South Carolina Sales Tax on Hurricane Rental Insurance
- Nov 3, 2014 | Gail Cole
Hurricanes happen, and when they do, they sometimes impact vacation plans. Because of that, many vacation rentals in coastal South Carolina offer hurricane rental insurance.
Putting all else aside (property damage, inconvenience, injury, even death), let’s consider the sales tax implications of hurricane rental insurance. A taxpayer asked the South Carolina Department of Revenue the following questions:
- Is an optional charge for hurricane rental insurance… subject to the sales tax?
- Is a mandatory charge for hurricane rental insurance… subject to the sales tax?
The department concluded the following:
- An optional charge for hurricane rental insurance is not subject to sales tax. As an optional charge, it is neither an “additional guest charge” nor part of the charge for the sleeping accommodations.
- A mandatory charge is subject to the 7% South Carolina sales tax, because it is part of the charge for furnishing the sleeping accommodations.
Hurricane rental insurance comes into play when sleeping accommodations cannot be furnished because a mandatory evacuation order causes a person’s vacation to be cancelled, or because the house is destroyed or damaged during the hurricane and the vacationer cannot occupy the unit or any replacement unit. Read the Revenue Ruling.
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