SC RESIDENT TAXPAYERS

To offset the motor fuel user fee increase paid, Code Section 12-6-3780 was enacted to allow a resident taxpayer a refundable motor fuel income tax credit for up to two private passenger motor vehicles or motorcycles registered in South Carolina during the year, subject to certain limitations. 

I have outlined some of the main facts about the credit.  Please refer to the SC Revenue Ruling #17-6 for more detailed information.  This can be found on the S. C. Department of Revenue website:  dor.sc.gov.

1)   Credit available for tax years 2018 – 2022;

2)   Available for two private passenger vehicles or motorcycles per taxpayer;

3)   Expenses used for credit:  actual user fee increase on fuel or maintenance on vehicle (i.e. tires, oil changes and regular maintenance on vehicle);

4)   Credit is refundable even if no taxes are owed or taxpayer is not required to file a South Carolina tax return;

5)   Taxpayer is individual, partnership, corporation, estate, non-profit organization, S-corporation that are SC residents;

6)   If filing married filing jointly, both taxpayers are eligible for the credit on up to two vehicles each but not the same vehicles.  The vehicle has to be registered in the taxpayer’s name.

7)   Vehicles Not Qualified for Credit:  trucks having an empty weight over 9,000 lbs. and a gross weight over 11,000 lbs., travel trailer, boat, golf cart, tractor or all-terrain vehicles.

8)   Types of motor fuels that qualify for credit:  gas, gasohol, diesel and alternative fuels used in private passenger vehicles by a resident of SC and purchased in SC;

9)   Motor fuel user fee to calculate credit:  2018 – 3 cents, 2019 – 5 cents,  2020 – 7 cents, 2021 – 9 cents and 2022 – 11 cents.  The user fee is calculated on per gallon basis.

10) Form I-385 is used to claim credit on SC resident tax return.  Credit is figured separately for each vehicle.  If married filing jointly, the taxpayer and spouse would use separate I-385’s.

11) Partnerships, corporations, S-corporations, etc… would claim credit on the business return to reduce any taxes, license fees, etc…  and any remaining credit would be refunded to the business entity.

12) Non-residents do not qualify for credit.

13) Part-year residents can claim credit for fuel purchased in SC for the vehicle registered in SC while a resident of SC.

14) Fuel purchased or preventive maintenance paid for outside of SC can not be used for credit.

15) Substantiated expenses:  Gas receipts and paid maintenance invoices.  Fuel receipts or credit card statements must show number of gallons purchased.  Maintenance invoices must show the car model, amount and type of work performed in SC.

16)  The maximum dollar amount of total credit that may not be exceeded for all taxpayers:  2018 - $40 million,  2019 - $65 million,  2020 - $85 million,  2021 - $110 million,  2020 - $114 million.