A recent addition to state law may help solve one of the most frustrating problems presented to cities and towns by short-term rentals: finding them.
The proliferation of short-term rentals across South Carolina has happened so quickly that many cities and towns aren’t aware these businesses have located within their boundaries, let alone where they’re located. Similarly, short-term rental businesses aren’t aware of their obligations under state and local laws. However, Act 237, enacted in 2022, should make it easier for the state and cities to ensure these businesses are following the law.
The new law requires a filer of a state accommodations tax return for multiple locations to disclose each rental’s location with the SC Department of Revenue. So, if a local rental property management company files a state accommodations tax return for the five properties it manages, it must also tell SCDOR where those properties are located. The same would apply to online marketplace facilitators who collect and remit state accommodations taxes for multiple locations.
In addition, the tax filer must tell SCDOR how much of the tax paid is attributable to each property.
Cities and towns have previously had limited tools available to them to locate all of the short-term rental businesses located in their jurisdictions. Sophisticated, expensive software that scours online listings and old-fashioned, labor-intensive audits have been the few options for finding short-term rentals.
With the enactment of Act 237, however, cities and towns will be able request the location listings from SCDOR and better account for the state accommodations tax that agency remits to them. The location information will also help cities and towns ensure that each short-term rental business is also remitting the local accommodations tax and business license tax like their hotel and motel competitors.
Join several mayors at the Municipal Association’s Hometown Legislative Action Day on February 7 for a panel discussion about how their cities found solutions to short-term rental challenges. Find all session information at www.masc.sc (keyword: HLAD).