South Carolina Vehicle Fuel Credit

[n-monger]

Which box or boxes do I check to complete this? 

Box #1)   Check here if the above listed vehicle replaces a trade-in or totaled vehicle.

Box #2)   Check here if the above listed vehicle is registered in the name of a sole proprietorship or disregarded LLC.

This vehicle was purchased in 2013 with a trade in and I am also the sole proprietor of my business. Do these questions apply to me? And, if so, how should I answer? 

[AnnetteB6]

Based on the instructions for the SC Motor Fuel Income Tax Credit (Form I-385), a taxpayer may claim the credit for up to two vehicles.

The first checkbox asking whether the vehicle replaced one via trade-in or a totaled vehicle is to allow you to combine the data for two vehicles during the year, while only counting it as one.  So, in your case, since the trade-in was not in 2021 this would not apply to you.

The second checkbox is asking whether the vehicle is registered in the name of a sole proprietorship or disregarded entity.  Answer this one according to the registration of your vehicle.  If it is registered in the name of your company, then check the box.  You are still only allowed to claim up to two vehicles, but the registration not being in your name personally does not disqualify the vehicle for claiming the credit.

[n-monger]

OK...so I am getting conflicting information here... One Tax Expert tells me this..."Since the vehicle trade-in was not in 2021, this does not apply to you." The other Tax Expert tells me this..." Check the box because you purchased it through a trade in 2013." .... Which is the correct answer??? When I purchased this vehicle in 2013 it was not for business use ...only until 2015. Also, my name on the registered vehicle is my name not a sole proprietorship. How do I answer box 2 if it's in my name and not company name?

[AnnetteB6]

Here is a direct quote from the instructions for SC Form I-385:

Trade-in or total-loss vehicle: A taxpayer who trades in or totals an eligible vehicle (Vehicle A) and replaces it with another eligible vehicle (Vehicle B) can combine Vehicles A and B as one vehicle equivalent when computing the credit. Check the appropriate box to indicate that the vehicle replaced a trade-in or totaled vehicle. Enter the combined preventative maintenance costs and gallons purchased for Vehicles A and B in the Vehicle 1 column. If you have another qualifying vehicle, report it in the Vehicle 2 column.

In your case, you do not need to indicate that your vehicle is replacing a trade-in or totaled vehicle since you had the same vehicle all year in 2021.  It was not traded in 2021.  

With regard to the second check-box, here are the instructions:

Sole proprietorship or disregarded limited liability company (LLC): If a vehicle is registered in the name of a sole proprietorship, the individual owner can claim the vehicle as one of their qualifying vehicles for the credit. If a vehicle is registered in the name of a disregarded single-member LLC, the individual, partnership, or corporate owner can claim the vehicle as one of their qualifying vehicles for the credit. 3 The owner may still only claim two total vehicles for the credit. The sole proprietorship or single-member LLC should not file an I-385 claiming the credit.

Since your vehicle is registered in your name and not a company name, this check-box does not apply to you.

To learn more, here is a link to the actual SC I-385 form and instructions:  SC I-385

@n-monger