Boating enthusiasts across the Palmetto State are nearing a significant legislative victory as a bill designed to slash boat property taxes moves toward a final vote in the state Senate. House Bill 3858, which aims to address what advocates call the highest boat taxes in the country, advanced through the Senate Finance property tax subcommittee last week and is scheduled for a full committee hearing on Tuesday, Feb. 17.
The proposed legislation seeks to provide a 50% exemption on the fair market value of watercraft. Furthermore, it would lower the effective assessment ratio on boats from the current 10.5% to approximately 6%, bringing South Carolina’s rates more in line with neighboring states like Georgia and North Carolina.
In addition to tax relief, the bill introduces several administrative reforms intended to simplify boat ownership. One of the most significant changes would be the elimination of the requirement to title outboard motors separately from the boats themselves.
Currently, South Carolina is one of only a handful of states that requires distinct titles for motors, a process that often leads to double taxation and increased paperwork. Under the new plan, auditors would be allowed to combine a boat and its outboard motor onto a single property tax notice, reducing the administrative burden on both owners and county offices.
Leadership from the South Carolina Boating and Fishing Alliance has long argued that the state’s current tax structure encourages owners of high-end vessels to register their boats in other states. By cutting costs, proponents believe South Carolina can retain more registrations locally, supporting the state’s $6.5 billion marine industry and the thousands of jobs it provides.
While the South Carolina Association of Counties has expressed concern over potential revenue losses for local governments—estimated at approximately $60 million statewide—bill supporters emphasize that the current system punishes middle-class families who own modest fishing boats and pontoons.
Because the bill has already passed the House with strong bipartisan support, a successful Senate vote would put the legislation on a clear path to the Governor’s desk. If signed into law, the new tax exemptions are expected to take effect for the 2027 tax year.
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