May 26, 2021

South Carolina Gov. Henry McMaster recently signed into law legislation relating to property taxes collected on certain aircraft in the state, and how those funds are used. As a result, more future revenue from aircraft property taxes will be used to bolster the state aviation fund and obtain or develop certain facilities.

The legislation requires that in fiscal 2021-22, the first $1,250,000 in revenue from the tax levied by the state on aircraft property taxes must be directed to the general fund. However, also in fiscal 2021-22, if the revenue from the tax levied by the state exceeds $1,250,000, the excess must be directed to the state aviation fund.

After fiscal 2021-22, the total revenues from the levied aircraft property tax must be credited to the state aviation fund.

“Signed into law by the governor, this legislation provides that property taxes from certain aircraft will now stay within the state aviation fund allowing for a more reliable funding stream for airport projects; benefiting South Carolina airports and our members who use them,” said Gregory Voos, CAM, NBAA Southeastern regional representative.

According to the bill’s fiscal impact statement, currently, the first $2,500,000 of the aircraft property tax revenue is placed into the general fund, and any additional revenue up to $5,000,000 is placed in the state aviation fund. In fiscal 2022-23 and thereafter, all funds will be credited to the state aviation fund, which “will result in an increase of at least $2,500,000 to the state aviation fund.”

To create the aircraft property tax revenue, Section 12-37-2410 of the South Carolina Code of Laws levies the tax on any “airline company” that operates “regularly scheduled” aircraft for hire to be used for interstate, intrastate or international transportation. Valuations are based on how much time the aircraft spent on the ground in South Carolina, and total mileage flown in the state.