South Carolina’s system for taxing motor vehicles is flawed, lacks transparency and places hurdles in front of residents who want to appeal their property tax bills.
Here are some changes the state and counties could potentially explore to improve the system.
Problem: The car-pricing data South Carolina buys every year is, by contract, hidden from public scrutiny. Some of the values used to create tax bills are substantially different from those available from other respected car-pricing services, and higher than actual prices paid for vehicles.
Solution: South Carolina could look at what other states do. Georgia spends less than half as much for car-pricing data from a national publisher, and puts all of that information online where anyone can review it. Other states, such as New Hampshire, base local taxes on auto manufacturer list prices, taking the guesswork out of car values, and then lower the tax each year rather than revaluing all the vehicles.
Problem: When the state incorrectly values a vehicle, it’s up to the owner to fix the problem by filing a county-level appeal. However, counties use different standards to determine what vehicles are worth, some have burdensome requirements such as obtaining a written appraisal, and some revert to using the state-provided pricing the following year even when an appeal succeeds.
Solution: Statewide standards for vehicle tax appeals could be developed so that taxpayers are treated fairly regardless of the county where they reside. A successful appeal that lowers a vehicle’s taxable value could become the starting point for future tax years. Reverting to higher values from the state’s price guide appears to conflict with state law, which requires assessments to drop each year.
Problem: Mistakes at the state and county levels have resulted in vehicles being improperly taxed. Tax bills that are too high can be challenged by vehicle owners, but when they are too low — such as the under-taxed luxury cars found in Charleston County — the mistakes can take years to correct.
Solution: Counties and the state Division of Motor Vehicles could improve safeguards in their computer programming to flag mistakes and catch them before they become costly. When a county’s own tax records show the owner of a $107,000 car receiving a tax bill for about $55, an error such as that should be easy to spot.