SC boat owners claiming double taxation will have to wait for relief
Boat owners are halfway to getting relief on their taxes after the S.C. House of Representatives took action on the last week of the 2025 session.
Lawmakers approved a change to how South Carolina calculates taxes on motorboats on May 7, part of a push to both cut taxes on recreational watercraft and also remove what critics have called double taxation of boat motors.
But the version of the bill that passed the House also made changes that will ease the impact on local government revenue, after some county leaders warned the change could mean they lose out on millions in tax dollars. The S.C. Association of Counties had warned that lost revenue would have to be made up from taxpayers who don’t own their own boat. The group didn’t immediately respond to a request for comment after the bill passed the House.
“Originally, we were going to do a 50% tax cut and combine the motor title,” said Rep. Gary Brewer, R-Charleston, who co-sponsored the bill. “Now, we will still combine the title, and cut the tax by 42% and some change to get it equal to what cars are taxed at.”
South Carolina currently has some of the highest boat taxes in the nation, at 10.5%. That’s about three times what a boat owner could expect to pay just over the border in North Carolina or Georgia. The Palmetto State is also one of the few states to apply a separate property tax to a boat’s outboard motor. Critics charge that has led to several apparent cases of double taxation in county tax records, where the assessed value of a boat seems to include the value of the motor that came attached to it.
The bill that passed the House will eliminate the separate motor tax and tax the boat and motor as one piece of property going forward, at a rate of 6%.
But to cushion the blow on counties — the Association of Counties had estimated local governments could lose out on $59 million because of the change — the tax cut is set to take effect over a three-year time period. The group that represents South Carolina’s 46 counties had pushed for any change to align with counties’ reassessment periods, when local governments routinely re-evaluate tax rates because of rising property values.
Otherwise, a sudden loss of funding would have forced counties to raise taxes on automobiles, commercial property, rental property and small businesses in order to maintain public services.
“We worked with everybody to get this passed,” Brewer said. “The three-year phase-in was what they really wanted to let their counties absorb it, so that growth would allow them to take in more, and some of the bigger counties will take in a lot more.”
The bill next moves to the S.C. Senate, but won’t see any action until the Legislature comes back into session next January. Given that the legislation ultimately passed the House by a vote of 89-7, Gettys Brannon, president and CEO of the S.C. Boating and Fishing Alliance, hopes that senators will quickly pass the bill next year.
“This will bring relief for over 300,000 taxpayers, possibly more because of the number that register them in other states,” Brannon said.
The boating group estimates that many larger boats that have been registered out of state will come back to South Carolina when the tax cut goes into effect. They say counties that preemptively reduced the taxes have already seen a rise in boat registration.
Brannon encourages boat owners to keep in touch with their lawmakers over the summer, crediting public pressure with getting the bill to advance by such a wide margin.
“For current boat owners and new boat owners that might decide to bring boats back, it’s obviously something to keep the grassroots motivated,” he said.
Not all local leaders are opposed to a boat tax cut. Columbia Mayor Daniel Rickenmann signed on to a letter supporting the bill, alongside Charleston Mayor William Cogswell, Summerville Mayor Russ Touchberry and county council members from Allendale, Berkeley, Kershaw and York counties.
“Nearly 78% of higher-end boats have been registered out of state to escape this punitive tax structure taking with them not just tourism and economic activity, but also a sense of pride in our state’s waterways,” the letter reads. “In most counties and municipalities, boat property taxes account for less than 1% of total revenue.
“Suggesting this bill poses a budgetary crisis is disingenuous. With naturally growing tax bases and the ability to budget responsibly, local governments can absorb this modest reduction without sacrificing core services.”
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