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South Carolina Sales Tax on Hurricane Rental Insurance


 Hurricane rental insurance may be worthwhile.

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:

  1. Is an optional charge for hurricane rental insurance… subject to the sales tax?
  2. Is a mandatory charge for hurricane rental insurance… subject to the sales tax?

 

The department concluded the following:

  1. 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.
  2. 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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photo credit: NASA Goddard Photo and Video via photopin cc


Sales 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.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.