Hilton Head Island adds new short-term rental rules

Short-term rental (STR) operators in Hilton Head Island, South Carolina, must include their property’s STR permit number in all advertisements and comply with other new rules established by a law passed by the Town Council. Under the amendments to the island’s STR ordinance:

• STR permit applications must be in a person’s name rather than a corporate entity.
• STRs within HOAs must provide a letter stating that the property is allowed to operate as an STR.
• Bedrooms must be primarily for sleeping and meet building and safety codes.
• A maximum of six vehicles are allowed to park in STR driveways.

STRs must also have a 60-minute shutoff valve for external propane grills and propane detection alarms when applicable. Properties of 3,600 square feet or more must also have approved fire safety systems and meet smoke detection requirements.

The new rules go into effect May 1, 2026.

The island’s original STR law, which went into effect in 2023, applies to privately owned residential property rented for a period of less than 30 days.

Operators must obtain a permit from the town and follow other operational requirements. They must be available by telephone 24 hours a day, seven days a week, and respond to complaints on-site within an hour. Operators must also follow parking, sanitation, noise, and safety rules.

Earlier this year, Hilton Head approved new fines for violations of the town’s STR rules. Previously, the town could only issue criminal citations for code violations. The town escalates penalties for repeat violations, with a fine of $250 for a first offense, $500 for a second offense, and $1,000 for all subsequent offenses.

The fine schedule resets after a 12-month period with no violations, and a $25 late fee applies to unpaid fines after 30 days. Operators must pay all outstanding fines before renewing their operating permits. Properties that accumulate three or more citations within a 12-month period can have their license revoked.

STR operators on Hilton Head Island are required to collect lodging taxes from their guests.

On rentals of less than 90 days, operators are responsible for collecting the town’s Accommodations Tax and Beach Preservation Fee, which funds tourism-related infrastructure and services as well as beach renourishment and facilities. Operators are required to open an account with the town’s Revenue Services Office and file lodging tax returns quarterly. On Hilton Head, Airbnb collects the local tax automatically when guests pay for its listings, but Vrbo doesn’t collect the local tax on its listings.

South Carolina STRs are also subject to state and local sales and lodging taxes, which are administered by the state. Operators 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 use the dwelling unit as a residence (for personal purposes) 14 days or more during the taxable year.
• You’re not required to collect lodging 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 an STR 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. Both Airbnb and Vrbo collect state-administered lodging taxes for their listings.

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.