How does SC Revenue Ruling 14-5 classify hotel room charges, mandatory fees, optional services, and additional guest charges?

Plain-English summary

South Carolina Revenue Ruling 14-5 sorts hotel and short-term-accommodation charges into three main buckets:

1. the room price and mandatory charges that are part of furnishing the room, taxed at the ruling's 7% accommodations rate;
2. separately charged room service, laundry and dry cleaning, in-room movies, telephone service, and meeting-room rentals, taxed at 6% when they are over and above the customary room services; and
3. other separately stated optional amenities and guest services, which are not “additional guest charges” but may still be taxable under another sales-and-use-tax provision.

The taxpayer bears the burden of proving that a charge is truly over and above the services customarily provided with the room. If it cannot, the ruling places the charge in the room-price base.

Mandatory charges versus optional services

A separately stated fee is not automatically separate from the room. Mandatory maid charges, daily phone-availability fees, mandatory movie-availability fees, pet fees, smoking-room or smoking-violation fees, damage fees, and late-checkout fees are treated by the examples as part of the accommodations charge.

By contrast, an optional end-of-stay maid service or charge for actually using an in-room safe is outside the enumerated additional-guest-charge category and is not subject to the taxes analyzed in those examples.

Enumerated additional guest charges

The ruling limits the special category to:

• room service;
• laundering and dry cleaning;
• separately purchased in-room movies;
• telephone service; and
• meeting-room rentals connected with sleeping accommodations.

For example, a per-call telephone charge or per-view movie charge is taxed at 6%, while a mandatory daily fee merely making the phone or movies available is part of the 7% room charge.

A meeting-room charge is an additional guest charge when it is added to a guest-room rental. A meeting room rented by a non-guest is not taxable under that category, although an organization renting guest rooms for attendees can bring its meeting-room rental within the rule.

Items taxed under other rules

Some optional items are not additional guest charges because another provision taxes the transaction. The ruling treats separately sold meals, linen rentals, bike rentals, and minibar products as retail sales subject to their applicable sales-tax rules. A requested newspaper is a retail sale but the ruling identifies a statutory newspaper exemption.

Separately charged valet parking is not an additional guest charge and the ruling treats it as not subject to sales tax.

Packages and cancellations

For a hotel golf package, the ruling generally subtracts documented amounts forwarded to the golf course and restaurant from the hotel accommodations base. The golf course and restaurant then account for their own admissions or sales tax. Similar treatment can apply to other tourist packages, and records must support a reasonable allocation.

A no-show charge remains taxable when the guest retained the right to use the room. A cancellation fee or retained deposit is not taxable when the reservation was actually canceled.

Common questions

Q: Does separately stating a mandatory fee remove it from the room charge?

A: No. The ruling looks at substance; a mandatory charge that is part of furnishing the room remains in the accommodations base.

Q: Are all optional hotel services tax-free?

A: No. They may be outside the additional-guest-charge category but taxable as meals, rentals, or other retail sales.

Q: Is a pay-per-view movie taxed differently from a mandatory movie fee?

A: Yes. The per-view charge is a 6% additional guest charge in the ruling, while a mandatory daily availability fee is part of the 7% room charge.

Q: Is a cancellation fee taxable?

A: Not when the reservation is canceled. A no-show room charge is taxable because the accommodation was held available for the guest.

Citations and references

• S.C. Code Ann. § 12-36-920 (accommodations and enumerated additional guest charges)
• S.C. Code Ann. § 12-36-910 (retail sales separately analyzed by the ruling)
• S.C. Code Ann. § 12-36-2120(8) (newspaper exemption)
• 2014 Act Nos. 172 and 259 (amendments applied by the ruling)
• SC Regulation 117-307.1 (accommodations regulation discussed by the ruling)

Subject

Charges by Hotels, Motels and Other Places Furnishing Sleeping Accommodations

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR14-5.pdf

Original ruling text

State of South Carolina

Department of Revenue
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 125, Columbia, South Carolina 29214

SC REVENUE RULING #14-5

SUBJECT:

Charges by Hotels, Motels and Other Places Furnishing Sleeping
Accommodations
(Sales Tax and Tax on Additional Guest Charges)

EFFECTIVE DATE:

July 1, 2014.

SUPERSEDES:

SC Revenue Ruling #98-21

REFERENCE:

S.C. Code Ann. Section 12-36-920 (2014; As Amended by Act No.172
of 2014)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2014)
S.C. Code Ann. Section 1-23-10(4) (Supp. 2012)
SC Revenue Procedure #09-3

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public. It
is an advisory opinion issued to apply principles of tax law to a set of
facts or a general category of taxpayers. It is the Department’s position
until superseded or modified by a change in statute, regulation, court
decision, or another Departmental advisory opinion.

Please note that this advisory opinion is effective July 1, 2014 and is primarily being issued
as a result of changes in Code Section 12-36-920 enacted pursuant to Act No. 172 of 2014.
SC Regulation 117-307.1 addresses many of these same questions and will be amended in
accordance with the Administrative Procedures Act to reflect the enactment of Act No. 172.
LAW:
Code Section 12-36-920, as amended by Act No. 172 and Act No. 259 (Section 3) of 2014,
imposes a sales tax upon accommodations and "additional guest charges" and reads, in part:
(A) A sales tax equal to seven percent is imposed on the gross proceeds derived
from the rental or charges for any rooms, campground spaces, lodgings, or
sleeping accommodations furnished to transients by any hotel, inn, tourist court,
tourist camp, motel, campground, residence, or any place in which rooms,
lodgings, or sleeping accommodations are furnished to transients for a
consideration. This tax does not apply:
(1) where the facilities consist of less than six sleeping rooms, contained on the
same premises, which is used as the individual's place of abode; or

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(2) to gross proceeds from rental income wholly excluded from the gross income
of the taxpayer pursuant to Internal Revenue Code Section 280A(g) as that code is
defined in Section 12-6-40(A).
The gross proceeds derived from the lease or rental of sleeping accommodations
supplied to the same person for a period of ninety continuous days are not
considered proceeds from transients. The tax imposed by this subsection (A) does
not apply to additional guest charges as defined in subsection (B) or separately
stated optional charges on a bill to a customer for amenities, entertainment,
special items in promotional tourist packages, and other guest services.
(B) A sales tax of five percent is imposed on additional guest charges at any
place where rooms, lodgings, or accommodations are furnished to transients for a
consideration, unless otherwise taxed under this chapter. For purposes of this
subsection, additional guest charges are limited to charges for:
(1) room service;
(2) laundering and dry cleaning services;
(3) in-room movies;
(4) telephone service; and
(5) rentals of meeting rooms.
Furthermore, Commission Decision #95-27 held that "the term 'additional guest charge' means
an amount which is added to the guest's room charge for a specific amenity or service for the
guest." With the amendment to Code Section 12-36-920 by Act No.172 of 2014, effective July 1,
2014 the term “additional guest charge” means an amount which is added to the guest's room
charge for room service, laundering and dry cleaning services, in-room movies, telephone
services, and the rental of meeting rooms.
Therefore, charges for rooms, lodgings and accommodations are taxed at 7%, while other
charges for room service, laundering and dry cleaning services, in-room movies, telephone
services, and the rental of meeting rooms provided at the hotel, when over and above the services
customarily provided with the room, are taxed at 6% as an "additional guest charge." However,
if an "additional guest charge" would be taxed under other provisions of the sales and use tax law
(Chapter 36 of Title 12), then such charges are not taxed as an "additional guest charge."
Finally, as part of Act No.172 of 2014, the General Assembly specifically deleted (effective July
1, 2014) from the definition of “additional guest charges” any charges for amenities,
entertainment, special items in promotional tourist packages, and other guest services. Therefore,
charges for these services are not subject to the sales tax as an “additional guest charge.” In
addition, if separately stated on the bill to a customer and optional, these charges are not subject
to the 7% sales tax imposed upon accommodations.

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It should also be noted that the determination as to what services, if any, are over and above the
services customarily provided with the room must be based on all of the facts and circumstances.
The burden of proof that a charge is an additional guest charge, and not part of the price
for the room, rests with the taxpayer. Failure to prove that a particular charge is for a
service that is over and above the services customarily provided with the room will subject
the charge to the 7% tax rate.

QUESTIONS AND ANSWERS:
The following questions and answers are intended to provide guidance with respect to the
provisions of Code Section 12-36-920. These questions and answers use examples to illustrate
Department policy.

TELEPHONE CHARGES

1. Q.

If a hotel charges $100.00 for a room, and that price includes the room and use of the
phone for local calls, what tax rate applies to the $100.00?

A.

The $100.00 charge would be subject to a tax rate of 7%. The use of the phone is a part
of the services offered and provided with the room for the $100.00.

2. Q.

If a hotel charges $80.00 per day for a room, and the customer is also charged $5.00 per
day for the availability of the phone for local calls, what tax rate applies to each of the
charges?

A.

The $80.00 room charge and the $5.00 telephone charge are taxed at 7%. The
availability of a phone is a part of the services offered and provided with a room. The
$5.00 is charged whether or not the guest uses the phone. Therefore, it is not an
additional guest charge when the charge is based on a per day rate.

3. Q.

If a hotel charges $80.00 per day for a room, and the customer is also charged $1.00 per
local phone call, what tax rate applies to each of the charges?

A.

The $80.00 room charge is taxed at 7%. Each $1.00 phone charge is taxed at 6%. The
availability of a phone is a part of the services offered and provided with a room;
however, the use of the phone for a local call is over and above the services customarily
provided with the room. Guests expect to pay a charge for each local call made from
the room phone. Therefore, the $1.00 is an additional guest charge when the charge is
based on a per call basis. (See Commission Decision #93-66.)

4. Q.

If a hotel charges $80.00 for a room, and the customer is also charged $20.00 for
various long distance calls made, what tax rate applies to each of the charges?

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A.

The $80.00 room charge is taxed at 7%, while the remaining charges for the long
distance calls are taxed at 6% as additional guest charges. The Department, in Decision

92-11 held that the charges for long distance telephone calls were not otherwise taxed

under Chapter 36 and were therefore taxable as additional guest charges. (See also
Commission Decision #93-66

MAID SERVICE

5. Q.

A.

6. Q.

If a hotel charges $100.00 for a room, and that price includes maid service, what tax
rate applies to the $100.00?
The $100.00 charge would be subject to a tax rate of 7%. The maid service is a service
provided with the room and is, therefore, a part of the room charge that is subject to the
tax at 7%.
If a hotel charges $80.00 for a room, and the customer also must pay a mandatory
$20.00 charge for maid service, which may or may not be separately stated, what tax
rate applies to each of the charges?

A.

The $80.00 room charge and the $20.00 maid service charge are taxed at 7%. The maid
service is part of the services provided with the room. The fact that it may be
separately charged does not make it a charge for a separate service. In this case the
maid service is mandatory, and therefore, the actual charge for the room is $100.00
which is taxed at 7%.

7. Q.

If a rental agency charges $800.00 per week for a condominium unit, and the customer
also must pay a mandatory $50.00 charge for maid service at the end of the week, what
tax rate applies to each of the charges?

A.

The $800.00 weekly unit charge and the $50.00 maid service charge are taxed at 7%.
The maid service is part of the services provided with the unit. The fact that it may be
separately charged does not make it a charge for a separate service. The maid service is
mandatory, and therefore, the actual charge for the unit is $850.00, which is taxed at
7%.

8. Q.

If a rental agency charges $800.00 per week for a condominium unit, and the customer
is required to leave the unit in a clean condition, what tax rate applies to each of the
charges if the customer has the option to have the rental agency clean the unit at the end
of the week for $50.00?

A.

The $800.00 weekly unit charge is taxed at 7% and the $50.00 optional maid service
charge is not subject to the sales tax. The $50.00 optional maid service is provided
over and above the services provided with the unit, but it is not an “additional guest
charge” under the statute. The $50.00 is therefore not subject to the tax.

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9. Q.

If a rental agency charges $800.00 per week for a condominium unit, a mandatory
$50.00 charge for maid service at the end of the week, and the customer has the option
to receive daily maid service for $20.00 a day, what tax rate applies to each of the
charges?

A.

The $800.00 weekly unit charge and the $50.00 maid service charge are taxed at 7%.
The maid service is part of the services provided with the unit. The maid service is
mandatory, and therefore, the actual charge for the unit is $850.00, which is taxed at
7%. The $20.00 optional maid service is provided over and above the services
provided with the unit, but it is not an “additional guest charge” under the statute. The
$20.00 is therefore not subject to the tax.

IN-ROOM MOVIES

10. Q.

If a hotel charges $100.00 for a room, and that price includes the in-room movies at no
extra charge, what tax rate applies to the $100.00?

A.

The $100.00 charge would be subject to a tax rate of 7%. The availability of in-room
movies is a part of the services offered and provided with the room for the $100.00.

11. Q.

If a hotel charges $80.00 per day for a room, and the customer is also charged a
mandatory fee of $5.00 per day for in-room movies (whether or not the guest watches
any movies), what tax rate applies to each of the charges?

A.

The $80.00 room charge and the mandatory $5.00 in-room movie charge are taxed at
7%. The availability of in-room movies is a part of the services offered and provided
with a room. The $5.00 is charged whether or not the guest watches the movies.
Therefore, it is not an additional guest charge when the charge is based on a per day
rate and the guest is charged whether or not the movies are watched.

12. Q.

If a hotel charges $80.00 per day for a room, and the customer is also charged $7.00 for
each in-room movie he watched, what tax rate applies to each of the charges?

A.

The $80.00 room charge is taxed at 7%. The $7.00 movie charge is taxed at 6%. The
availability of in-room movies is a part of the services offered and provided with a
room; however, the charge for viewing a movie is over and above the customary charge
for the room. Guests expect to pay a charge for each movie viewed. Therefore, the
$7.00 is an additional guest charge when the charge is based on a separate charge for
watching the movie. The tax on this additional guest charge is the liability of the hotel,
regardless of whether or not service is being provided by a third party or the hotel itself.
(See Commission Decision #95-26.)

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MEALS

13. Q.

If a hotel charges $100.00 for a room, and that price includes a continental breakfast for
the guest, what tax rate applies to the $100.00?

A.

The $100.00 charge is taxed at 7%. Since the continental breakfast is provided with the
room, it is not an additional guest charge. (The withdrawal of the food from the hotel's
inventory is subject to the sales tax based on its fair market value. See Code Section
12-36-90, Code Section 12-36-110 and Commission Decision #93-66.)

14. Q.

If a hotel charges $100.00 for a room, and also charges the guest a separately stated
$20.00 "club" fee, what tax rate applies to each of the charges? (The "club" fee, for that
extra $20.00, provides the guest access to a buffet meal that is not available to other
guests.)

A.

The Department, in Decision #92-32, held that the separately stated charge of $20.00
was not part of the charge for the room but a retail sale of the meal to the guest.
Therefore, the charges are taxed as follows: 7% tax applies to the $100.00 charge for
the room and 6% tax applies to the $20.00 charge for the meal. The meal is not taxed
as an additional guest charge under Code Section 12-36-920(B) since it is otherwise
taxed at 6% under Chapter 36 - Code Section 12-36-910.

LINENS

15. Q.

If a rental agency charges $800.00 per week for a condominium unit, and the customer
has the option to rent linens for $50.00 for the week, what tax rate applies to each of the
charges?

A.

The $800.00 weekly unit charge is taxed at 7%. The rental of the linens is optional and
not part of the services provided with the unit for the $800.00 charge. The $50.00
rental of the linens is not an additional guest charge since the rental charge for the
linens is a sale of tangible personal property and is otherwise taxed at 6% under
Chapter 36 - Code Section 12-36-910.

GOLF AND OTHER TOURIST PACKAGES

16. Q.

If a hotel has a "golf package" for $100.00 per night, and the customer is entitled to a
room at the hotel, one round of golf at a golf course at no extra charge, and a meal at no
extra charge, what tax rate applies?

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A.

Based on the Department’s longstanding administrative policy concerning tourist
packages (See SC Revenue Ruling #88-2) 1, the $100 charge would be subject to the 7%
tax, except any portion forwarded to the golf course for payment of the green fee and
any portion forwarded to the restaurant for payment of the meal. However, see the one
exception in the "Note" in Example #1.
The following examples best explain this longstanding administrative policy:
Example #1: The hotel receives $100 from the guest for the golf package. The hotel
pays the golf course $30 for the guest's green fee and pays the restaurant $5 for the
guest’s meal.
The hotel would be liable for the 7% tax on $65 ($100 - $35). The golf course would be
liable for the 5% admissions tax on $30 and the restaurant would be liable for 6% sales
tax on the sale of the $5 meal. This calculation must be made on a guest by guest basis.
In other words, the 7% tax due will be determined for each guest by multiplying 7% by
the total charge for the package less the portion forwarded to the golf course for
payment of the green fee and the portion forwarded to the restaurant for payment of the
meal.
Note: If the hotel’s guest is unable to play golf that day ("No-Show ") (but still received
the meal), and under terms of the golf package the guest will not be required to pay the
"green fee portion" of the package, the hotel would be liable for the 7% tax on the
amount it received from the guest less the amount paid by the hotel to the restaurant.
For example, if the hotel determined that the "green fee portion" of the $100 package
was $30 and required the guest to only pay $70 for that day, then the hotel would be
liable for the 7% tax on $65 and the restaurant would be liable the 6% sales tax on the
sale of meal.
If the hotel’s guest is unable to play golf that day ("No-Show") (but still received the
meal), and under terms of the golf package the guest must still pay the hotel the full
$100, the hotel would be liable for the 7% tax on the "accommodations portion" of the
package. The golf course would not be liable for the 5% admissions tax since the guest
did not play golf and the golf course did not receive an admissions fee from the hotel.
However, the hotel is not liable for the 6% tax on the other portion of the $100 paid by
the guest since it does not represent an additional guest charge for the service of making
the golf arrangements that were not used. This amount, however, must be equal to the
green fee that the hotel would have had to pay to the golf course in order for the entire
charge not to be subject to the 7% tax. In other words, if the hotel would have been
required to pay $30 had the guest played golf, then the $30 that would have been, but
was not, sent to the golf course is not subject to the sales tax. As such, the hotel would
be liable for the 7% tax on $65 and the restaurant would be liable for the 6% sales tax
on the sale of the meal. The $30 that would have been, but was not, sent to the golf

1

This policy has been consistent since 1988 and did not change when the sales and use tax law under Chapter 35 of
Title 12 was recodified in 1991 as Chapter 36 of Title 12 or when Act No. 172 of 2014 was enacted.

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course is not subject to either the sales tax or the admissions tax. See Anonymous v.
South Carolina Department of Revenue, 97-ALJ-17-0263-CC (April 24, 1998);
Anonymous v. South Carolina Department of Revenue, 97-ALJ-17-0379-CC (April 24,
1998); and Act No. 172 of 2014.
Example #2: The hotel receives $100 from the guest for the golf package. The hotel
pays the restaurant $5 for the guest’s meal. The hotel has an agreement with the golf
course to pay the golf course $30 for the guest's green fee. When a guest does play golf,
the hotel pays the $30; however, the hotel will receive money back from the golf course
at a later date to help pay for the hotel's advertisements of its golf packages.
The hotel would be liable for the 7% tax on $65 ($100 - $35). The golf course would be
liable for the 5% admissions tax on $30 and the restaurant would be liable for the 6%
sales tax on the sale of the meal. The fact that the hotel will receive a portion of the
money back in the future does not affect the taxation of the charges. It is merely an
expense of the golf course that is paid to the hotel.
Notes: 1. To ensure the 7% tax is not circumvented by sending most of the package
charge to the golf course and then later having a large portion of it returned to the hotel
as "advertising," the amount paid to the golf course and returned to the hotel to pay for
advertising must be reasonable and supported by the books and records of both
taxpayers. Otherwise, the Department will assess taxes according to a reasonable
breakdown of room charges, green fees, and meal charges.

2. Other tourist packages, such as tennis, honeymoon, and entertainment packages,
   handled in a similar manner would be taxed in the manner described above for golf
   packages.

BIKE RENTALS

17. Q.

If a hotel charges $100.00 per night for a room, and the customer has the option to rent
a bike to travel around the resort area for $10.00 a day, what tax rate applies to each of
the charges?

A.

The $100.00 hotel charge is taxed at 7%. The rental of the bike is optional and not part
of the services provided with the room for the $100.00 charge. The $10.00 is not an
additional guest charge. However, the rental charge for the bike is a sale of tangible
personal property and is otherwise taxed at 6% under Chapter 36.

18. Q.

If a hotel charges $100.00 per night for a room, and the hotel allows the guest to reserve
a bike at no extra charge to travel around the resort, what tax rate applies to the charge?

A.

The $100.00 hotel charge is taxed at 7%. The availability of the bike is a part of the
services provided with the room for the $100.00 charge.

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NEWSPAPERS

19. Q.

A.

If a hotel charges $80.00 for a room, and the guest receives a newspaper that is
delivered to the guest's door in the morning, what tax rate applies to the charge?
The $80.00 room charge is taxed at 7%.

20. Q.

If a hotel charges $80.00 for a room, and the customer is charged $2.00 for a newspaper
that is delivered at the guest's request, what tax rate applies to each of the charges?

A.

The $80.00 room charge is taxed at 7%. The newspaper is not an additional guest
charge since it is not one of the services specifically listed in the statute as an
“additional guest charge.” The newspaper that is provided for $2.00 is the sale of
tangible personal property; however, sales of newspapers are exempt from the sales tax
under Code Section 12-36-2120(8). 2

VALET PARKING

21. Q.

A.

If a hotel charges $80.00 for a room, and there is no additional charge to the customer
for valet parking, what tax rate applies to the charge?
The $80.00 room charge is taxed at 7%.

22. Q.

If a hotel charges $80.00 for a room, and the customer is also charged $15.00 for valet
parking, what tax rate applies to each of the charges?

A.

The $80.00 room charge is taxed at 7%, while the $15.00 charge for the valet parking is
not an additional guest charge and is not subject to the 6% sales tax.

23. Q.

A.

If a person is not a guest at a hotel, but is attending an event at the hotel, is a $15.00
charge for valet parking subject to the tax as an additional guest charge?
The $15.00 charge for valet parking is not subject to the sales tax.

MEETING ROOMS

24. Q.

A.

If a hotel charges $80.00 for a guest room, and there is no additional charge to the
customer for the use of a meeting room, what tax rate applies to the charge?
The $80.00 guest room charge is taxed at 7%.

2 Room service is generally considered a service provided to a guest that allows the guest to order food or drink
that will be bought to the guest’s room. As such, newspapers brought to a guest’s room do not fall within the
customary definition of room service. Therefore, the $2 charge to the guest for the newspaper is not an additional
guest charge.

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25. Q.

If a hotel charges $80.00 for a guest room, and the customer is also charged $35.00 for
the use of a meeting room, what tax rate applies to each of the charges?

A.

The $80.00 guest room charge is taxed at 7%, while the $35.00 charge for the meeting
room, as an additional guest charge, is taxed at 6%.

26. Q.

Is a $35.00 charge for the use of the meeting room by a person who is not a guest at the
hotel, subject to the tax as an additional guest charge?

A.

The $35.00 charge for the meeting room is not subject to the sales tax. It is not an
additional guest charge since, in order to be taxable, the charge must be in addition to a
room rental charge. This charge is not in addition to another charge.
Note: If the meeting room is being rented by an organization that is conducting a
seminar, workshop, conference, or similar meeting at the hotel, the charge for the
meeting room is taxed at 6% as an additional guest charge if the organization is also
renting guest rooms at the hotel for officers or members of the organization, invited
speakers, or others.

ROOM REFRESHMENT BAR OR REFRIGERATOR

27. Q.

A.

If a hotel charges $100.00 for a room, and the room contains a refreshment bar so the
guest may avail himself of alcoholic drinks, non-alcoholic drinks, or snacks at no extra
cost, what tax rate applies to the $100.00?
The $100.00 room charge is taxed at 7%.

28. Q.

If a hotel charges $80.00 for a room, and the room contains a refreshment bar so the
guest may avail himself of alcoholic drinks, non-alcoholic drinks, or snacks at a set
price per item, what tax rate applies to each of the charges?

A.

The $80.00 room charge is taxed at 7%, while the charges for each item the guest
consumes from the refreshment bar is taxed at a rate of 6% as a sale of tangible
personal property under Code Section 12-36-910. These charges are not additional
guest charges since they are "otherwise taxed" under Chapter 36.

SAFES

29. Q.

If a hotel charges $100.00 for a room, and that price includes the room and use of the
safe in the room, what tax rate applies to the $100.00?

A.

The $100.00 charge would be subject to a tax rate of 7%. The use of the safe is a part
of the services offered and provided with the room for the $100.00.

10

30. Q.

A.

If a hotel charges $80.00 per day for a room, and the customer is also charged $5.00 per
day for the availability of the safe in the room, what tax rate applies to each of the
charges?
The $80.00 room charge and the $5.00 charge for the safe are taxed at 7%. The
availability of a safe is a part of the services offered and provided with a room. The
$5.00 is charged whether or not the guest uses the safe. .

31. Q.

If a hotel charges $80.00 per day for a room, and the customer is also charged $5.00 if
the guest uses the safe in the room, what tax rate applies to each of the charges?

A.

The $80.00 room charge is taxed at 7%. The $5.00 charge for actually using the safe is
not subject to the tax. The availability of a safe is a part of the services offered and
provided with the room; however, the use of the safe is over and above the services
customarily provided with the room. In this case, guests expect to pay a charge for use
of the safe. Therefore, the $5.00 charge is not a part of the room charge. It is a charge
for a service that is not an additional guest charge under the statute, and therefore, not
subject to the tax.

OTHER CHARGES (PET FEES, SMOKING FEES, DAMAGE FEES. AND LATE
CHECK-OUT FEES)
32 Q.

A.

33. Q.

If a hotel charges $100.00 for a room, and also charges an additional fee of $20 for
having a pet in the room, what tax rate applies to each of the charges?
The $100.00 charge and the $20 charge are taxed at 7%. The pet fee is not a charge for
a service and it is also not an additional guest charge. It is a mandatory charge for
having a pet in the room, and therefore, the actual charge for the room is $120.
If a hotel charges $100.00 for a room, and also charges an additional fee of $20 for a
room in which the guest is allowed to smoke cigarettes, cigars and other smoking
tobacco, what tax rate applies to each of the charges?

A.

The $100.00 charge and the $20 charge are taxed at 7%. The smoking room fee is not a
charge for a service and it is also not an additional guest charge. It is a mandatory
charge for a smoking room, and therefore, the actual charge for the room is $120.

34. Q.

If a hotel charges $100.00 for a room, and also charges an additional fee of $35 if a
guest smokes cigarettes, cigars and other tobacco in a non-smoking room, what tax rate
applies to each of the charges?

A.

The $100.00 charge and the $35 charge are taxed at 7%. The fee for smoking in a nonsmoking room is not a charge for a service and it is also not an additional guest charge.
It is a mandatory charge for smoking in a non-smoking room, and therefore, the actual
charge for the room is $135.

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35. Q.

If a hotel charges $100.00 for a room, and also charges an additional fee of $35 if a
guest damages the room, what tax rate applies to each of the charges?

A.

The $100.00 charge and the $35 charge are taxed at 7%. The damage fee is not a
charge for a service and it is also not an additional guest charge. It is a mandatory
charge for causing damage to the room, and therefore, the actual charge for the room is
$135.

36. Q.

If a hotel charges $100.00 for a room, and also charges an additional fee of $15 if a
guest checks out late, past the specified time for check-out, what tax rate applies to each
of the charges?

A.

The $100.00 charge and the $15 charge are taxed at 7%. The late check-out is not a
charge for a service and it is also not an additional guest charge. It is a mandatory
charge for checking out past the specified time for check-out, and therefore, the actual
charge for the room is $115.

CANCELLATIONS

37. Q.

If a person reserves and pays for sleeping accommodations at a hotel, but does not
cancel the reservation or does not cancel the reservation by the prescribed time set by
the hotel, is the charge for the accommodations retained by the hotel subject to the tax
even though he will not use the sleeping accommodations?

A.

While the sleeping accommodations were not used, the person had the right to use such
sleeping accommodations. Therefore, the sleeping accommodations were "furnished"
and the charge by the hotel for such sleeping accommodations is subject to the tax. See
Question #38 for information concerning when accommodations are canceled but an
administrative fee or deposit is charged or retained.

38. Q.

If a person makes reservations with a hotel for sleeping accommodations, but the
reservations are canceled by such person or by the hotel, is an administrative fee or
deposit charged or retained by the hotel as a result of the cancellation subject to the tax?

A.

An administrative fee or deposit retained or charged by a hotel when reservations for
sleeping accommodations are canceled is not subject to the sales tax. See Anonymous
v. South Carolina Department of Revenue, 97-ALJ-17-0263-CC (April 24, 1998) and
Anonymous v. South Carolina Department of Revenue, 97-ALJ-17-0379-CC (April 24,
1998).
Note: See Question #37 for information concerning when accommodations are
canceled or otherwise not used but a charge for the sleeping accommodations is made
or retained by the hotel. See also Question #16, Example #1 Note, for the taxation of a
tourist package when sleeping accommodations are furnished but the guest does not use
a portion of the package (i.e. the guest pays for a golf package but does not play golf).

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SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Rick Reames III
Rick Reames III, Director
October 1
, 2014
Columbia, South Carolina
Note: This document references tax rates of 7% for the sales tax on accommodations, 6% for the
sales tax on additional guest charges, and 6% for the sales tax on sales or rentals of tangible
personal property. Counties may impose several types of local option sales and use taxes as well
as other local taxes imposed upon the furnishing of accommodations and the sale of prepared
meals. Some of these taxes are collected by the Department of Revenue on behalf of the county
imposing the tax and others are collected by the county itself.
Please note that this advisory opinion is effective July 1, 2014 and is primarily being issued
as a result of changes in Code Section 12-36-920 enacted pursuant to Act No. 172 of 2014.
SC Regulation 117-307.1 addresses many of these same questions and will be amended in
accordance with the Administrative Procedures Act to reflect the enactment of Act No. 172
of 2014.

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