Taxes for SC boat owners set to drop. How long will it take to see the change?
A bill that would slash the taxes South Carolinians pay on their boats is now headed to Gov. Henry McMaster to be signed into law.
The proposal to cut the tax rate on recreational watercraft nearly in half and eliminate a separate tax on a boat’s outboard motor received final approval in a unanimous vote of the S.C. House of Representatives on Tuesday. The bill passed 111-0.
The measure approved this week gives the House’s approval to revisions made by the Senate earlier this month, where a 39-1 vote was nearly as lopsided. A previous version of the same bill had passed the House at the end of last year’s legislative session.
Once signed into law, the rate at which South Carolina taxes watercraft — which had been among the highest in the country — will drop from 10.5% to 6%. The measure also does away with a separate tax on outboard motors, something that boat owners had objected to as double taxation, since the sales price of a motorboat usually includes the attached motor.
“The South Carolina General Assembly has addressed a long-standing wrong,” Gettys Brannon, the president and CEO of the S.C. Boating and Fishing Alliance, told The State via text message. “Cutting the highest boat property taxes in the country, ending the double taxation of outboard engines through a one boat, one bill system, and saving South Carolina taxpayers more than $40 million.”
Local governments had expressed concerns about the potential loss of revenue from the tax changes, leaving less money for first responders, schools and public infrastructure and potentially leading to tax increases elsewhere. In negotiations with the S.C. Association of Counties, lawmakers settled on a three-year phase-in of the changes to give local governments more time to prepare for the changes.
State Sen. Brad Hutto, D-Orangeburg, proposed a state-guaranteed “backstop” for any lost revenue on the local government side, but that commitment was voted down in the final version of the bill.
Supporters of the bill argued the tax cut could lead to more boats being sold and registered in the state — including boats whose owners had moved them to lower-tax jurisdictions — and serve as a boost to the state’s multi-billion dollar boat construction industry.
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