South Carolina Gas Tax: Rates, Refunds, and EV Fees

The South Carolina gas tax is 28 cents per gallon on gasoline, diesel, and alternative fuels, a rate that has held steady since July 1, 2022. The federal government adds another 18.4 cents per gallon, bringing the combined tax on a gallon of fuel in the state to roughly 46.4 cents before the retail price of the fuel itself. The state’s share is deposited into a dedicated trust fund for road and bridge work rather than the general budget.¹

How the 28-Cent Rate Was Set

South Carolina Code Section 12-28-310 sets a base user fee of 16 cents per gallon. That base sat alone for years until the South Carolina Infrastructure and Economic Development Reform Act (Act 40 of 2017) added a two-cent increase every July 1 for six years running. The final bump landed on July 1, 2022, bringing the total increase to 12 cents and the running rate to 28 cents.¹

The rate applies equally to gasoline, diesel, and alternative fuels such as liquefied petroleum gas and compressed natural gas, with alternative fuels converted using energy equivalents so no fuel type escapes the fee. You pay it at the pump, folded into the posted price rather than listed as a separate line item on your receipt. The statute preempts cities and counties from adding their own fuel excise taxes on top of the state rate.¹

The federal 18.4-cent rate has not changed since 1993 and is not indexed to inflation, so the state portion now accounts for more than 60 percent of the total fuel tax paid at a South Carolina pump.

Where the Money Goes

All revenue from the 12-cent increase (everything above the original 16-cent base) flows into the Infrastructure Maintenance Trust Fund. By law, that fund can only be spent on repairs, maintenance, and improvements to the state’s existing transportation system; it cannot be diverted to unrelated spending.²

Most of it goes to resurfacing. Act 40 directs the Department of Transportation to distribute resurfacing funds on a needs basis, so counties with the worst pavement get priority. A separate allocation of at least $50 million per year is set aside for bridge replacement and rehabilitation, and anything above that goes toward expanding existing interstates. The Comptroller General’s office publishes independent tracking of how the money is spent.²³

Not every cent stays at the state level. Out of the 28 cents per gallon, 3.99 cents is distributed directly to the state’s 46 counties through the “C” Program, using a formula that weighs population, land area, and rural road mileage. Counties must spend at least 25 percent of their C Fund allocation on the state highway system.⁴

Road Use Fees for Electric and Hybrid Vehicles

Drivers of electric and plug-in hybrid vehicles buy little or no gasoline, so the per-gallon fee reaches them lightly if at all. South Carolina fills that gap with a flat biennial road use fee collected at registration.

All-electric, hydrogen, or other non-motor-fuel vehicles: $120 every two years.
Plug-in hybrids powered by a combination of motor fuel and electricity or hydrogen: $60 every two years.

The Department of Motor Vehicles collects the fee at titling or registration, and the money goes to the same Infrastructure Maintenance Trust Fund.⁵ The $120 biennial fee works out to $60 per year. A gas car getting 25 miles per gallon and driving 12,000 miles annually pays about $134 a year in state fuel tax, so the EV fee recovers less than half of what a comparable gas vehicle contributes.

Refunds for Off-Highway Fuel

Because the user fee is meant to fund roads, fuel burned in equipment that never touches a public highway qualifies for a refund. Two situations are covered.

Farm gasoline refunds are claimed on Form L-304. Farmers who use gasoline in tractors, irrigation pumps, and other farm equipment file the form with a copy of their SCATE card and original purchase invoices.

Non-highway diesel refunds are claimed on Form L-325. Anyone using diesel in off-road equipment that has its own fuel supply tank, such as construction machinery and generators, can claim a refund by submitting original purchase receipts.

Both refund types are filed through the SCDOR’s MyDORWAY portal. You register for a Motor Fuel Refund account using a Federal Employer Identification Number. Claims must be filed within three years of the purchase date, with no extensions, and you should keep the original invoices for at least three years because the SCDOR can audit within that window.⁶

The Motor Fuel Income Tax Credit Has Expired

When the legislature raised the gas tax in 2017, it paired the increase with a refundable individual income tax credit that let residents recover part of the added cost. That credit (claimed on Form I-385) was only authorized through tax year 2022. For 2023 and later, it is unavailable unless the General Assembly reauthorizes it, which has not happened as of 2026.⁷

If you are amending a return for 2022 or an earlier year, the credit equaled the lesser of your Act 40 fuel tax increase (the incremental cents multiplied by South Carolina gallons purchased) or your preventative maintenance spending on the vehicle for the year. Qualifying maintenance included new tires, oil changes, and similar upkeep performed in South Carolina; registration fees, insurance, property tax, loan interest, and body work did not qualify. Each taxpayer could claim the credit for a maximum of two vehicles.⁸²

Dyed Diesel on the Highway

Diesel sold for off-road use (farming, construction, generators) is dyed red to signal that no user fee was collected. It is illegal to operate any motor vehicle on a public highway in South Carolina with dyed fuel in the tank. Penalties scale with intent.

Negligent violation: $500 civil penalty.
Knowing violation: a misdemeanor carrying up to a $10,000 fine, up to three years in prison, or both.

Two narrow exceptions apply. Drivers who fueled up in another state that permits that type of dyed fuel on highways are not penalized, and government vehicles and buses that qualify for an exemption under the Internal Revenue Code are excluded. Fines collected go into the Department of Transportation’s State Non-Federal Aid Highway Fund.⁹

The rest of the state’s motor fuel enforcement scheme (import licensing, shipping paper requirements, supplier penalties for export sales) targets the commercial supply chain rather than individual motorists. For most drivers, the dyed diesel rule is the only enforcement provision that could reach them personally.¹⁰

1
South Carolina Legislature. South Carolina Code Title 12 Chapter 28 – Motor Fuels Subject to User Fees
2
South Carolina Legislature. 2017-2018 Bill 3516 – SC Infrastructure and Economic Development Reform Act
3
South Carolina Comptroller General. New Taxes and Fees for Road Maintenance
4
South Carolina Department of Transportation. SCDOT C Program
5
South Carolina Legislature. South Carolina Code Title 56 Chapter 3 – Section 56-3-645
6
South Carolina Department of Revenue. Motor Fuel Refunds and Exemptions
7
South Carolina Department of Revenue. SC Information Letter 17-6 – Motor Fuel Income Tax Credit
8
South Carolina Department of Revenue. 2022 Motor Fuel Income Tax Credit – Form I-385
9
South Carolina Legislature. South Carolina Code 12-28-1555 – Use of Dyed Fuel Prohibited, Exceptions, Penalties
10
South Carolina Legislature. South Carolina Code 12-28-1730 – Penalties