a general category of taxpayers. A
Revenue Ruling is an advisory opinion; it does not have the force or
effect of law and is not binding on the public. It is, however, the
Department’s position and is binding on agency personnel until superseded
or modified by a change in statute, regulation, court decision, or advisory
opinion.

INTRODUCTION
In general, a South Carolina retailer collects and remits sales tax to the Department upon the sale of
a motor vehicle, motorcycle, boat, motor, airplane, trailer, semitrailer, or pole trailers. At times,
however, the property is purchased from an individual, non-retailer, or a retailer located outside of
South Carolina who is not responsible for collecting sales or use tax.
The purpose of this document is to provide detailed information concerning the application of the
casual excise tax or use tax, if any, on motor vehicles, motorcycles, boats, motors, airplanes, trailers,
etc. where sales tax has not previously been paid.
For easy reference, this advisory opinion is arranged by major categories to assist in explaining the
general tax provisions and the types of transfers that are not subject to casual excise tax, use tax,
maximum tax, and/or sales tax. These categories are:

1. Casual Excise Tax

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2.
3.
4.
5.
6.
7.

Use Tax
Maximum Tax
Transfers of Boats, Motors, and Boat Trailers
Special Provision for Persons 85 and Older
Local Sales and Use Taxes
Definitions

CASUAL EXCISE TAX - GENERAL PROVISIONS
1.

What is the casual excise tax and when is it imposed on sales of motor vehicles,
motorcycles, boats, motors, or airplanes?

The casual excise tax is imposed upon the issuance of a certificate of title or other proof of
ownership for every (1) motor vehicle, (2) motorcycle, (3) boat, (4) motor, or (5) airplane
required to be registered, titled, or licensed. It applies only to the last sale before the application
for title. (See Code Sections 12-36-1710(A) and 12-36-1720.) The casual excise tax does not
apply to trailers (including boat trailers), semitrailers, or pole trailers.
2.

What is the casual excise tax rate?

The tax is 5% of the “fair market value” of the motor vehicle, motorcycle, airplane, boat, and
motor. (See Question 3 for the definition of “fair market value.”) However, Code Section 12-362110 provides that the casual excise tax on sales of motor vehicles, motorcycles, boats, motors,
or airplanes may not exceed the $300 maximum tax on certain transactions. (See Questions 11
and 12 concerning the maximum tax.)
3.

On what amount is the casual excise tax computed?

The casual excise tax is computed on the “fair market value” which is defined as (1) the total
purchase price (i.e., price agreed upon by the buyer and seller) less any trade-in allowance of the
motor vehicle, motorcycle, boat, motor, or airplane, or (2) the valuation shown in a national
publication adopted by the Department. The valuation shown in a national publication of used
values, however, is used only in cases of necessity, for example, when closely held stock is
exchanged for a motor vehicle.
The price agreed upon by the buyer and seller, less any trade in, includes: (1) the amount of cash
paid, (2) the amount of any loan assumed, (3) the value of any property exchanges, or (4) the
amount paid at delinquent property tax sales.
NOTE: This conclusion is based upon the following legal analysis:
Code Section 12-36-1710(A) imposes the casual excise tax on the fair market value of the motor
vehicle, motorcycle, boat, motor, or airplane. The term “fair market value” is defined in Code
Section 12-36-1710(C) as “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.” The term “total
purchase price” is defined in Code Section 12-36-1710(D) as “the price of a motor vehicle,
motorcycle, boat, motor, or airplane agreed upon by the buyer and seller with an allowance for a
trade-in, if applicable.”
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In looking at the definition of fair market value above, the determination must be made as to when
the casual excise tax is imposed on the total purchase price and when it is imposed on the valuation
shown in a national publication. The court, in Investors Premium Corp. v. South Carolina Tax
Commission, 193 S.E. 2d 642 (1973), addressed a similar issue. The court stated that “the word ‘or’
used in a statute marks an alternative, and ordinarily means one or the other of two, but not both.
We are of the opinion that... ‘or’, while marking an alternative, must also be construed as
introducing a substitute. That is, it does not set up an alternative of choice available to the Tax
Commission but allows an alternative of necessity. We can find no logic in a purely equal
alternative, and yet we must give some significance to the ‘or’ and the alternative it provides.”
4.

How is the casual excise tax remitted?

Department of Revenue Form ST-236, “Casual or Use Excise Tax Return,” is used to compute the
casual excise tax or use tax due on the transfer of a motor vehicle, motorcycle, boat, motor, or
airplane. The tax may be paid at the Department, or at a Department of Motor Vehicles office when
registering a motor vehicle or motorcycle, or at the Department of Natural Resources when
registering a boat or motor. Form ST-236 can be obtained from the Department’s website at
www.sctax.org. Information on the Department of Motor Vehicles or the Department of Natural
Resources can be found at www.myscgov.com.
SPECIFIC TRANSFERS NOT SUBJECT TO THE CASUAL EXCISE TAX
5.

What types of transfers are not subject to the casual excise tax?

The following transfers of motor vehicles, motorcycles, boats, motors, or airplanes are excluded
from the casual excise tax pursuant to Code Section 12-36-1710 and 12-36-1720:
a.

transfers to members of the immediate family (i.e., spouse, parent, child, sister, brother,
grandparent, and grandchild);

b.

transfers to a legal heir, legatee, or distributee;

c.

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

d.

transfers to a licensed motor vehicle dealer or licensed motorcycle dealer for the purpose
of resale;

e.

transfers to a financial institution for the purpose of resale;

f.

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

g.

transfers to the seller or secured party in partial payment (e.g., trade-ins);

h.

transfers where a sales or use tax has been paid on the transaction necessitating the
transfer (this includes sales tax paid to an auctioneer licensed as a retailer);

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6.

i.

transfers of motor vehicles, motorcycles, or airplanes specifically exempted by Section
12-36-2120 from the sales or use tax (see Question 6 below);

j.

transfers that are a gift or prize (see Question 6 below); and,

k.

vessels registered and documented by the United States Commissioner of Customs.

What transfers are exempt from the casual excise tax because they are exempt from
sales or use tax under Code Section 12-36-2120?
Below are examples of transfers that are exempt from sales and use tax under Code Section
12-36-2120 and, therefore, exempt from the casual excise tax. These examples illustrate the
more frequent methods of transferring a motor vehicle, motorcycle, boat, motor, airplane, or
trailer; see Code Section 12-36-2120 for a complete list of exemptions.
Sales to Nonresident Military Personnel Motor vehicles, as described below, or motorcycles sold to military personnel stationed in
South Carolina by reason of orders of the U.S. Armed Forces who are not residents of South
Carolina are exempt from South Carolina sales and use tax, and casual excise tax, provided (1)
a copy of Form ST-178, “Nonresident Military Tax Exemption Certificate” is furnished to the
seller or (2) a leave and earnings statement from the appropriate department of the armed
services is provided that designates the state of residence of the buyer. This information must
be furnished within ten days of the sale.
This exemption applies only to the sale of motor vehicles that are primarily designed to carry
passengers, such as cars, passenger vans, and sports utility vehicles (e.g., Broncos, Explorers,
Troopers). Sales and use tax or the casual excise tax (whichever is applicable) is due on sales
of motor vehicles designed primarily to carry cargo, such as trucks or cargo vans.
Sales to the Federal Government Sales of a motor vehicle, motorcycle, boat, motor, or airplane to the federal government are
exempt from sales or use taxes under Code Section 12-36-2120(2) and also exempt from the
casual excise tax. When agents of the federal government purchase one of these items on
behalf of the federal government, the purchase is not subject to sales and use taxes providing
the credit of the agent is not advanced or risked, the purchase order discloses the purchase is
made on behalf of the federal government, title to the property vests in the federal
government, and the vendor is paid directly from the federal government.
Sales by the Federal Government Sales of a motor vehicle, motorcycle, boat, motor, or airplane by the federal government are
exempt from sales and use taxes under Code Section 12-36-2120(1) and exempt from the
casual excise tax.

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Sales by, or Sales to, Federal Credit Unions –
Sales of a motor vehicle, motorcycle, boat, motor, or airplane by, or sales of such property to,
a federal credit union are exempt from sales and use taxes and the casual excise tax. See South
Carolina Attorney General Opinion #S-OAG-59 wherein it was concluded that federally
chartered credit unions are instrumentalities of the federal government.
Transfers to an Insurance Company Vehicles that have been declared a total loss and are transferred to an insurance company in
settlement of a claim are exempt from casual excise tax and sales and use taxes under Code
Section 56-19-480. (See SC Revenue Ruling #93-13.)
Sales of Farm Machinery Airplanes used in planting, cultivating or harvesting farm crops (e.g., crop dusting) are exempt
from South Carolina sales and use tax and casual excise tax pursuant to Code Section 12-362120(16). The tax, however, applies to automobiles or trucks used in farming.
Gifts and Prizes The sales and use tax and casual excise tax do not apply to property transferred as a gift or
prize since there has not been a “sale” to the recipient. A gift includes a motor vehicle,
motorcycle, boat, motor, or airplane transferred by “love and affection”. (See Code Section
12-36-1720 and SC Revenue Ruling #92-10.)
Sale of Entire Business –
The casual excise tax and sales and use tax do not apply to depreciable assets, used in the
operation of a business when the entire business is sold by the owner, pursuant to a written
contract, and the purchaser continues operation of the business. For example, if ABC
Company, a retail florist business, sells it’s entire business (e.g., the building, inventory,
delivery trucks, goodwill, etc.) to XYZ Company, a retail gift store business who will operate
the floral business it purchased, then there is no sales and use tax due on the sale of the
delivery trucks. If however, ABC Company sold only a portion of its assets (e.g., all of it’s
delivery trucks), then ABC Company is liable for the sales tax due on the sale of it’s delivery
trucks. See Code Sections 12-36-1710(B)(3), 12-36-2120(42), and SC Revenue Advisory
Bulletin #01-1.
USE TAX - GENERAL PROVISIONS
7.

What is the use tax and when is it imposed on sales of motor vehicles, motorcycles, boats,
motors, airplanes, trailers, semitrailers, or pole trailers?

The use tax is imposed on the storage, use, or consumption in South Carolina of motor vehicles,
motorcycles, boats, motors, airplanes, trailers, semitrailers, or pole trailers purchased from retailers
who are not engaged in business in South Carolina. (See Code Section 12-36-1310.)

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8.

What is the use tax rate?

The use tax is 5% of the sales price of the motor vehicle, motorcycle, boat, motor, airplane, or trailer,
semitrailer, or pole trailer purchased. However, Code Section 12-36-2110 provides that the use tax
may not exceed $300 on certain transactions. (See Questions 11 and 12 concerning the maximum
tax.)
9.

Is a credit allowed for state and local sales or use tax paid in other states?

Yes, South Carolina allows a credit against the use tax due in South Carolina for the state and local
sales or use tax due and paid in another state provided the purchaser has proof that the sales or use
tax was due and paid. See Code Section 12-36-1310(C).

SPECIFIC TRANSFERS NOT SUBJECT TO THE USE TAX
10.

What sales or purchases of motor vehicles, motorcycles, boats, motors, airplanes,
trailers, semitrailers, or pole trailers are not subject to the use tax?

The following transfers of motor vehicles, motorcycles, boats, motors, airplanes, trailers,
semitrailers, or pole trailers are not subject to the use tax:
a.

Purchases from another state that have been substantially used outside South Carolina by
the purchaser before being titled, registered or licensed in South Carolina. The purchaser
must show proof that the property was titled, registered or licensed in another state. (See
Code Section 12-36-1310 and Regulation 117-320.1.)

b.

Purchases in which the purchaser has a receipt from an out of state seller or retailer
authorized to collect South Carolina’s use tax that shows the seller has collected the tax
from the purchaser. (See Code Section 12-36-1330.)

c.

Sales to dealers for resale. The liability for tax will shift from the seller to the purchaser if
the seller receives a properly completed Form ST-8A, “Resale Certificate”, from the
purchaser. (See Code Sections 12-36-120, 12-36-1370, and SC Revenue Procedure #982.)

d.

Sales to nonresident military personnel, sales to, and sales by, the federal government or
federal credit union, transfers to an insurance company of vehicles declared a total loss,
sales of airplanes used in farming as provided in Question 6, sales of an entire business as
provided in Code Section 12-36-2120(42), and any sale otherwise exempt under Code
Section 12-36-2120.

THE MAXIMUM TAX - GENERAL PROVISIONS
11.

What transfers are subject to a maximum tax?

Code Section 12-36-2110 provides that the maximum tax imposed by Chapter 36 (Sales and Use
Tax Act) is $300 for sales or leases of each:
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a.

aircraft;

b.

motor vehicle; (SC Revenue Advisory Bulletin #00-3 concluded that all terrain vehicles
and legend race cars are not motor vehicles subject to the $300 maximum tax; transfers of
such property are subject to the State 5% sales tax and any applicable local taxes.)

c.

motorcycle (on-road or off-road);

d.

boat (See Question 13 for a complete explanation.) Note: SC Revenue Ruling #04-10
concluded that the sale of personal watercraft, such as a jet ski, is the transfer of a “boat”
subject to the $300 maximum tax;

e.

trailer or semitrailer capable of being pulled only by a truck tractor;

f.

recreational vehicle, including tent campers, travel trailers, park trailers, motor homes and
fifth wheels;

g.

self-propelled light construction equipment with compatible attachments limited to a
maximum of 160 net engine horsepower; and,

h.

horse trailers.

Code Section 12-36-2110 provides that the maximum tax imposed is $300 for each sale. In order
for a lease to qualify for the $300 maximum tax, a lease must specifically state the term of, and
remain in force for, a period in excess of 90 continuous days.
NOTE: The local sales and use taxes do not apply to these sales that are subject to the $300
maximum tax.
12.

What transfers may exceed the $300 maximum tax?

The maximum tax does not apply to sales or leases of:
a.

trailers or semitrailers capable of being pulled by vehicles other than a truck tractor;

b.

pole trailers;

c.

boat trailers (See Question 13 for a complete explanation); and,

d.

all terrain vehicles or legend race cars (See SC Revenue Advisory Bulletin #00-03. These
vehicles cannot be licensed for use on South Carolina highways.)

NOTE: The local sales and use taxes apply to these sales that are not subject to the $300 maximum
tax.

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TRANSFERS OF BOATS, MOTORS, AND BOAT TRAILERS
13.

What is the sales, use, or casual excise tax rate when a boat, motor, or boat trailer is sold
individually or as a complete package?

SC Revenue Ruling #92-12 sets forth the following guidelines concerning the tax rates applicable to
the sale of boats, motors, or boat trailers:
a.

A boat sold alone is taxed at the lesser of 5% of the purchase price or $300.

b.

A motor sold alone is taxed at 5% of the purchase price.

c.

A boat trailer sold alone is taxed at 5% of the purchase price. (As stated in Question 1, the
casual excise tax does not apply to boat trailers.)

d.

A boat sold with a motor permanently attached to it is taxed at the lesser of 5% of the
purchase price of the boat and motor or $300.

e.

A boat trailer sold in conjunction with the sale of a boat is taxed at 5% of the purchase
price of the boat trailer. The boat is taxed at the lesser of 5% of the purchase price of the
boat or $300. (Boat trailers do not include trailers which must be pulled by truck tractors
or boat trailers which are used by manufacturers to transport boats to dealerships).

f.

A boat trailer sold in conjunction with the sale of a boat that has a permanently attached
motor is taxed at 5% of the purchase price of the trailer. The boat with a permanently
attached motor is taxed at the lesser of 5% of the purchase price of the boat and motor or
$300. (Note: If the price of the boat trailer is not separately stated from the price of the
boat and motor, the boat trailer is subject to tax at 5% of the fair market value of the boat
trailer. If the price of the boat trailer is separately stated from the price of the boat and
motor, the price breakdown must be reasonable and supported by the records of the
taxpayer, otherwise the trailer will be taxed at 5% of its fair market value.)

NOTE: A boat motor is considered permanently attached to a boat if it is (1) an inboard motor or (2)
an outboard motor sold mounted to the boat, connected to a permanent steering mechanism, and
included in the price of the boat.
SPECIAL PROVISION FOR PERSONS 85 OR OLDER
For purposes of the casual excise tax and the sales and use tax, the tax rate imposed on a purchase by
an individual 85 years old or older who titles or registers a motor vehicle, motorcycle, boat, motor,
airplane, trailer, semitrailer or pole trailer for his own personal use is 4%, instead of 5%. (See Code
Section 12-36-2640.)
LOCAL SALES AND USE TAXES
The South Carolina Code allows the imposition of various types of local sales and use taxes. As
such, the citizens of a county, depending on the needs within the county, may impose one or several
local sales and use taxes (e.g., local option, capital projects, etc.) As with the 5% State sales and use
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tax, there are certain exemptions from local sales or use taxes. The Department publishes a chart
with the various types of local sales and use taxes collected by the Department and the exemptions
allowed under each tax. As of the date of this advisory opinion, South Carolina Information Letter

04-9 contains the most recently published information; updated information will be published on

the Department’s website at http://www.sctax.org/Tax+Policy/Policy/salendx.htm as warranted.
DEFINITIONS
For purposes of computing the casual excise tax, maximum tax, or use tax, Code Section 56-3-20
provides the following definitions of motor vehicle, motorcycle, vehicle, trailer, semitrailer, pole
trailer, and truck tractor:
Motor Vehicle - Every vehicle which is self-propelled, except mopeds, and every vehicle which is
propelled by electric power obtained from overhead trolley wires, but not operated upon rails.
Motorcycle – Every motorcycle having no more than two permanent functional wheels in contact
with the ground or trailer and having a saddle for the use of the rider, but excluding a tractor.
Vehicle - Every device in, upon or by which any person or property is or may be transported or
drawn upon a highway, except devices moved by human power or used exclusively upon stationary
rails or tracks.
Trailer - Every vehicle with or without motive power, other than a pole trailer, designed for carrying
persons or property and for being drawn by a motor vehicle and so constructed that no part of its
weight rests upon the towing vehicle.
Semitrailer - Every vehicle with or without motive power, other than a pole trailer, designed for
carrying persons or property and for being drawn by a motor vehicle and so constructed that some
part of its weight and that of its load rests upon or is carried by another vehicle.
Pole Trailer - Every vehicle without motive power designed to be drawn by another vehicle and
attached to the towing vehicle by means of a reach or pole or by being boomed or otherwise secured
to the towing vehicle and ordinarily used for transporting long or irregularly shaped loads such as
poles, pipes or structural members capable, generally, of sustaining themselves as beams between
the supporting connections.
Truck Tractor - Every motor vehicle designed and used primarily for drawing other vehicles and not
so constructed as to carry a load other than a part of the weight of the vehicle and load so drawn.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Burnet R. Maybank III
Burnet R. Maybank III, Director
August 25
, 2004
Columbia, South Carolina

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