Taxes of any kind can raise the ire of many people. Let’s take a look at the sales tax you pay on vehicles in South Carolina – there is a $300 cap. That’s right, whether you buy a $6000 used vehicle or a new luxury one costing $75,000 you’ll pay the same sales tax – $300.
The $300 cap doesn’t stop with automobiles. If you buy an expensive boat, or even an airplane the sales tax still caps at $300. The same is true for motor homes, jet skis and some other items as well. Owners of more expensive items will, however, pay more for owning them in the form of property taxes each year. I suppose that line of thought makes getting a break on sales tax for higher priced items more acceptable to some people.
Do the math. The bottom line is, the more money you spend for an item, the bigger break per dollar you get in sales tax savings. $6000 is .05. $100, 000 is .003. That’s a big difference.
Does this sales tax cap favor people who can afford more expensive items (or toys)? Is this tax cap another form of tax break for “the rich?”
There is the fact that these expensive items generate more in property taxes, funds that benefit each county. Should there come a monetary point where these items should be considered luxury items and charged more in sales tax? Should a $75,000 boat used purely for enjoyment be subject to no more tax than a $6000 used car someone needs to get to and from work? Should a line be drawn, and if so where? What do you think?