Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified South Carolina tax professional before filing.
South Carolina · USA · Short-term rental taxes
Short-Term Rental Taxes in South Carolina
Short term rental taxes in South Carolina: a 7% state sales and accommodations tax, county and city accommodations taxes on top, and state income tax at 1.99% or 5.21% from tax year 2026.
The 30-Second Answer
- Short term rental tax in South Carolina starts at 7%: every stay under 90 consecutive days owes the 5% state sales tax plus the 2% state accommodations tax, and the SCDOR also collects any county sales taxes, so the state-administered rate runs from 7% (e.g. Hilton Head Island) to 10% (e.g. City of Charleston).
- Local accommodations taxes stack on top. Cities and counties can add up to 3% of their own, filed directly with them — e.g. 2% City of Charleston + 2% Charleston County, 3% combined on Hilton Head Island, and 0.5% plus a 1% hospitality fee in Myrtle Beach.
- Direct bookings need a $50 SCDOR licence on MyDORWAY and returns by the 20th of the following month. If you book exclusively through Airbnb, Vrbo or a property manager that takes the booking and payment, they remit the state tax under their own licence.
- South Carolina income tax changed for 2026: under H. 4216 the rate is 1.99% below $30,000 and 5.21% (minus $966) from $30,000 up, starting from federal AGI. Net rental profit from Schedule E or C flows onto your SC1040, due April 15, 2027.
Deductions
What South Carolina STR Hosts Can Deduct
Ordinary and necessary rental expenses reduce federal AGI, and from 2026 federal AGI is the starting point of the SC1040, so the same deductions lower your South Carolina tax too.
Accommodations and sales taxes you collect from guests and pass to the SCDOR or a city are not income and not a deduction — keep them out of your P&L. Split mixed-use costs between rental and personal days under IRC §280A.
Filing Calendar
Key Dates & Filing Calendar
Accommodations tax runs on a monthly state calendar and a separate local calendar; income tax follows the IRS dates, with one 2026 exception for last year's SC return.
Holding an SCDOR licence triggers a return every period — even when every booking went through Airbnb or a manager. If you no longer book directly, close the account on MyDORWAY to stop non-filer notices.
SCDOR — Accommodations (dor.sc.gov/sales-use-tax-index/accommodations); SCDOR — Information about H. 4216 (Apr 15, 2026); Town of Hilton Head Island — Accommodations Tax & Beach Preservation Fees
Federal & SC Income Tax Treatment
Passive Rental vs. Active Business: Which Applies to Your South Carolina STR?
Your federal classification drives your South Carolina bill too: from 2026 the SC1040 starts from federal AGI, so whatever Schedule E or Schedule C produces is what the state taxes.
Passive Rental — Schedule E
The default for most beach and city hosts
- Report rents and expenses on Schedule E (Form 1040); the net figure is part of federal AGI and carries onto the SC1040.
- No self-employment tax on the net rental profit.
- Losses are passive; the $25,000 active-participation allowance phases out between $100,000 and $150,000 of modified AGI.
- Depreciate the building over 27.5 years — but keep a separate SC schedule, because South Carolina does not adopt federal §168(k) bonus depreciation.
No income ceiling; SC taxes the net profit at 1.99% or 5.21% depending on income
Active Business — Schedule C
When you run it like a small inn
- Applies when the average stay is 7 days or less and you provide substantial services (daily cleaning, meals, concierge).
- Net profit is subject to 15.3% self-employment tax (Social Security portion capped at the $184,500 2026 wage base).
- Losses can offset other income if you materially participate.
- May qualify for the federal §199A QBI deduction; South Carolina taxes the resulting AGI under its own rates and deduction.
No ceiling; SE tax applies on top of federal and SC income tax
Depreciation
Depreciation for South Carolina STR Properties
Depreciation is usually the largest non-cash deduction for a South Carolina rental — but the state and federal schedules can differ.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building | 27.5 years (straight-line) | Allocate the price between land (not depreciable) and building; your county assessment can support the split. |
| Furniture, appliances & linens | 5 years (MACRS) | Federal 100% bonus depreciation is permanent for property acquired after Jan 19, 2025 — South Carolina does not adopt it, so the SC deduction is spread out. |
| Land improvements (decks, docks, fencing, landscaping) | 15 years (MACRS) | Beach walkovers and outdoor showers outside the building shell usually fall here. |
| HVAC, roof & structural improvements | 27.5 years (straight-line) | Treated as part of the building unless a cost segregation study reclassifies components. |
SC Information Letter #26-4 confirms South Carolina does not adopt the OBBBA changes to IRC §168(k). Keep a separate state depreciation schedule and make the add-back/subtraction on the SC1040 each year.
On sale, federal unrecaptured §1250 gain is taxed at up to 25%. South Carolina taxes the gain as part of AGI, and because state and federal depreciation can differ, your SC basis may not match your federal basis.
Accommodations & Lodging Tax
South Carolina Accommodations Tax: State, County and City Layers
The lodging tax on a South Carolina vacation rental is built from three layers: the 7% state rate, county sales taxes the SCDOR collects, and local accommodations taxes paid straight to the city or county.
The SCDOR's ST-575 lists the combined state-administered rate for every municipality. Local accommodations and hospitality taxes are extra and are not on that list — they are filed with the local government.
7–10% state-administered, plus local accommodations taxes (14% all-in within the City of Charleston)
SCDOR — Accommodations Tax page and ST-575 rate chart; City of Charleston — Accommodations Tax for STRs; Town of Hilton Head Island; City of Myrtle Beach Business License FAQ
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb / Vrbo booking | The online travel company that takes the booking and payment remits the 7% state tax plus SCDOR-collected county taxes under its own licence; Airbnb also lists local taxes it remits in Charleston, Hilton Head, Myrtle Beach and other areas | You don't need an SCDOR licence for these stays. Check each local tax on the platform's list — any it doesn't cover is still yours to file |
| Property manager booking | The manager who reserves the rental and accepts payment is responsible for the full booking | Get written confirmation of which state and local taxes the manager files for your unit |
| Direct booking (your own site, repeat guests) | You collect from the guest and file with the SCDOR monthly and with the city/county on its own schedule | Get a $50 SCDOR licence per location, a local business licence/permit, and keep tax separate from rent in your books |
Required cleaning fees and platform service fees are part of the taxable rent; optional cleaning is not. Myrtle Beach adds 0.5% local accommodations tax and a 1% hospitality fee paid to the City; Horry County and other jurisdictions set their own rates — confirm with the local revenue office.
Platforms
Airbnb Tax in South Carolina: How the Platforms Handle It
Online travel companies remit South Carolina's state accommodations tax for the bookings they take. Local coverage is patchier, and income reporting to the IRS follows federal thresholds.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Form 1099-K if payouts exceed $20,000 and 200 transactions; 1099-MISC for other payments of $2,000+ | Yes — 5% state sales tax, 2% state accommodations tax and SCDOR-collected local taxes; plus listed local taxes (e.g. Charleston, Charleston County, Hilton Head Island, Myrtle Beach, Beaufort and Horry Counties) | Earnings and tax reports in the host dashboard; 1099s by January 31 |
| Vrbo / Expedia | Form 1099-K at the same federal thresholds | Yes for state tax — the SCDOR names Vrbo and Expedia among the online travel companies responsible for tax on bookings they take; confirm local coverage | Annual payout and tax summary in the owner dashboard |
| Booking.com & other OTAs | Varies by platform and payment model | Depends on whether the site takes the booking and payment — if it does, the SCDOR treats it as responsible; confirm in writing before relying on it | Check the extranet for payout statements |
| Direct bookings | No third-party reporting; you report all income | No — you collect and remit state tax to the SCDOR and local tax to the city/county | Your own booking ledger |
Airbnb and Vrbo Plus Direct Guests?
The platforms only remit on their own bookings and will not file under your SCDOR licence. Keep one ledger by channel, file your monthly return showing only direct bookings (zeros are fine), and add up income from every channel on Schedule E or C, since each 1099-K covers one platform only.
US Reporting — 1099-K, Not DAC7
DAC7 is an EU rule and does not apply to South Carolina properties. US platforms report host payouts to the IRS on Form 1099-K when gross payments exceed $20,000 and 200 transactions in the year (restored by the One Big Beautiful Bill Act). All rental income is taxable whether or not you get a form.
SCDOR — Accommodations FAQ (dor.sc.gov); Airbnb Help Center — Occupancy tax collection and remittance in South Carolina (airbnb.com/help/article/2328); IRS — Form 1099-K
Illustrative P&L: A Coastal South Carolina Condo
Example: a condo earning $36,000 in rents (excluding the accommodations taxes guests paid). For illustration only — not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep and How Long
The SCDOR, your city or county revenue office and the IRS can each ask for proof — keep your records organised by property and booking channel.
| Keep | How long | Why |
|---|---|---|
| Booking records by channel (dates, nights, rent, taxes charged) | At least 4 years | Shows which stays the platform remitted on and which you owed; supports rental vs. personal days |
| MyDORWAY accommodations returns and payment confirmations | At least 4 years | Evidence for SCDOR reviews and non-filer notices; refund claims are allowed within 3 years of filing |
| Local accommodations tax / hospitality fee filings | At least 4 years | Cities and counties audit these separately from the state |
| Expense receipts and platform 1099s | At least 3 years after filing (6 if income is understated by 25%+) | IRS audit window; SC returns start from the same federal AGI |
| Purchase closing statement and federal + SC depreciation schedules | Until 3 years after you sell | Needed for basis and recapture — and the SC schedule differs because the state skips bonus depreciation |
If a platform or manager files for you, ask for a year-end statement showing the state and local tax remitted on your unit. It is your best defence against a non-filer notice.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
Educational content only. Rates and rules were checked against the SCDOR, local governments and platform help pages in September 2026; local accommodations taxes change — confirm with your city or county before filing.
- SCDOR — Accommodations Tax — 5% sales + 2% accommodations tax, 90-day rule, licence, platform responsibility, cleaning fees, 20th-of-month due date. https://dor.sc.gov/sales-use-tax-index/accommodations
- SCDOR — ST-575 Local Sales & Accommodations Tax Rates — Combined state-administered accommodations rate by municipality (e.g. Charleston 10%, Hilton Head Island 7%). https://dor.sc.gov/sites/dor/files/forms/ST575.pdf
- SCDOR — Information about H. 4216 — 2026 income tax rates (1.99% / 5.21% minus $966), federal AGI starting point, SCIAD. https://dor.sc.gov/news/information-about-h-4216
- SCDOR — SC Information Letter #26-4 (Revised) — IRC conformity; South Carolina does not adopt the OBBBA §168(k) changes. https://dor.sc.gov/income-tax-south-carolina-internal-revenue-code-conformity-update
- SCDOR — Retail License — $50 non-refundable licence fee; apply on MyDORWAY. https://dor.sc.gov/businesses/apply-business-tax-account/licensing-retail-license
- City of Charleston — Accommodations Tax for STRs — 2% city + 2% Charleston County accommodations tax; business licence and STR permit. https://www.charleston-sc.gov/2339/Accommodations-Tax-for-STRs
- Town of Hilton Head Island — Accommodations Tax & Beach Preservation Fees — 3% combined local tax, quarterly due dates. https://hiltonheadislandsc.gov/government/finance/taxes/accommodations_tax_beach_preservation_fees.php
- City of Myrtle Beach — Business License FAQs — 0.5% local accommodations tax and 1% hospitality fee. https://www.cityofmyrtlebeach.com/careers/business/business_faq.php
- Airbnb Help Center — Occupancy tax in South Carolina — State and local taxes Airbnb collects and remits. https://www.airbnb.com/help/article/2328
Questions
Frequently Asked Questions — South Carolina STR Taxes
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