State of the state: South Carolina short-term rental rules

In this series of blog posts, we offer an overview of the short-term rental lodging tax obligations for certain states, along with the latest rules on short-term rental operations.

South Carolina offers a variety of prime vacation spots, from the historic sites of Charleston to the family-friendly fun of Myrtle Beach. Not surprisingly, it’s also a popular spot for short-term rentals. State laws on vacation rentals mainly address tax issues, but local governments have passed ordinances to regulate short-term rentals when it comes to registration, zoning, and more.

Vacation rental lodging taxes

For tax purposes, short-term rentals in South Carolina are defined as reservations of less than 90 continuous days. South Carolina short-term rentals are subject to state sales tax, state accommodations tax, and local tax.

You’re not required to collect state accommodations tax if you rent out a unit for less than 15 days during the taxable year. You’re also not liable for state accommodations taxes if you rent out six bedrooms or less in a home that you own and in which you live, provided you don’t use a short-term rental marketplace for guest transactions.

Local governments may have their own rules for local taxes on short-term rentals.

Tax registration and filing

Before you can begin collecting state taxes on your short-term rental in South Carolina, you’re required to register with the South Carolina Department of Revenue for a retail license.

If you provide short-term accommodations for less than one week in any calendar quarter, you don’t need to register for a retail  license with the South Carolina Department of Revenue, but you still need to collect and pay lodging tax.

Tax collection by short-term rental marketplaces

If you rent your property exclusively through a short-term rental marketplace such as Airbnb or Vrbo, you’re not required to register with the state or collect state short-term rental taxes. 

However, if you have an active retail license, you must file state lodging tax returns for each filing period. For any filing periods when all of your rentals were through a marketplace, you’ll need to file a zero return.

If taxes aren’t being collected for you, such as for local taxes not administered by the state, you’re responsible for collecting and remitting lodging taxes to tax authorities.

Local vacation rental laws

Charleston passed its short-term rental law in 2018, ending a ban on vacation rentals, but putting strict regulations in place. Under these rules, only certain types of buildings can be rented out for short terms, depending on their location and age. These restrictions were designed to protect historic neighborhoods that are already heavily touristed, and to prevent property owners from building new properties specifically for short-term rentals.

Under the rules, all short-term operators must:

•  Apply for a short-term rental license from the city
• Own and live on the property full time and stay overnight in the home when guests are present
• Include the short-term rental license number on any advertisements
• Have at least one off-street parking space
• Not host more than four adults at a time
• Collect accommodations taxes

While Airbnb and Vrbo collect state-administered taxes for short-term rental operators in Charleston, they do not collect accommodations tax for Charleston County or the City of Charleston, which means hosts are responsible for collecting and remitting these taxes to local authorities.

Many other local governments in South Carolina cities have their own short-term rental regulations, including Beaufort, Greenville, Hilton Head, Myrtle Beach, and more.

Get help with South Carolina vacation rental taxes

Avalara MyLodgeTax can help vacation rental hosts automate and simplify lodging tax compliance on the local and state level, including tax registration and filing. For more on vacation rental lodging taxes in South Carolina, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.