South Carolina vacation rental tax guide

With a bounty of popular destinations including Myrtle Beach, Hilton Head, and Charleston, the Palmetto State offers ample opportunity for short-term rental (STR) businesses.

But these opportunities come with tax obligations. Like hotel stays, STR stays in South Carolina are subject to lodging taxes. Failure to comply with state and local tax laws can result in fines and interest penalties. Tax jurisdictions are increasingly making STR tax compliance a priority, so it’s important to address compliance before tax authorities address it for you.

Avalara MyLodgeTax put together this guide to help you comply with South Carolina short-term rental tax laws at the state level. Local jurisdictions such as cities or counties may have their own lodging tax rules. For more information on the tax rates and jurisdictions that apply to your rental’s specific location, use our lodging tax lookup tool.

No lodging tax guide is a substitute for professional tax advice. Consider this an asset to help you understand and prioritize your lodging tax questions and concerns. Questions pertaining to specific situations or out-of-the-ordinary conditions are best solved with a certified tax professional familiar with South Carolina tax laws.

Lodging tax is calculated as a percentage of the cost of your guest’s stay and added to the price of the bill. The guest pays the tax, but the STR operator is responsible for collecting and paying it to the proper tax authority.

What’s the definition of “short-term rental” in South Carolina?

Sleeping accommodations that are rented to guests for less than 90 consecutive days are subject to South Carolina lodging taxes.

Who’s required to collect and file taxes on short-term rentals in South Carolina?

If you collect payment from short-term guests renting out an apartment, house, or other dwelling, you’re likely responsible for collecting, filing, and remitting lodging taxes to South Carolina tax authorities.

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

If you rent your property exclusively through a property management or online travel company (such as Airbnb or Vrbo) that reserves rooms and accepts payment for booking, you’re not responsible for collecting and remitting lodging taxes.

Location is key to compliance

The location of your rental is a crucial piece of information for lodging tax compliance. Your address determines which tax jurisdictions you’re required to report to, which taxes you need to collect, and your tax rates.

Use our lodging tax lookup tool to get a tax report specific to your South Carolina address. The report includes the estimated total tax rate to collect from guests, number of required registrations, number and frequency of returns per year, and minimum number of rented days to qualify as a taxable stay. It should be noted that tax rates and the rules governing them change frequently. Please consider your tax rate report to be informative rather than authoritative.

Local short-term rental regulations

STR operators in South Carolina should be aware of the local regulations that apply to them, including rules covering:

• Legality
• Permits, licenses, and registration
• Zoning
• Advertising
• Neighborhood notification
• Building and housing standards

Homeowner associations (HOAs), condominium communities, co-ops, and landlords may also have specific rules regarding vacation rentals. It’s your responsibility to be aware of STR policies that apply to your property.

Registering with state tax authorities

If you provide accommodations to guests for more than one week in any calendar quarter, you’re required to register with the South Carolina Department of Revenue. You can register online to receive a retail license.

You’re not required to register with the state or collect lodging taxes if you rent out a unit for less than 15 days during the taxable year and you use the dwelling unit as a residence (for personal purposes) 14 days or more during the taxable year, or If you rent your property exclusively through a property management or online travel company, such as Airbnb or Vrbo, that reserves rooms and accepts payments for booking.

Once you’re registered with tax authorities, you’re ready to start collecting lodging taxes, which you’ll add to your guest’s bill when they pay for their stay.

Which lodging taxes apply to South Carolina short-term rentals?

In South Carolina, STRs are subject to state and local sales tax and accommodations tax and may be subject to other local taxes.

Tax rates

Before you can begin collecting lodging taxes, you need to know the correct rate to charge to avoid compliance issues. Our lodging tax lookup tool can give you a rate report specific to your South Carolina address.

What charges are taxable?

All charges required for rental of accommodations are subject to South Carolina state lodging taxes, including cleaning fees and service fees.

Additional optional guest charges, including room service, laundering and dry cleaning services, in-room movies, telephone service, and rentals of meeting rooms, are subject to non-accommodations sales tax. Charges for amenities, entertainment, special items in promotional tourist packages, and other guest services, if optional and separately stated on the bill, are not subject to accommodations or sales tax. No-show fees are subject to accommodations tax, but cancellation fees are not.

What happens when my short-term rental marketplace (such as Airbnb or Vrbo) collects taxes for me?

If you rent your property exclusively through an STR marketplace, you’re not required to register with the state or collect state-administered lodging taxes.

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

In some cases, marketplaces also collect local lodging taxes for their listings. If taxes aren’t being collected for you, you’re responsible for collecting and remitting lodging taxes to tax authorities.

Are guests ever exempt from lodging taxes?

There are situations in which you aren’t required to collect lodging taxes in South Carolina. For example, a guest who rents for a long term rather than a short term is exempt from short-term lodging taxes.

Charges for accommodations directly paid for by foreign diplomats, federal government agencies, federal credit unions, charitable hospitals predominantly serving children, and the Red Cross are exempt from state lodging taxes.

Rentals of accommodations with six or fewer bedrooms that are on the same premises where the operator lives at the time the other rooms are rented are exempt from lodging taxes, as long as the operator doesn’t use a rental agency or online travel company to rent rooms.

After you’ve collected taxes from your guests, it’s time to file your tax returns with the South Carolina Department of Revenue. In South Carolina, you can file and pay tax online or via paper returns. The South Carolina Department of Revenue allows credit card payments, but may charge a fee.

When do I need to file my returns?

You'll be assigned a filing frequency and due dates when you register with the tax authority. For filing with the South Carolina Department of Revenue, due dates are as follows:

I didn’t rent my property during this filing period. Am I still required to file a lodging tax return with the South Carolina Department of Revenue?

Yes. STR operators registered with the South Carolina Department of Revenue are required to file returns each assigned filing period, regardless of whether you had any STR income or collected lodging taxes. Such returns are commonly known as “zero dollar returns.” Local tax authorities may have their own requirements.

Are there penalties for filing taxes late?

Whether you choose to offer STRs through a marketplace like Airbnb or Vrbo, or directly to guests, you open the door to tax liability at the state and local level. As tax revenue is a major source of local funding, tax authorities are becoming more aggressive in their efforts to identify individuals and businesses violating tax laws. Failure to register with tax authorities and file lodging tax returns in South Carolina on time may result in late fees, interest payments, and in extreme cases, legal action.

I’ve been offering short-term rentals without collecting lodging tax. What options do I have?

If you’re already operating an STR but not collecting lodging taxes, you may be in violation of South Carolina tax laws. Take the time to review your legal responsibility (with a tax professional, if necessary) and understand the risks.

STR operators in South Carolina may be able to take advantage of a voluntary disclosure agreement (VDA). A VDA offers an opportunity for operators to proactively disclose prior period tax liabilities in accordance with a binding agreement with the South Carolina Department of Revenue. VDAs are offered to encourage cooperation with state tax laws and may result in some or all penalty and interest payments being waived.

Are there options for outsourcing lodging tax filing?

Yes. Many STR operators in South Carolina file several state and local lodging tax returns every year. Filing solutions such as Avalara MyLodgeTax can relieve this burden.