Under SC Revenue Ruling 14-2, were ordinary utility trailers subject to the maximum sales-tax cap?

Plain-English summary

South Carolina Revenue Ruling 14-2 concluded that an ordinary utility trailer capable of being pulled by an automobile, minivan, or pickup truck was subject to the full 6% state sales or use tax plus applicable local sales and use tax.

It did not qualify for the ruling's former $300 maximum-tax cap merely because it was a trailer.

This is historical guidance. The ruling predates the Infrastructure Maintenance Fee, and RR 25-2 now addresses current sales-tax-versus-IMF treatment for boat, farm, and other utility trailers.

Why the old cap did not apply

The 2014 maximum-tax statute covered specified trailer categories, including:

• recreational vehicles such as tent campers, travel trailers, park trailers, motor homes, and fifth wheels;
• trailers or semitrailers capable of being pulled only by a truck tractor;
• fire-safety education trailers; and
• horse trailers.

An ordinary utility trailer pulled by a car, minivan, or pickup did not fit those categories. The ruling therefore applied the normal state rate and applicable local taxes.

Local-tax result

The ruling explained that Department-administered local sales and use taxes did not apply to items subject to the maximum tax. Because the ordinary utility trailers at issue did not qualify for the cap, applicable local sales or use tax also applied.

Current-law caution

RR 25-2 explains that current treatment may turn on whether a trailer is privately owned, not for hire, exempt from registration, or subject to the Infrastructure Maintenance Fee. It also rejects an earlier personal-use-versus-business-use approach. A present transaction should be classified under that newer framework and current statutes.

Common questions

Q: Did every trailer qualify for the old maximum tax?

A: No. Only the trailer categories listed by the statute qualified.

Q: Did a utility trailer pulled by a pickup receive the old $300 cap?

A: No, unless it independently fit another listed category such as a recreational vehicle, fire-safety education trailer, or horse trailer.

Q: Did local tax apply?

A: Yes under the ruling, because the transaction was not subject to the maximum tax.

Q: Should a dealer use RR 14-2 for a current sale?

A: Not by itself. Current trailer treatment should be checked under RR 25-2, registration law, and the IMF rules.

Citations and references

• S.C. Code Ann. §§ 12-36-910(A), 12-36-1110, and 12-36-1310(A) (state sales and use tax described by the ruling)
• S.C. Code Ann. § 12-36-2110 (historical maximum-tax categories)
• S.C. Code Ann. § 56-3-20 (truck tractor definition cited by the ruling)
• SC Revenue Ruling #25-2 (newer utility-trailer guidance identified in the corpus)

Subject

Sales of Utility Trailers

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR14-2.pdf

Original ruling text

State of South Carolina
Department of Revenue
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 125, Columbia, South Carolina 29214

SC REVENUE RULING #14-2

SUBJECT:

Sales of Utility Trailers
(Sales and Use Taxes)

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 12-36-2110 (2014)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2014)
S.C. Code Ann. Section 1-23-10(4) (Supp. 2012)
SC Revenue Procedure #09-3

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public. It
is an advisory opinion issued to apply principles of tax law to a set of
facts or a 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:
What amount of sales and use tax should be imposed upon sales of utility trailers that are capable
of being pulled by an automobile, minivan, or pick-up truck?
Conclusion:
Sales of utility trailers that are capable of being pulled by an automobile, minivan or pick-up
truck, and that are not recreational vehicles, fire safety education trailers or horse trailers, are
subject to the State sale and use tax at a rate of 6%, plus any applicable local sales and use tax. In
addition, these utility trailers are not subject to the $300 maximum sales and use tax cap.
Facts:
Questions have arisen concerning the application of sales tax and use tax on sales of utility
trailers that are capable of being pulled by an automobile, minivan, or pick-up truck. The issue is
whether such utility trailers are subject to the maximum sales and use tax of $300 afforded
certain vehicles under the South Carolina sales and use tax.

1

Discussion:
Code Section 12-36-910(A) imposes a sales tax and reads, in part:
A sales tax, equal to five percent of the gross proceeds of sales is imposed upon every
person engaged or continuing within this State in the business of selling tangible personal
property at retail.
Code Section 12-36-1310(A) imposes a use tax and reads, in part:
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.
However, Code Section 12-36-1110 increased the State sales and use tax rate by 1%, for a total
State rate of 6%, on all sales of tangible personal property as defined under the law except sales
of accommodations furnished to transients subject to the tax under Code Section 12-36-920(A)
and sales of items subject to the maximum tax under Code Section 12-36-2110.
Code Section 12-36-2110(A) establishes a maximum sales and use tax cap of $300 on certain
items, and reads in part:
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:

(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

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.

2

In summary, Code Section 12-36-2110(A) establishes a maximum sales and use tax cap of $300
for each sale or lease of each of the following trailers and semitrailers 1

1. recreational vehicles, including tent campers, travel trailers, park trailers , … and fifth
   wheels;
2. trailers or semitrailers capable of being pulled only by a truck tractor2 (This does not
   include house trailers or campers as defined in Section 56-3-710);
3. fire safety education trailers; and
4. horse trailers.
   Finally, local taxes administered and collected by the Department on behalf of local jurisdictions
   do not apply to the sale or lease of tangible personal property subject to a maximum tax. If the
   $300 maximum sales and use tax cap does not apply to the sale of a particular type of trailer or
   semitrailer, then the sale of that trailer or semitrailer is subject to any applicable local sales and
   use tax.
   Based on the above, sales of utility trailers that are capable of being pulled by an automobile,
   minivan or pick-up truck, and that are not recreational vehicles, fire safety education trailers or
   horse trailers, are subject to the State sale and use tax at a rate of 6%, plus any applicable local
   sales and use tax. In addition, these utility trailers are not subject to the $300 maximum sales and
   use tax cap.
   SOUTH CAROLINA DEPARTMENT OF REVENUE

s/William M. Blume, Jr.
William M. Blume, Jr., Director
May 6
, 2014
Columbia, South Carolina

1 The maximum sales and use tax also applies to other vehicles that are not relevant to the issue addressed

in this advisory opinion, such as motor vehicles, motorcycles, boats, aircraft, and self-propelled light
construction equipment.
2 A “truck tractor” is a “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.” See Code
Section 56-3-20.

3