South Carolina Wants a $500 'Yankee Tax' to Register an Out-of-State Car

Moving to a new state can be a time of new opportunities. New jobs, new surroundings, new life. It may be tough at first, but for the most part, if you have no loose ends to tie up or if you’re trying to start over, it can be painless. But what if you were taxed by the new state you’re moving to for simply being a new resident? That’s what South Carolina lawmakers are proposing as AP News reports the state is considering charging new residents a “Yankee Tax”.

The bill is authored by state senator Stephen Goldfinch (R). It passed the senate finance committee where it’ll go to the house floor for a vote. If passed there, new residents would face a one-time fee of $500. This fee would have to be paid in order for these new residents to get a state driver’s license and register their vehicle. Essentially, people are paying $250 for a license and $250 for their registration. And that’s in addition to the regular fees for a driver’s license and vehicle registration.

Rather than pay these fees directly to some department, new residents would pay the fee through their property tax, then take the receipt showing that the tax was paid to their local DMV for their license and registration. The money from the taxes would then be used for infrastructure, greenspace conservation, and public education. Or so they say.

Senator Goldfinch claims the tax is a way for the state to capitalize on the population boom South Carolina has had over the last few years. He argues it’s only fair new residents pay for things like infrastructure that existing residents have already been paying for. “We think that people should have to pay their fair share when they show up,” he said to AP. Goldfinch also doesn’t think the tax would deter new residents from moving to the state, saying they’ll still be wooed to come by South Carolina’s low property taxes.

There’s pushback to the bill, however. Democratic Sen. John Scott said new residents already pay their share when moving to the state through other ways like a state gas tax, which increases by two cents every six years.

The irony in all this is that while it’s being called a “Yankee Tax” — which would imply that it would affect residents moving to the state from the north — the bill will mainly affect other southerners. South Carolina’s population boom has been driven primarily by migration from surrounding states, specifically North Carolina and Georgia. Data from the U.S. Census Bureau shows that in 2019, for instance, of the 129,000 people that moved to the state that year, the majority were residents from North Carolina and Georgia.