Did qualifying low-speed vehicles receive South Carolina's former $300 maximum sales tax as motor vehicles?

Plain-English summary

Under South Carolina's former sales-tax system, the Department treated a qualifying low-speed vehicle as a "motor vehicle" eligible for 5% state sales or use tax capped at $300, with no local sales tax. The vehicle had to satisfy the low-speed-vehicle rules in §§ 56-2-100 through 56-2-130.

The conclusion depended on the vehicle being authorized for highway use: it had to meet Federal Motor Vehicle Safety Standard 500, be titled, registered, licensed, insured like a passenger vehicle, and operated by a licensed driver at least 16 years old. Homemade low-speed vehicles and retrofitted golf carts did not qualify.

This ruling is historical. SC Revenue Ruling 18-1 expressly superseded RR 10-6 after South Carolina enacted the infrastructure maintenance fee effective July 1, 2017.

What this means for you

Buyers and owners

Do not calculate current tax using this ruling's $300 cap. It explains why qualifying low-speed vehicles were classified as motor vehicles under the former law, but later guidance changed the vehicle-tax framework.

Dealers

The ruling required sellers of low-speed vehicles to comply with motor-vehicle dealer licensing laws. Its classification also excluded homemade vehicles, retrofitted golf carts, and similar vehicles that could not receive qualifying low-speed-vehicle titles.

Tax professionals

The source date in the frontmatter has been corrected to March 23, 2010, the signature date. The erroneous 1985 date came from quoted historical language about the maximum-tax statute, not the ruling's issuance.

Common questions

Q: What was a low-speed vehicle under the ruling?
A: A four-wheeled motor vehicle, other than an all-terrain vehicle, capable of more than 20 but not more than 25 miles per hour on a paved level surface.

Q: Did every golf cart qualify?
A: No. Homemade low-speed vehicles, retrofitted golf carts, and similar vehicles were expressly excluded.

Q: Where could a qualifying vehicle operate?
A: Generally on secondary highways posted at 35 mph or less, with limited crossing authority and possible stricter local or transportation-department restrictions.

Q: Is the $300 cap current?
A: No. RR 18-1 expressly superseded this ruling and addressed the later infrastructure maintenance fee.

Citations and references

• S.C. Code § 12-36-2110(A) (former maximum-tax provision)
• S.C. Code §§ 56-1-10(19) and 56-3-20 (low-speed and motor-vehicle definitions)
• S.C. Code §§ 56-2-100 through 56-2-130 (operation, licensing, title, registration, and dealers)
• 49 C.F.R. § 571.500 (Federal Motor Vehicle Safety Standard 500)
• SC Revenue Ruling 18-1 (expressly superseded RR 10-6)

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR10-6.pdf
• Official superseding RR 18-1 PDF: https://dor.sc.gov/sites/dor/files/policies/RR18-1.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 #10-6

SUBJECT:

Low Speed Vehicles
(Sales and Use Tax)

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous advisory opinions and any oral directives in
conflict herewith.

REFERENCES:

S. C. Code Ann. Section 12-36-2110(A) (2000; 2008)
S. C. Code Ann. Section 56-3-20 (2006)
S. C. Code Ann. Section 56-1-10(19) (Supp. 2009)
S. C. Code Ann. Section 56-2-100 (Supp. 2009)
S. C. Code Ann. Section 56-2-110 (Supp. 2009)
S. C. Code Ann. Section 56-2-120 (Supp. 2009)
S. C. Code Ann. Section 56-2-130 (Supp. 2009)
S. C. Code Ann. Section 56-2-2740(A) (Supp. 2009)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2000)
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 and to Department personnel. 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 Departmental advisory opinion.

Question:
Are sales of low speed vehicles as described in the facts entitled to the maximum tax
under Code Section 12-36-2110(A) as “motor vehicles?”
Conclusion:
It is the department’s opinion that sales of low speed vehicles as described in the facts
that meet the requirements of Code Sections 56-2-100 through 56-2-130 are entitled to
the maximum tax under Code Section 12-36-2110(A). Low speed vehicles entitled to the
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maximum tax under Code Section 12-36-2110(A) are subject to the state sales and use
tax at a rate of 5% (local sales and use taxes do not apply), but the state sales and use tax
due cannot exceed $300.
Facts:
The question has arisen as to whether low speed vehicles are entitled to the maximum tax
of $300.
A "low speed vehicle" or "LSV" is “a four-wheeled motor vehicle, other than an all
terrain vehicle, whose speed attainable in one mile is more than twenty miles an hour and
not more than twenty-five miles an hour on a paved level surface.” 1
Discussion:
The issue is whether low speed vehicles are “motor vehicles” entitled to the maximum
tax of $300 as set forth in Code Section 12-36-2110(A).
Code Section 12-36-2110(A) reads in part:
(A) 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:
(1) aircraft, including unassembled aircraft which is to be assembled by
the purchaser, but not items to be added to the unassembled aircraft;
(2) motor vehicle;
(3) motorcycle;
(4) boat;
(5) trailer or semitrailer, pulled by a truck tractor, as defined in Section
56-3-20, and horse trailers, but not including house trailers or campers
as defined in Section 56-3-710 or a fire safety education trailer;
(6) recreational vehicle, including tent campers, travel trailer, park
model, park trailer, motor home, and fifth wheel; or
(7) self-propelled light construction equipment with compatible
attachments limited to a maximum of one hundred sixty net engine
horsepower.

1

SC Code Section 56-1-10(19).

2

In the case of a lease, the total tax rate required by law applies on each
payment until the total tax paid equals three hundred dollars. Nothing in
this section prohibits a taxpayer from paying the total tax due at the time
of execution of the lease, or with any payment under the lease. To qualify
for the tax limitation provided by this section, a lease must be in writing
and specifically state the term of, and remain in force for, a period in
excess of ninety continuous days.
Even though Code Section 12-36-2110 does not refer to the definition in Code Section
56-3-20 2 with respect to "motor vehicles" (it does with respect to trailers and
semitrailers), it has been the Department’s longstanding policy to use the definition of
“motor vehicle” in Code Section 56-3-20 for the purposes of the maximum tax.
Code Section 56-3-20 defines a "motor vehicle" as follows:
(2) "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; (Emphasis
added.)
Code Section 56-3-20 defines a "vehicle" and "highway" as follows:
(1) "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;
(Emphasis added.)
(25) "Street" or "highway:" The entire width between boundary lines of
every way publicly maintained when any part thereof is open to the use of
the public for purposes of vehicular travel.
Based on the phrase "is or may be transported or drawn upon a highway" as found in the
definition of “vehicle,” a motor vehicle is one which is authorized for use on the
highways of this state.
Code Section 56-1-10(19) 3 defines a low speed vehicles as “a four-wheeled motor
vehicle, other than an all terrain vehicle, whose speed attainable in one mile is more than
twenty miles an hour and not more than twenty-five miles an hour on a paved level
surface.”
In addition, Code Section 56-1-10 defines the terms “motor vehicle” and “highway,”
which are nearly identical to the above definitions from Code Section 56-3-20.

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3

Chapter 3 of Title 56 concerns motor vehicle registration and licensing.
Chapter 1 of Title 56 concerns the driver’s licenses.

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Code Section 56-2-100 concerns the conditions for operating a low speed vehicle on a
highway, and states:
(A) A low speed vehicle may be operated only on a secondary highway
for which the posted speed limit is thirty-five miles an hour or less.
(B) A low speed vehicle may cross a highway at an intersection where the
highway has a posted speed limit of more than thirty-five miles an hour.
(C) A low speed vehicle must meet the requirements of Federal Motor
Vehicle Safety Standard 500 (Part 49 Section 571.500 of the Code of
Federal Regulations) at all times when operated on any highway. A low
speed vehicle that complies with the equipment requirements in 49 C.F.R.
Section 571.500 complies with all equipment requirements of this title.
(D) Nothing in this section prevents local governments from adopting
more stringent local ordinances governing low speed vehicle operation.
(E) A county or municipality may prohibit the operation of low speed
vehicles on any street or highway if the governing body of the county or
municipality determines that the prohibition is necessary in the interest of
safety.
(F) The Department of Transportation may prohibit the operation of low
speed vehicles on any street or highway if it determines that the
prohibition is necessary in the interest of safety.
(G) A farm vehicle, as defined in Section 56-1-2070(C)(2), is not a low
speed vehicle for the purposes of this article.
Code Section 56-2-110 concerns driver’s licenses and registration cards with respect to
low speed vehicles, and states:
A person operating a low speed vehicle must be at least sixteen years of
age and shall hold a valid driver's license. The operator of a low speed
vehicle being operated on a highway must have in his possession:
(1) the registration card issued by the department or the registration
card issued by the state in which the low speed vehicle is registered;
and
(2) his driver's license.

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Code Section 56-2-120 concerns the titling of low speed vehicles, and states:
(A) A low speed vehicle must be titled as specified in this title. The
manufacturer's or importer's certificate of origin must identify clearly the
vehicle as a low speed vehicle and must certify that the vehicle was
manufactured in compliance with the equipment requirements for low
speed vehicles in 49 C.F.R. Section 571.500. The State shall not issue
vehicle identification numbers to homemade low speed vehicles,
retrofitted golf carts, or any other similar vehicles, and these vehicles shall
not qualify as low speed vehicles in this State.
(B) If the vehicle is owned by a nonresident, but is subject to issuance of a
certificate of title in this State, the application must also contain his:
(1) full legal name, social security number, or, if the primary user does
not have a social security number but has a passport, his passport
number;
(2) driver's license number, whether the license was issued by this State
or another jurisdiction;
(3) date of birth;
(4) bona fide principal residence address;
(5) address in this State where the low speed vehicle will be housed and
used; and
(6) mailing address of the primary user of the vehicle. If the primary
user is a firm, association, or corporation, the application must contain
the business address and federal employer identification number of the
primary user.
(C) A low speed vehicle must be registered and licensed in the same
fashion as passenger vehicles pursuant to this title and is subject to the
same insurance requirements applicable to other motor vehicles under this
title.
(D) The Department of Motor Vehicles shall establish a special size and
class of license plate for low speed vehicles that clearly identifies the
vehicle as a low speed vehicle.
Code Section 56-2-130 requires that “[a] person engaged in the wholesale or retail sale
of low speed vehicles must comply with the motor vehicle dealer licensing laws of this
State …”

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Code Section 56-2-2740(A) states that “[t]he Department of Motor Vehicles must refuse
to renew the driver's license and motor vehicle registration of a person who has not paid
personal property taxes within the time limits prescribed in [Chapter 2 of Title 56].”
Based on the above, a low speed vehicle that meets the above requirements may be
operated on secondary highways for which the posted speed limit is 35 miles an hour or
less. In addition, such low speed vehicles must be registered and licensed with the
Department of Motor Vehicles and may be only operated by a person who is at least 16
years of age and who has a valid driver’s license. The property taxes on the low speed
vehicle must also be paid (as with any other motor vehicle) before it may be registered
and licensed and receive a license plate from the Department of Motor Vehicles. 4
A low speed vehicle must also meet the requirements of Federal Motor Vehicle Safety
Standard 500 at all times when operated on any highway and one that that complies with
the equipment requirements in 49 C.F.R. Section 571.500 is considered complying with
all equipment requirements of Title 56.
Finally, a low speed vehicle does not include homemade low speed vehicles, retrofitted
golf carts, or any other similar vehicles.
Therefore, a low speed vehicle as defined in Code Section 56-1-10(19) and meeting the
requirements of Code Sections 56-2-100 through 56-2-130 is authorized for use on the
highways of this state and is entitled to the maximum tax under Code Section 12-362110(A).
Even though a qualifying low speed vehicle may not be operated on highways with
posted speed limits of more than 35 miles an hour (except as allowed in Code Section 562-100(B)), it must be titled, registered and licensed (including the payment of property
taxes), must be operated by a licensed driver who is 16 or more years of age, and must
meet certain equipment requirements. As such, it is authorized for use on the highways of
this state and entitled to the maximum tax under Code Section 12-36-2110(A).

SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Ray N. Stevens
Ray N. Stevens, Director
March 23,
, 2010
Columbia, South Carolina

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The license plate issued for low speed vehicle begins with the letters “LV.”

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