When will SC boat owners get tax relief? Here’s what we know.
Last year, boat owners across South Carolina saw the prospect of tax reform on their prized watercraft pass the S.C. House of Representatives, but then had to wait until the start of the annual legislative session this month to see if the measure would move through the state Senate.
A proposal that would cut South Carolina’s boat tax nearly in half – and also do away with what critics have charged is double taxation of a boat’s outboard motor – is now sitting in the Senate Finance Committee after the plan overwhelmingly passed the House on the next-to-last day of the 2025 session.
That margin, and the easing of concerns among the state’s counties that the bill would negatively affect local tax revenue, leave supporters encouraged that the measure could quickly be passed into law this year.
“I have full confidence they will pick it up and run with it,” said Gettys Brannon, president and CEO of the S.C. Boating and Fishing Alliance, which is pushing for a tax overhaul. He pointed to the 89-7 vote in favor in the House last year and the support of Gov. Henry McMaster as indicators some kind of tax change is likely to pass.
“I don’t have much indication it’s not going to move, and so it’s really about competing priorities,” Brannon said, especially since lawmakers only returned to the capitol for the 2026 session two weeks ago. “Everybody’s got something they want to do.”
Sen. Stephen Goldfinch, R-Horry, serves on the finance committee and previously introduced a companion bill in the Senate. He thinks his colleagues are likely to vote on the measure before the end of the session, although he predicts DUI reform will likely be the first priority the Senate takes up.
“We’re getting dozens of emails organically,” Goldfinch said of the boat tax bill. “There are some inorganic movements out there, but this is really an organic movement. People are finding out we have the highest (boat) taxes in the nation, we’re the biggest boat-building state in the nation, we’re one with the most participation in water sports, and it makes a lot of people mad.”
South Carolina currently taxes boats at 10.5%, about three times what a boat owner could expect to pay just over the border in North Carolina or Georgia. It’s also one of the few to tax a boat’s motor separately from the boat itself, something critics say leads to the motor being taxed twice after a boat is taxed at its sales price – with the motor included.
Brannon said the boating alliance’s Facebook posts about the legislation has garnered thousands of views as the legislative session starts back up this month, showing there’s public interest in the bill.
“The first issue I heard about at a boat show in Charleston last weekend was, ‘When are the taxes going to be fixed?’ or ‘I’m not going to buy a boat until boat taxes are fixed,’” he said.
Under the bill now in the Senate, the tax burden on boat owners would drop to 6% over the course of a three-year phase-in period. It would also eliminate the separate tax on the boat’s motor.
The phase-in requirement was key to getting the supporting of the S.C. Association of Counties, the organization that represents the interests of South Carolina’s 46 county governments. Local leaders had warned they could lose up to $59 million in revenue under the previous version of the bill, which would have implemented a steeper cut more quickly. That could have forced counties to raise taxes on automobiles, commercial property, rental property and small businesses to make up the difference, the Association of Counties warned.
A three-year implementation period will allow local government more time to adapt to the change, and the Association of Counties is now supportive of the compromised bill that passed the House, communications director Mary-Kathryn Craft said in an email.
“We are supportive of efforts to help counties weather the potential financial impact while lowering the tax burden on boat owners in an equitable manner,” Craft said.
Goldfinch said lowering the tax could actually lead to more boats being registered in South Carolina.
“It’s not the uber-wealthy who are hurt, because they don’t pay the taxes. You can just move it to Florida and you’re done,” he said. “It’s the guy with a small johnboat going fishing who has to pay for it... That guy doesn’t have a tax lawyer, or the inclination or the time to open an LLC in Delaware. He’s just not going to buy a boat period.
“Our policy should be to promote outdoor sports,” Goldfinch said, “and the tax policy doesn’t allow for it.”
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