The state Senate passed a tax break for South Carolina boaters last week. An updated analysis shows the impact to county coffers may be less than initially estimated when senators signed off on the measure. (Photo illustration by Getty images)
COLUMBIA — An updated analysis to legislation that reduces property taxes on boats registered in South Carolina shows counties would take less of a hit than predicted when the Senate approved it last week.
The update shows counties stand to lose $39.7 million in revenue collectively once the break is fully phased in over three years. That’s down from $51.4 million senators thought counties would lose in 2029, as the SC Daily Gazette reported.
Currently, boat owners must separately title and pay taxes annually on their boat and each outboard motor at a rate that is the highest in the country, according to advocates. The bill simplifies matters by creating a single tax bill for the boat and motor and knocking the effective rate down to 6% from the 10.5% rate under state law.
When the Senate passed the bill 39-1 last Wednesday, the debate involved estimates completed a day earlier by the state Revenue and Fiscal Affairs Office.
The agency updated those estimates Thursday after receiving additional information from the state Department of Revenue on boats’ property values.
Tax breaks for South Carolina boat owners sail through the state Senate
It still shows Lexington County is expected to see the biggest hit of any county, though the cut’s predicted to be $6.1 million in 2029, rather than $9 million.
The update also shows that Charleston County boaters would benefit from the bill — saving $5.5 million by 2029. Five counties (not six) have already reduced rates on their own, so the proposal wouldn’t change their revenue collections: Beaufort, Dorchester, Florence, Hampton and Horry counties.
Property taxes are collected by counties, not the state, to fund local services and public schools.
So, the bill won’t affect the state’s general fund. But it would send the state Department of Natural Resources about $4.1 million more annually, starting July 1, that agency predicts.
That’s because boat owners would pay a $10 fee annually to register their motors, rather than a one-time fee when the motor is titled.
The Senate voted Thursday to send the bill back to the House, which passed a different version 89-7 last year.
If the House agrees with Senate changes, the measure will move on to the governor’s desk.
Courtesy of South Carolina Daily Gazette
