South Carolina House passes 10-cent fuel tax increase, new truck fee

By Keith Goble, Land Line state legislative editor | 3/2/2017

A bill halfway through the South Carolina statehouse would increase the state’s fuel tax rate by 10 cents.

Officials have said something needs to be done to help the state address the estimated $1 billion annually the state Department of Transportation says is necessary to cover infrastructure needs.

House lawmakers in the Republican-led chamber voted 97-18 to send a bill to the Senate that would address the transportation revenue shortfall largely via a dime increase to the state’s 16.75-cent-per-gallon fuel tax. The tax rate has remained unchanged for 30 years.

The tax rate would be increased two cents each year for five years until it reaches 26.75 cents. The fuel fee increase is estimated to raise $68.8 million in the first year. Once fully implemented the tax increase is estimated to raise $401 million annually.

Other revenue enhancers include raising the sales tax limit on most vehicles from $300 to $500. People moving into the state would pay a new title fee of $250, and a new fee would be collected for hybrid and electric vehicles.

Specific to trucking, a road use fee collected at the same time as the registration fee would be added for truck drivers in exchange for exempting them from the ad valorem property tax. The fee would also be applied to out-of-state carriers, who are not required to pay the ad valorem.

The truck fee would be implemented on Jan. 1, 2019.

Rep. Gary Simrill, R-York, said during House floor discussion the fees on out-of-state drivers would allow the state “to capture as much revenue as we can from outside of South Carolina.”

Once fully implemented, all revenue enhancers in the Republican-led bill would raise an estimated $600 million annually – nearly half a billion dollars short of what the state DOT says is needed to repair and maintain roadways.

Half of the new revenue would be used to improve existing highway lanes throughout the state. Another $200 million would be used to widen interstates and begin a freight-mobility program.

Simrill said the state cannot wait any longer to act.

“For every year that we don’t do something, it costs us another $380 million in further degradation of the highways.”

H3516 awaits assignment to committee in the Senate. If approved in the GOP-controlled Senate the bill would move to the governor’s desk. Republican Gov. Henry McMaster has said he views a fuel tax increase as a “last resort.”

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