A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION 12-36-72 SO AS TO SPECIFY THE PARTY RESPONSIBLE FOR COLLECTING AND REMITTING CERTAIN TAXES AND FEES IMPOSED ON ACCOMMODATIONS; BY AMENDING SECTION 12-36-70, RELATING TO THE DEFINITION OF RETAILER, SO AS TO INCLUDE PERSONS OPERATING AS AN ACCOMMODATIONS INTERMEDIARY AND TO DELETE AN EXCEPTION; BY AMENDING SECTION 12-36-920, RELATING TO THE ACCOMMODATIONS TAX, SO AS TO SPECIFY THE PARTY RESPONSIBLE FOR COLLECTING AND REMITTING CERTAIN TAXES AND FEES IMPOSED ON ACCOMMODATIONS AND TO REQUIRE AN ANNUAL REPORT ON IMPOSITIONS; BY AMENDING SECTION 6-1-510, RELATING TO THE LOCAL ACCOMMODATIONS TAX, SO AS TO INCLUDE GROSS PROCEEDS OF PERSONS ACTING AS MERCHANTS OF RECORD; BY AMENDING SECTION 6-1-520, RELATING TO THE LOCAL ACCOMMODATIONS TAX, SO AS TO REQUIRE A LOCAL GOVERNMENT TO NOTIFY THE DEPARTMENT OF REVENUE AND THE STATE TREASURER OF CERTAIN IMPOSITIONS; BY AMENDING SECTION 6-1-570, RELATING TO REMITTING THE LOCAL ACCOMMODATIONS TAX, SO AS TO CLARIFY THE TAX IS TO BE COLLECTED; BY AMENDING SECTION 6-1-630, RELATING TO THE BEACH PRESERVATION FEE, SO AS TO REQUIRE THE FEE TO BE COLLECTED AND REMITTED IN THE SAME MANNER AS THE LOCAL ACCOMMODATIONS TAX AND TO REQUIRE THE LOCAL GOVERNMENT TO NOTIFY THE DEPARTMENT OF REVENUE AND THE STATE TREASURER OF THE IMPOSITION OF THE FEE; AND BY AMENDING SECTION 5-7-30, RELATING TO THE POWERS OF A MUNICIPALITY, SO AS TO REQUIRE CERTAIN UNIFORM SERVICE CHANGES ON ACCOMMODATIONS BE COLLECTED AND REMITTED IN THE SAME MANNER AS THE LOCAL ACCOMMODATIONS TAX AND TO REQUIRE THE LOCAL GOVERNMENT TO NOTIFY THE DEPARTMENT OF REVENUE AND THE STATE TREASURER OF THE IMPOSITION OF THE FEE.
H. 3876 revises South Carolina’s tax rules for short-term and other transient accommodations, with a focus on online travel agencies, digital booking platforms, and professional property management companies. The bill creates a new statutory framework defining “accommodations intermediary,” “accommodations provider,” “professional property management company,” and “merchant of record,” and assigns responsibility for collecting and remitting state accommodations tax and related local taxes and fees. In general, an accommodations intermediary must collect and remit the applicable taxes on transactions it facilitates, but if the property owner has engaged a professional property management company and that company is designated as merchant of record, the management company becomes responsible for collection and remittance instead.
The bill also requires intermediaries to separately state the tax on invoices, add it to the room charge, and treat the tax as a debt owed by the customer to the intermediary. It requires annual confidential reporting by accommodations intermediaries and providers of the physical address of accommodations rented for more than 14 days in the prior year. In addition, the Department of Revenue must annually publish state and local accommodations tax rates, fees, and surcharges, and must notify intermediaries of new or increased local charges before certain enforcement provisions apply. Local governments that impose accommodations-related taxes or beach preservation fees must notify the Department of Revenue and the State Treasurer, and municipalities and counties must provide tax information to the department for public publication.
The bill’s impact on state law is broad, amending multiple code sections in Titles 12, 6, 5, and 40. It expands the definition of “retailer” to include accommodations intermediaries, changes the state accommodations tax statute to recognize merchant-of-record arrangements, and aligns local accommodations tax and beach preservation fee collection with the same framework. It also creates a new local notice-and-publication system intended to make accommodations taxes more transparent and easier to administer, while limiting liability where local governments fail to timely report new taxes or changes. The bill expressly excludes hotels that already collect and remit the state accommodations tax.
The general sentiment reflected in the bill’s progress appears favorable, at least procedurally. The House passed the bill by a substantial margin, 66-37, and the Senate Finance Committee later reported it favorably with amendment. That suggests the proposal has significant support as a tax-administration and compliance measure, even though it was refined in committee before advancing.
The main points of contention are likely the allocation of tax-collection responsibility and the reporting obligations imposed on booking platforms and property managers. The bill shifts compliance duties among accommodations intermediaries, property owners, and professional property management companies depending on merchant-of-record status, which may raise operational and privacy concerns, especially because the bill requires transmission of booking and payment details and annual reporting of property addresses. Local governments may also be affected by the new notice requirements and the rule that they bear the duty to inform the Department of Revenue of accommodations-related taxes, with liability limited if they fail to do so.
The bill amends South Carolina’s accommodations tax statutes to assign collection and remittance duties among accommodations intermediaries, property owners, and professional property management companies, and it expands related definitions in the sales tax code to treat accommodations intermediaries as retailers. It also changes the administration of local accommodations taxes and beach preservation fees by requiring local governments to notify the Department of Revenue and the State Treasurer of new levies or changes, and by creating a public statewide publication of applicable accommodations-related taxes and fees. These changes affect online booking platforms, property managers, hotels, municipalities, counties, and the Department of Revenue.
The bill appears to have generally favorable momentum. The House passed it with a clear majority, and the Senate Finance Committee recommended passage with amendment, indicating support for the bill’s overall approach. The available record does not show recorded committee debate, but the amendment process suggests lawmakers were willing to refine the bill rather than reject it.
The likely areas of disagreement are who should be treated as the merchant of record, who must collect and remit state and local accommodations taxes, and how much information intermediaries must provide to property managers and the state. Online travel agencies and digital platforms may object to being made responsible for tax collection and reporting, while property managers may support the carve-out that shifts responsibility to them when designated. Local governments may also be sensitive to the bill’s notice requirements and the liability limitation if they fail to report taxes to the Department of Revenue on time.