South Carolina's 'Yankee Tax' would cost $500 for new residents who want to drive

As the pandemic shut everything down in 2020 and many moved to remote work, people realized that their high-priced urban homes weren’t affording them the quality of life they could get elsewhere. Thousands moved from California, New York, and other traditionally expensive areas to Texas and other states with lower taxes and cheaper housing stock. South Carolina has seen a significant influx of out-of-staters, leading the state’s legislature to take up legislation intended to make newcomers pay their fair share for infrastructure and other services.

If passed, the legislation would require new South Carolina residents to pay a $500 one-time fee to obtain a driver’s license and car registration. The state’s Senate Finance Committee approved the bill, leaving it to a vote on the Senate floor. It's worth noting that South Carolina increased gas taxes by $.02 in 2017, which already funds infrastructure maintenance, leading some to dub this legislation the “Yankee Tax” because it targets many people moving from blue states.

State senator Stephen Goldfinch said the charge would help ensure newcomers pay to use the infrastructure that existing residents’ tax dollars had already funded. He said the fee would be similar to the charges faced by construction companies when starting a new project. Developers often pay to offset their activities’ impact on local infrastructure and utilities.