When does South Carolina's casual excise tax apply to a boat, boat motor, or airplane, and how much is it?
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This page answers the general question as of 2022. Ezel answers yours, under current South Carolina tax law, with citations.
Plain-English summary
South Carolina Revenue Ruling #22-6 explains the casual excise tax on boats, boat motors, and airplanes — the tax that applies to a private-party (non-retailer) sale when the item gets titled. It updates the prior ruling (RR #20-1) to reflect a 2022 law change (Act No. 237, § 4) and is effective for sales on or after July 1, 2022.
What the casual excise tax is. It's imposed on the issuance of a certificate of title (or other proof of ownership) for a boat, boat motor, or airplane that must be registered, titled, or licensed. It applies only to the last sale before the title application, and the purchaser is liable — an individual or other non-retailer seller in South Carolina does not collect it. It does not apply to motor vehicles, motorcycles, trailers (including boat trailers), semitrailers, or pole trailers (§§ 12-36-1710(A), 12-36-1720).
Retailer sale vs. private sale — the key split.
- Sold by a retailer → sales or use tax, not casual excise tax. The SC retailer collects and remits it. (A retailer can't skip this just because DNR could collect a tax at registration.)
- Sold by a non-retailer (e.g., an individual — a "casual sale") → casual excise tax, paid by the buyer at titling.
The rate: 5%, capped at $500. The casual excise tax is 5% of fair market value, but no more than $500 (the "maximum tax," § 12-36-2110). Fair market value = the total purchase price less any trade-in, or a national used-value publication (used only when necessary). A buyer 85 or older purchasing for personal use gets the 1% reduction → 4% (still capped at $500). Local sales and use taxes never apply to a casual-excise transaction.
The 2022 change. Act No. 237 added watercraft motors (boat motors) to the maximum-tax list. Effective July 1, 2022, boat-motor sales are taxed at 5%, max $500 (sales/use or casual excise) and are exempt from all local sales and use taxes.
Federal titles are off-limits to the tax. Because of federal tax immunity (SC Attorney General Op. #83-33; United States v. Livingston; McCulloch v. Maryland), the casual excise tax does not apply when the title/documentation is issued by a federal agency — the U.S. Coast Guard or U.S. Customs for a vessel, or the FAA for an airplane (airplanes in SC are titled by the FAA, part of the federal government).
Out-of-state purchases brought into South Carolina:
- Bought from a retailer → use tax applies to storage/use in SC (with a credit for sales/use tax paid to another state). Not owed if the item was substantially used outside SC before being brought in.
- Bought from a non-retailer → casual excise tax at titling, if no sales/use tax was paid. Again, not owed if substantially used outside SC first.
When no tax is due. Gifts and prizes aren't sales, so they're not taxed. Statutory exemptions (§§ 12-36-1710, 12-36-1720) include transfers to immediate family (spouse, parent, child, sibling, grandparent, grandchild), heirs/legatees/distributees, individual-to-partnership or shareholder-to-corporation on formation, to a financial institution or secured party for resale, trade-ins, and transfers where sales or use tax was already paid. Airplanes exempt under § 12-36-2120 (e.g., crop-dusting/farm-use aircraft), the sale of an entire business, and sales by/to the federal government or federal credit unions are also exempt.
How to pay. Use Form ST-236 ("Casual or Use Excise Tax Return"); it can be paid at the Department of Revenue or at DNR when registering a boat or motor.
What this means for you
Buying a boat, motor, or airplane from a private seller
Budget for the casual excise tax you (the buyer) owe at titling — 5% of the price minus trade-in, but never more than $500. If you're 85+ buying for personal use, it's 4%. Bought it out of state and used it substantially there first? You may owe nothing when you bring it in. Getting it as a gift, from family, or as an inheritance? Likely exempt. Note that a boat trailer is not a casual-excise item at all — see the companion ruling RR #22-7 for how trailers (and package deals) are taxed.
Boat/airplane dealers and retailers
Your retail sales are sales/use tax transactions (5%, max $500 for boats and motors after July 1, 2022) — not casual excise tax — and you must collect and remit even though DNR collects at registration for private sales. Remember boat motors became a $500-max, local-tax-exempt item on July 1, 2022.
Accountants and tax professionals
The analytical fork is retailer (sales/use) vs. non-retailer (casual excise), with the $500 maximum tax and local-tax exemption applying across both for boats and (post-2022) motors. Watch the federal-title immunity (Coast Guard/Customs/FAA), the substantial-use-outside-SC exception for imports, and the enumerated exempt transfers. For combined boat+motor+trailer sales, apply RR #22-7's item-by-item calculation.
Common questions
Q: Who pays the casual excise tax — buyer or seller?
A: The purchaser. An individual or other non-retailer seller in South Carolina does not collect it; the buyer pays it when the title is issued.
Q: How much is it?
A: 5% of fair market value (price less trade-in), capped at $500. Buyers 85 or older pay 4% for personal use. Local sales and use taxes don't apply.
Q: I'm buying from a dealer — is it casual excise tax?
A: No. A retail (dealer) sale is subject to sales or use tax instead — for boats and boat motors, 5% capped at $500 (since July 1, 2022 for motors).
Q: My boat is documented with the U.S. Coast Guard — do I owe the tax?
A: No. The casual excise tax doesn't apply when the title or documentation is issued by a federal agency (Coast Guard, Customs, or the FAA for airplanes).
Q: Are family transfers or gifts taxed?
A: No. Gifts, prizes, and transfers to immediate family or heirs (among others) are exempt, as are transfers where sales or use tax was already paid.
Q: How do I pay it?
A: On Form ST-236, either at the Department of Revenue or at DNR when you register the boat or motor.
Citations and references
Statutes:
- S.C. Code Ann. § 12-36-1710 — imposes the casual excise tax on boats, motors, and airplanes and lists the exclusions/exemptions
- S.C. Code Ann. § 12-36-1720 — the tax applies only to the last sale before the title application
- S.C. Code Ann. § 12-36-2110 — the $500 maximum tax; amended in 2022 to add watercraft motors
- S.C. Code Ann. § 12-36-2120 — sales/use tax exemptions that carry over to the casual excise tax (farm-use aircraft, sale of a business, federal government/credit unions)
- S.C. Code Ann. § 12-36-1310 — the use tax (out-of-state purchases from retailers)
- Act No. 237, Section 4, of 2022 — added watercraft motors to the maximum tax, effective July 1, 2022
Authorities discussed in prose (not linked): SC Attorney General Opinion #83-33 (1983) and #S-OAG-59; United States v. Livingston, 179 F. Supp. 9, aff'd 364 U.S. 855; McCulloch v. Maryland, 4 Wheat. 316 — federal tax immunity for federally issued titles. Form ST-236 is the return.
Related Department rulings (described in prose, not linked): RR #22-6 supersedes RR #20-1; the companion ruling RR #22-7 covers boats sold with motors and/or trailers.
Source
- Landing page: SC Advisory Opinion Search
- Original PDF: RR22-6.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 29214-0575
SC REVENUE RULING #22-6
SUBJECT:
Sales of Boats, Boat Motors, and Airplanes
(Casual Excise Tax)
EFFECTIVE DATE:
For sales of boats, boat motors, and airplanes on or after July 1, 2022
SUPERSEDES:
SC Revenue Ruling #20-1, and all previous advisory opinions and any
oral directives in conflict herewith.
REFERENCES:
S.C. Code Ann. Section 12-36-1710 (2014; Supp. 2021)
S.C. Code Ann. Section 12-36-2110 (2014; Supp. 2021)
S.C. Code Ann. Section 12-36-1720 (2014)
Act No. 237, Section 4, of 2022
AUTHORITY:
S.C. Code Ann. Section 12-4-320 (2014)
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 Department advisory
opinion.
PURPOSE OF UPDATE
The purpose of this advisory opinion is to update guidance concerning the application of the
casual excise tax on sales of airplanes, boats, and boat motors when the sales and use tax has not
previously been paid to reflect the following law change enacted by the General Assembly in Act
No. 237, Section 4, of 2022:
Maximum Tax – Watercraft Motors: Code Section 12-36-2110(A), concerning the sales of
items subject to a maximum sales and use tax and maximum casual excise tax, has been
amended to add watercraft motors (i.e., boat motors). The sales of watercraft motors, effective
July 1, 2022, are subject to the sales and use tax or the casual excise tax at a rate of 5%, but no
more than $500. With this amendment, sales of watercraft motors are exempt from all local
sales and use taxes administered and collected by the Department effective July 1, 2022.
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QUESTIONS AND ANSWERS
TAX COMPUTATION, TAX RATES, AND PAYMENTS
- Q. What is the casual excise tax and when is it imposed on sales of boats, boat motors, or
airplanes?
A. The casual excise tax is imposed upon the issuance of a certificate of title or other proof
of ownership for every (1) boat, (2) boat motor, or (3) airplane required to be registered,
titled, or licensed. It only applies to the last sale before the application for title. The
casual excise tax does not apply to motor vehicles, motorcycles, trailers (including boat
trailers), semitrailers, or pole trailers. See Code Sections 12-36-1710(A) and 12-36-1720.
An individual or non-retailer located in South Carolina who sold the item is not responsible
for collecting the casual excise tax. The purchaser is liable for paying the casual excise tax. - Q. Does the casual excise tax apply to the issuance by the federal government of a certificate
of title or other proof of ownership for a boat, boat motor, or airplane?
A. No. The casual excise tax does not apply to the issuance by the federal government of a
certificate of title or other proof of ownership for a boat, boat motor, or airplane.
Code Section 50-23-20 requires all watercraft held or principally used in South Carolina
to be titled by the SC Department of Natural Resources (“DNR”). However, Code
Section 50-23-30 provides an exemption from this titling requirement for watercraft
documented with the United States Coast Guard. In addition, South Carolina Attorney
General Opinion #83-33 (July 8, 1983) addressed a question of whether South Carolina
can impose the casual excise tax on a certificate of title or other proof of ownership
issued by the U.S. Commissioner of Customs for a vessel. In finding that the casual
excise tax may not be imposed, the opinion cited the exemption in a prior version of
Code Section 50-23-30 1 and further said:
In United States v. Livingston, 179 F. Supp. 9, affirmed 364 U.S. 855, 80
S. Ct. 1611, 4 L. Ed. 2d 1719, it was stated that:
“The doctrine of mutual immunity of state and of nation
from taxation by the other, enunciated by Chief Justice
Marshall in M'Culloch v. State of Maryland, 4 Wheat. 316,
4 L. Ed. 579, has not lost vitality with age. If, at times, it
has seemed that 'the line between the taxable and the
immune has been drawn by an unsteady hand,' the basic
principle that the United States, its property, its essential
functions and activities are not subjects of taxation by the
states has not been questioned in modern times.”
Since the issuance of South Carolina Attorney General Opinion #83-33, the exemption cited in the prior version of
Code Section 50-23-30 has been modified but is substantially the same.
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Under such, the State cannot impose a tax upon the issuance by the United
States of the certificate of documentation and registry. … The casual
excise tax is not applicable to the documentation and registry issued by the
United States Customs office.
Based on the above, the casual excise tax does not apply to the issuance of a title, other
proof of ownership, or other documentation for a boat by a federal government agency,
such as the U.S. Coast Guard or U.S. Customs and Border Protection. 2
In addition, the SC Aeronautics Commission has informed the Department that airplanes
in South Carolina are registered, titled, and licensed by the Federal Aviation
Administration (“FAA”), not by the SC Aeronautics Commission. The FAA became a
component of the U.S. Department of Transportation in 1967 pursuant to the Department
of Transportation Act (49 U.S.C. 106). Since the Department of Transportation is part of
the federal government, for the same reasons stated above, the casual excise tax does not
apply to the FAA’s issuance of a title or other proof of ownership for an airplane in South
Carolina.
- Q. What is the casual excise tax rate?
A. Below is a summary of the applicable tax rate that may be imposed on transfers of boats,
boat motors, and airplanes.
General Tax Rates:
The casual excise tax is 5% of the “fair market value” of the boat, boat motor, or airplane
purchased. (See Question 4 for the definition of “fair market value.”) However, Code Section
12-36-2110 provides that the casual excise tax on sales of boats, boat motors, or airplanes may
not exceed $500 (maximum tax) on these transactions.
Special Provision for Persons 85 and Older:
South Carolina sales and use tax law provides for a 1% lower state tax rate for purchases by
individuals 85 years of age and older for their personal use. The lower tax rate is referred to as the
1% exclusion or reduction.
Therefore, the casual excise tax is 4% (instead of 5%) of the “fair market value” of the
boat, boat motor, or airplane purchased by an individual 85 years or older for his personal
use, not to exceed $500 (maximum tax).
The U.S. Coast Guard and U.S. Customs and Border Protection are federal agencies within the U.S. Department of
Homeland Security. U.S. Coast Guard Vessel Documentation is a national form of boat registration. Documented
vessels do not have titles; they maintain Certificates of Documentation that expire in 1-5 years from issuance. See
https://unitedstatesvessel.us/certificate-of-documentation/.
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Maximum Tax:
The maximum tax provisions apply to the casual excise tax in the same manner that the
maximum tax provisions apply to the sales tax and the use tax.
Therefore, the maximum tax of $500 applies to a transfer of a boat, a boat motor, or an
airplane that is subject to the casual excise tax.
Local Sales and Use Taxes:
Local sales and use taxes administered and collected by the Department on behalf of local
jurisdictions do not apply to transactions subject to the casual excise tax.
- Q. What is the amount on which the casual excise tax is computed?
A. 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 boat, 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 boat.
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. - Q. When is the casual excise tax due?
A. The casual excise tax is due upon the issuance of a certificate of title, or other proof of
ownership, of a boat, boat motor, or airplane required to be registered, titled, or licensed. - Q. How is the casual excise tax remitted?
A. Department of Revenue Form ST-236, “Casual or Use Excise Tax Return,” is used to
compute the casual excise tax due on the transfer of a boat, boat motor, or airplane.
The tax may be paid at the Department of Revenue or the Department of Natural
Resources when registering a boat or boat motor.
APPLICABILITY OF SALES TAX, USE TAX, OR CASUAL EXCISE TAX - Q. Is the sale of a boat, boat motor, or airplane by a non-retailer (a person not in the business
of selling tangible personal property at retail, e.g., a casual sale by an individual) subject
to the casual excise tax?
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A. Yes. However, an individual or non-retailer located in South Carolina who sold the item is
not responsible for collecting the casual excise tax upon the sale of a boat, boat motor, or
airplane. The purchaser is liable for paying the casual excise tax.
- Q. Is the sale of a boat, boat motor, or airplane by a retailer subject to the casual excise tax?
A. No, however, the sale of a boat, boat motor, or airplane by a retailer is subject to the sales
tax or the use tax. The South Carolina retailer collects and remits sales tax to the
Department upon the sale of a boat, boat motor, or airplane. - Q. Does a licensed South Carolina retailer have the option of not remitting the sales tax or
the use tax on the sale of a boat or a boat motor since the Department of Natural
Resources has the authority to collect the casual excise tax or the use tax when the boat or
boat motor is registered, titled, or licensed?
A. No. The retailer must remit the sales tax or the use tax on a retail sale (unless otherwise
exempt) of a boat or boat motor when the delivery of the boat or boat motor is made in,
or into, South Carolina. - Q. If a South Carolina resident or business purchases a boat, boat motor, or airplane outside
of South Carolina and brings the boat, boat motor, or airplane to South Carolina for use in
South Carolina, is the South Carolina resident or business liable for the use tax or the
casual excise tax?
A. The tax to be collected (use tax or casual excise tax) depends on whether the boat, boat
motor, or airplane purchased outside of South Carolina is purchased from a retailer or a
non-retailer as explained below.
Purchases from Retailer:
The use tax applies to the storage, use, or other consumption in South Carolina of boats, boat
motors, and airplanes purchased from a retailer located outside South Carolina for storage, use,
or other consumption in South Carolina.
If a sales or use tax was due and paid in another state on such purchases, a credit against the
South Carolina use tax is allowed.
Note: The use tax does not apply to property purchased from a retailer located outside
South Carolina if the property is used substantially outside South Carolina by the
purchaser before being stored, used, or consumed in South Carolina.
Purchases from Non-Retailer:
The casual excise tax applies to the issuance of every certificate of title, or other proof of
ownership, for boats, boat motors, and airplanes purchased outside South Carolina from
non-retailers if a sales or use tax has not been paid on the transaction necessitating the
transfer of title.
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Note: The casual excise tax does not apply to property purchased outside South Carolina
if the property has been substantially used outside South Carolina by the purchaser before
being titled, registered, or licensed in South Carolina.
- Q. Does the maximum tax provisions for a boat, boat motor, and an airplane apply to the
casual excise tax, as well as the sales tax and the use tax?
A. Yes. Note: Since boats may be sold with a boat motor and trailer, the Department has
issued an advisory opinion, entitled “Sales of Boats, Boat Motors, and Boat Trailers,”
concerning the application of the sales tax, the use tax, and the casual excise tax to the
sale of boats, boat motors, and boat trailers. See the Department’s website (dor.sc.gov)
for the most recent version of this advisory opinion.
TRANSFERS NOT SUBJECT TO THE TAX - Q. Does the casual excise tax apply to a boat, boat motor, or an airplane transferred to
another person as a gift or as a prize?
A. No. The casual excise tax does not apply to property transferred as a gift or prize in that
there has not been a sale to the person receiving the property. (See Code Section 12-361710(B) for exclusions.) - Q. What transactions are exempt from the casual excise tax?
A. The following transfers of boats, boat motors, or airplanes are specifically exempted from
the casual excise tax pursuant to Code Sections 12-36-1710 and 12-36-1720:
• Transfers to members of the immediate family (i.e., spouse, parent, child, sister,
brother, grandparent, and grandchild);
• Transfers to a legal heir, legatee, or distributee;
• Transfers from an individual to a partnership upon formation, or from a stockholder
to a corporation upon formation;
• Transfers to a financial institution for the purpose of resale;
• Transfers to any other secured party, as a result of repossession, for the purpose of
resale;
• Transfers to the seller or secured party in partial payment (e.g., trade-ins);
• 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);
• Transfers of airplanes specifically exempted by Section 12-36-2120 from the sales
or use tax (see Question 14 below);
• Transfers that are a gift or prize;
• Transfers of where the title, or other proof of ownership, for a vessel is issued by a
federal government agency, such as the U.S. Coast Guard or U.S. Customs and
Border Protection; and,
• Transfers of airplanes where the title, or other proof of ownership, for an airplane is
issued by a Federal Aviation Administration (“FAA”).
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14. Q. What transfers are exempt from the casual excise tax because they are exempt from sales
or use tax under Code Section 12-36-2120 or otherwise exempt or excluded under the
law?
A. Below are examples of transfers of boats, boat motors, and airplanes that are exempt from
sales and use tax under Code Section 12-36-2120 or otherwise exempt or excluded under the
law and, therefore, exempt or excluded from the casual excise tax. These examples illustrate
frequent methods of transfer, and are not intended to be all-inclusive.
Type of Transfer
Explanation of Tax Exemption
Sales of Farm
Machinery
Airplanes used in planting, cultivating, or harvesting farm
crops (e.g., crop dusting) are exempt.
Sale of Entire Business
Code Section 12-36-2120(16).
Depreciable assets used in the operation of a business are
exempt when the entire business is sold by the owner, pursuant
to a written contract, and the purchaser continues operation of
the business.
Code Section 12-36-2120(42).
Sales by, or Sales to, the When agents of the federal government purchase a boat, boat
Federal Government or motor, or airplane on behalf of the federal government, the
Federal Credit Unions
purchase is not subject to tax 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.
Code Section 12-36-2120(1) and (2). See SC Attorney General
Opinion #S-OAG-59 that concluded federally chartered credit
unions are instrumentalities of the federal government.
SOUTH CAROLINA DEPARTMENT OF REVENUE
s/W. Hartley Powell
W. Hartley Powell, Director
October 20
, 2022
Columbia, South Carolina
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