Politics & Government

Legislators to consider taxing SC drivers $60 more a year for gas

S.C. House budget writers will consider this week whether to tax Palmetto State drivers roughly $60 a year more for gas.

They also will decide whether to increase other driving-related fees.

The highest proposed fee is a one-time charge of up to $250 on vehicles bought out of state and registered in South Carolina. However, that is less than what S.C. drivers already are paying every year because of the state’s bad roads.

Columbia residents are losing $1,250 a year because of road damage to their vehicles due to bad roads, and lost time and wasted fuel spent on congested roads, according to the Road Information Program, a transportation research group.

S.C. lawmakers have not raised the state’s driving fees for more than three decades.

Last year, a filibuster in the state Senate and lobbying efforts by Koch Brothers-backed Americans for Prosperity helped kill a gas-tax hike.

But lawmakers are trying again this year, starting with a bill in the GOP-controlled S.C. House. That bill – which is backed by the Republican speaker, budget committee chairman and majority leader – has the support of the state’s largest business groups.

“The condition of South Carolina roads is costing South Carolinians, as well as South Carolina businesses, money,” said S.C. Chamber of Commerce president Ted Pitts.

Increasing other fees

Only Alaska has a lower gas tax than South Carolina’s 16.75-cents-a-gallon fee.

The proposed 10-cents-a-gallon hike would be phased-in over five years, increasing by two cents a year.

South Carolina taxes gas at the wholesale level, not the pump. So fuel companies will decide how much of the tax increase is passed on to consumers. However, they are expected to pass along the higher taxes.

If that happens, the higher tax would cost $60 a year for a driver who travels 15,000 miles annually in a vehicle that gets 25 miles per gallon. S.C. motorists who drive more would pay more; those who drive less would pay less.

On top of that, S.C. drivers would face an added:

▪  $16 fee every two years to register a vehicle

▪  $60 in fees every two years if they own a hybrid vehicle

▪  $120 in fees every two years if they own an electric vehicle

▪  Up to $200 in added sales taxes if they buy a used car that costs between $6,000 and $10,000

▪  A one-time fee of up to $250 if they buy a vehicle out of state and register it in South Carolina.

The higher taxes and fees are expected to raise $600 million a year. That money would go to pay to repair the state’s crumbling roads and bridges.

However, out-of-state drivers, including tourists, are expected to pay about $116 million of those higher taxes as they fuel up in the Palmetto State.

“Those are people from outside of South Carolina who are passing through our state,” said House Majority Leader Gary Simrill, R-York, adding out-of-state drivers will help “us maintain, preserve and expand our roadways.”

NC, Georgia taxes higher now

Even with a 10-cents-a-gallon hike, South Carolina’s gas taxes would remain no more than neighboring states.

North Carolina’s 34.3 cents-a-gallon gas tax is more than double South Carolina’s current tax.

A 10-cents-a-gallon tax hike would put South Carolina’s gas tax on a par with Georgia’s 26-cents tax.

Georgia increased its gas tax and driving fees in 2015. North Carolina law calls for its gas tax to continue increasing.

Those states now are spending more on road construction projects than South Carolina, creating more jobs, Simrill said. “Not only do we have bad roads, but we have fewer jobs.”

The borrowing proposal S.C. lawmakers approved last year to start repairing the state’s battered roads is expected to create some jobs in the Palmetto State. However, phasing-in added dollars from the higher gas tax to pay for road repairs would add still more jobs.

Business group backs House plan

S.C. businesses normally oppose tax hikes.

But not this time.

The S.C. Chamber of Commerce and some of its largest members are supporting the House road-funding plan.

In 2015, Sonoco, the Hartsville-based global packaging giant, estimated poor roads cost it up to $5 million a year in increased maintenance to its trucks as well as longer driving times, as drivers tried to avoid bad roads and bridges in the state.

Three years ago, the chairman of Greenville-based Michelin North America said S.C. roads are a “disgrace.”

Business pressure to get something done to fix the state’s roads also could reach into the Governor’s Mansion.

It is unknown where new Gov. Henry McMaster stands on the gas-tax issue.

If McMaster supports a hike, that could be used against him in the 2018 GOP primary.

McMaster has remained silent on whether he will sign off on a road-funding proposal.

His predecessor was an impediment to a road-funding bill.

Former Gov. Nikki Haley demanded an offsetting income tax cut. Critics said her plan would raid state government spending for other essential state needs, including public safety and education.

Cassie Cope: 803-771-8657, @cassielcope

Comparing SC with its neighbors

Some of the fee increases proposed in South Carolina already are in place in neighboring states.


Gas tax: 26 cents a gallon

Car title tax: 7 percent

Alternative fuel vehicles: $200 for personal vehicles every year, $300 for commercial vehicles every year

Hotel fee: $5 per night, for road funding

North Carolina

Gas tax: 34 cents a gallon

Car sales tax: 3 percent capped at $475

Alternative fuel vehicles: $130 annual fee for electric vehicles

Hotel fee: None

South Carolina (current)

Gas tax: 16.75 cents a gallon

Car sales tax: 5 percent, capped at $300

Alternative fuel vehicles: None

Hotel fee: None

South Carolina (proposed)

Gas tax: 26.75 cents a gallon

Car sales tax: 5 percent, capped at $500

Alternative fuel vehicles: $120 every two years on electric vehicles, $60 every two years on hybrid vehicles

Hotel fee: None