Millions of dollars left unclaimed from S.C. gas tax refund

South Carolina drivers can now cash in on gas tax
South Carolina drivers can now cash in on gas tax
Updated: May. 28, 2021 at 6:59 PM EDT
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BEAUFORT COUNTY, S.C. (WTOC) - Travel is way up this holiday weekend and if you plan to drive in South Carolina, there may be a way you can save some money.

But few are taking advantage of it. South Carolina drivers are missing out on tens of millions of dollars in gas tax refunds.

In 2019 alone, South Carolina drivers left $35 million on the table. And the state estimates that number will go up.

In 2017, South Carolina lawmakers passed a controversial new gas tax. The state had one of the lowest in the country.

Here is how it works. The tax goes up by 2 cents every year; starting at 16 and ending at 28 in 2022. But there is more to it.

If drivers save their receipts, they can get refunded for the difference until the increases end.

The state estimated, most people would take advantage of the refund. But newly-obtained data shows that hasn’t happened.

In 2019, of the more than three million driving-age South Carolina residents, only 79,000 got a refund. The state paid back $3.4 million - an average refund of $43.

But the DOT took in $38.4 million in new taxes. That is a $35 million surplus.

“Going into this, being a new credit, we’re always anxious about how many people are actually going to take this,” South Carolina Revenue and Fiscal Affairs Office Executive Director Frank Rainwater.

Rainwater says they were afraid to underestimate.

“If we do a bad estimate, if we’re too low, the difference has to come out of the state’s general fund. Which means if we’re wrong with our estimate, other programs like education in this state could be affected,” he said.

To keep that from happening, the state pro-rated the refunds. Meaning those people who did get a refund, only got 78 percent of their money back.

One Lowcountry accountant says, even with a full refund, the process is too complicated.

“The amount of work it takes to get the credit is not worth applying for the credit,” said Jatin Patel, with Patel and Chester CPAs.

It’s a 2-step process to get the refund. People must save all their gas receipts and prove they’ve paid that much in maintenance fees. Think things like tire and oil changes.

“I think they just said, ‘Hey, here are the rules, if you want to use it, use it.’ But they know the average person is not going to use it,” Patel said.

Beaufort, Jasper and Hampton counties counted for 5 percent of the state’s gas tax revenue. But the DOT confirmed none of that new money went into those counties.

Instead, it went toward three projects across other parts of the state.

“It’s all going to go somewhere. But in this particular case, the unexpected extra money, if you will, from unclaimed tax credits goes toward improving our interstate program,” said Pete Poore, with South Carolina Department of Transportation.

If you’d like to claim your refund going forward, it’s not too late. South Carolina drivers have two more years to claim their credit. The refunds end after 2022.

Thirty percent of South Carolina’s gas revenue comes from out-of-state drivers. That is anyone from tourists to truckers.

For more information on the refund program and how to submit your receipts, please click here.

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