Do owners who rent out South Carolina vacation properties through 'rent by owner' websites owe sales and accommodations tax (per SC IL #15-4)?

Plain-English summary

If you rent out a South Carolina vacation property — including through a "rent by owner" website — you generally owe tax and must be licensed. Furnishing sleeping accommodations to transients is subject to South Carolina sales tax, and this Information Letter reminds property owners of the full stack of taxes that apply.

Specifically, unless the rental is otherwise exempt, an owner must:

• Be licensed with the Department; and
• Remit the 7% state sales tax on accommodations, plus any applicable local sales tax, to the South Carolina Department of Revenue; and
• Remit any applicable local accommodations tax — which municipalities and counties may impose at up to 3% — directly to the municipality and county where the property is located (the Department does not collect that one).

The letter carries out the "Fairness in Lodging Act" (Act No. 261 of 2014, effective June 9, 2014), enacted to improve compliance with state and local accommodations tax laws. Under it, the Department and local governments share information, and the Department asks rent-by-owner vacation rental websites to post a notice — the letter provides suggested wording — telling South Carolina property owners of these licensing and tax obligations. The notice may appear anywhere on the site, including the page where an owner first registers and lists a property.

What this means for you

If you rent out a South Carolina vacation property

Get licensed and collect and remit the 7% state sales tax plus any local sales tax to the Department, and pay any local accommodations tax (up to 3%) directly to the city and county. Check whether an exemption applies to your situation; Chapter 11 of the South Carolina Sales and Use Tax Manual summarizes exemptions that may apply to furnishing accommodations.

If you operate a rent-by-owner rental website

The Department asks you to post a statement (the letter supplies sample text) notifying South Carolina property owners that they must be licensed and remit applicable state and local taxes on their rentals.

Common questions

Q: I only rent my place out occasionally through a website — do these taxes still apply?
A: The letter states that persons furnishing sleeping accommodations to transients in South Carolina must be licensed and remit the applicable taxes unless the rental is otherwise exempt. Check the exemption summary in Chapter 11 of the Sales and Use Tax Manual for your situation.

Q: What taxes apply, and who collects each?
A: The 7% state sales tax and any applicable local sales tax go to the South Carolina Department of Revenue; the local accommodations tax (up to 3%) is collected directly by the municipality and county where the property is located.

Q: What is the "Fairness in Lodging Act"?
A: Act No. 261 of 2014 (effective June 9, 2014), enacted to improve compliance with state and local accommodations tax laws — including information-sharing between the Department and local governments and the request that rent-by-owner websites post the compliance notice.

Subject

“Rent by Owner” Vacation Rental Websites

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL15-4.pdf

Original ruling text

State of South Carolina

Department of Revenue
300A Outlet Pointe Blvd., P. O. Box 125, Columbia, South Carolina 29214
Website Address: http://www.dor.sc.gov

SC INFORMATION LETTER #15-4
SUBJECT:

“Rent by Owner” Vacation Rental Websites
(State and Local Sales Taxes and Local Accommodations Taxes)

DATE:

April 1, 2015

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2014)
S.C. Code Ann. Section 1-23-10(4) (2005)
SC Revenue Procedure #09-3

SCOPE:

An Information Letter is a written statement issued to the public to
announce general information useful in complying with the laws
administered by the Department. An Information Letter has no
precedential value.
NOTICE TO ALL “RENT BY OWNER”
VACATION RENTAL WEBSITES

In 2014, the South Carolina General Assembly enacted the “Fairness in Lodging Act” (Act No.
261 of 2014). The purpose of this law, which became effective June 9, 2014, is to improve
compliance with state and local accommodations tax laws.
Under South Carolina law, a sales tax is imposed on charges or rentals derived from the
furnishing of sleeping accommodations to transients. The sales tax on accommodations is
imposed at a 7% state rate, plus any applicable local sales tax collected by the South Carolina
Department of Revenue on behalf of the local jurisdiction. In addition, municipalities and
counties may impose a local accommodations tax of up to 3% that the municipality or county
collects directly.
Under the “Fairness in Lodging Act,” the South Carolina Department of Revenue and
municipalities and counties will be sharing information to ensure better compliance with the law.
In addition, the Department must identify websites containing “rent by owner” vacation rental
opportunities and request that such websites post a statement notifying all owners of South
Carolina rental properties that they must be licensed and must remit all applicable state and local
fees and taxes on charges and rentals derived from the furnishing of sleeping accommodations,
unless the rental is otherwise exempt under the law.

It is recommended that websites containing “rent by owner” vacation rental opportunities place a
statement, similar to the one below, on their website concerning South Carolina:
Persons furnishing sleeping accommodations in South Carolina for vacation rental
purposes must be licensed and must remit (unless otherwise exempt) the 7% state
sales tax, plus any applicable local sales tax, to the South Carolina Department of
Revenue, and must also remit any applicable local accommodations tax collected
directly by the municipality and county in which the property is located to the
applicable municipality and county.
The statement may be placed anywhere on the website, including the webpage on which the
owner of the vacation rental property first registers with the website and posts their property for
rental.
For additional information on sales taxes on sleeping accommodations that must be remitted to
the South Carolina Department of Revenue, call (803) 898-5000 or visit our website at
www.dor.sc.gov. In addition, a summary of certain exemptions that may be applicable to persons
furnishing sleeping accommodation can be found in Chapter 11 of the South Carolina Sales and
Use Tax Manual which is located in the “News and Resources” tab of the website. Under the
“News and Resources” tab, click on “Publications” and then “Tax Manuals” to find the sales and
use tax manual.
For information on local accommodations taxes collected directly by municipalities and counties,
visit the website of the municipality and county in which the property is located.

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