Avalara MyLodgeTax > Blog > State and Local News > STR hosts must get permits under new law in Columbia, South Carolina

STR hosts must get permits under new law in Columbia, South Carolina

  • May 23, 2023 | Jennifer Sokolowsky

After a year of debate, Columbia, South Carolina, has passed an ordinance regulating short-term rentals (STRs), which are defined as rentals of 30 days or less. The new rules, designed to balance the interest of long-term residents and the local STR industry, went into effect May 4.

Under the new ordinance, operators will need a permit from the city to list or rent out short-term rentals. The nonrefundable application fee costs $50, while permit fees are set at $100 for owner-occupied properties and $250 for properties in which the owner does not live. Hosts must have a separate permit for each property they rent out. Operators in business before the law passed on April 4 have until July 1 to apply for their permits.

In addition to the STR permit, short-term rental operators must also get a business license.

Other rules for short-term rentals include:

  • Vacation rentals must meet building and fire codes and pass a safety inspection if needed
  • Owners or a designated representative must live within 45 miles of the city so that they can respond quickly to any issues
  • Properties are required to provide at least two parking spaces

The new regulations include enforcement measures for hosts who break the rules. The city will use a point system for violations of local or state laws, which can be punished by fines or STR permit revocation. The city’s Code Enforcement Division, which has received funding for several new staff positions, will enforce the short-term rental rules. Columbia may also use short-term rental software to aid in enforcement, as many cities around the country do already.

As of March 21, around 880 short-term rental properties were in operation in Columbia, according to market research site AirDNA. The number of short-term rentals in the city increased nearly 45% from the end of 2021 to the end of 2022. In South Carolina overall, the number of short-term rentals has grown 17% since 2018.

Columbia is not alone among South Carolina communities in regulating short-term rentals. In fact, among the state’s 10 largest cities, the capital was the seventh to get an STR law on the books. 

Some ordinances are much stricter than in Columbia. In Charleston, which passed its STR law in 2018, all short-term rental operators must live in their properties and be present for guests’ stays. Charleston restricts what types of buildings can be rented out for short terms in different zones of the city.

South Carolina STRs are also subject to state and local sales and lodging taxes, which are administered by the state. Short-term rental hosts are required to register with state tax authorities, collect lodging taxes from guests, and remit the tax.

A few exceptions apply:

  • You’re not required to collect accommodations tax if you rent out a unit for less than 15 days during the taxable year, or if you rent out six bedrooms or less in a home you own and in which you live, provided you don’t use a short-term rental marketplace for guest transactions.
  • If you provide short-term accommodations for less than one week in any calendar quarter, you don’t need to register with the state, but you still need to collect and pay lodging tax. 
  • If you rent your property exclusively through a short-term rental marketplace such as Airbnb or Vrbo that reserves rooms and accepts payments for booking, you’re not required to register with the state or collect short-term rental taxes.

If taxes aren’t being collected for you, such as when guests book directly with you rather than through a marketplace, you’re responsible for collecting and remitting lodging taxes.

Avalara MyLodgeTax can help vacation rental hosts automate and simplify lodging tax compliance. 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.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.
Avalara logo featuring a globe surrounded by colorful lines and swirls

Learn more about SC lodging tax rules