If you are a South Carolina resident who is thinking of purchasing a car in the near future, you mind find a surprise when you get your final total. During the beginning of July, the state’s highest vehicle sales tax increased from $300 to $500 on new and used cars that cost more than $6,000.
However, according to lawmakers, there is a good reason the South Carolina sales tax increases on cars. In May of 2017, the South Carolina state government passed Bill H3516, which called for an increase in various taxes including car sales taxes and gas taxes. The intention of the bill is to use the extra money that the state would gain from the increased taxes to repair the arguably crumbling roads and infrastructure of the state of South Carolina. With this said, the bill did not pass without a fight. According to the SC State House website, on the same day that the bill was ratified by state lawmakers, the Republican governor of the state, Henry McMaster, vetoed the bill. However, due to the bill’s overwhelmingly positive support in the SC House and Senate, the governor’s veto was almost immediately overridden and was set to eventually become law in July.
Now that the bill is officially law, lawmakers hope that the tax increases associated with the bill will be able to raise about $600 million a year by 2022. This is not to say that the bill is no longer facing pushback by the public. Many South Carolina citizens believe that the bill only creates more of a tax burden on SC consumers, who were already taxed $300 at the point-of-sale and later, based on the value of the vehicle, by the car owner’s local government. The Carolinas Independent Automobile Dealers Association also does not agree with the tax increase, claiming that there are other ways to fix the state’s roads that do not involve raising car sales taxes.
However, the bill does have its proponents. Many citizens believe that this tax increase is needed, as the abysmal state of the roads within the state causes damage to cars and makes their state look rather bad. The most outspoken proponents of the tax increase seem to be the lawmakers who passed the bill. For example, Rep. Gar Simrill, of York County, stated that car buyers should have good-quality roads to drive on.
This increase in car and gas taxes is the first increase that the state has seen in 30 years. Even with this increase, the state’s Transportation Department has stated that this increase will not come up with enough money to actually fix the state’s roads. As stated before, the tax is estimated to make about $600 million a year by 2022. This is only about 60% of the $1 billion that the Transportation Department estimates that it would take to fully repair the roads and make them safer. With this said, it is doubtful that additional tax increases will occur that will make up for the other 40% of the needed funds.