If you own or are considering a vacation rental on Hilton Head Island, you probably have one concern on repeat: collecting the right taxes without creating a paperwork maze. You want to delight guests, protect your returns, and stay compliant. The good news is you can do all three with a few clear steps and a smart setup.
In this guide, you will learn which taxes typically apply to short-term stays, how to register, what to collect from guests, and when it makes sense to lean on a licensed South Carolina property manager. You will also get checklists you can use immediately. Let’s dive in.
Hilton Head short-term taxes, explained
Short-term or transient lodging in South Carolina generally means stays under 90 consecutive days. If you rent your Hilton Head property for less than 90 days at a time, you should plan on a specific “stack” of taxes.
Here are the components you will likely encounter:
- State sales and use tax. The statewide base rate is generally 6 percent and applies to most lodging charges.
- Local option sales taxes. Counties and municipalities can add local sales taxes. Combined sales tax rates vary by address.
- Accommodations or hospitality taxes. These are separate from sales tax and are commonly charged on short-term stays. Municipal or county accommodations taxes help fund tourism and services.
- Special district or tourism taxes. Some resort areas have additional local taxes.
- Marketplace facilitator collections. Some online travel platforms collect and remit certain taxes for you. Coverage varies by platform and by tax type.
The key distinction is this: sales tax is a general consumption tax that often applies to the rental price and some fees, while accommodations or hospitality taxes are specific to lodging and are filed separately.
Know what taxes apply
Your taxable base usually starts with the gross rental receipts from the guest’s stay. Whether additional fees are taxable depends on South Carolina rules.
- Mandatory fees tied to occupancy are commonly taxable. Examples often include required cleaning fees or resort fees that are part of the lodging price.
- Optional or separately contracted services may be treated differently. Always confirm the treatment of cleaning, pet, or administrative fees with South Carolina Department of Revenue guidance.
To keep things simple, list every fee you charge and label each as mandatory or optional. This clarity helps you calculate the right amounts and avoid over or under-collecting.
Register before you collect
Before you collect a single dollar in taxes, confirm your registrations.
- South Carolina Department of Revenue (SCDOR). If you rent property or collect taxable fees, you generally need an SCDOR sales and use tax account to report state sales tax and any local option sales taxes.
- Town of Hilton Head Island and Beaufort County. Check the Town’s Finance or Business Licensing pages for any required accommodations or hospitality tax registration and business license requirements. Some county or regional authorities also administer accommodations taxes.
- Marketplace facilitators. If you use a platform that collects certain taxes, get written confirmation of which taxes it covers. You may still need to register and file returns, including zero returns, depending on local rules.
If you want a manager or tax professional to file for you, authorize them in writing. Use a clear authorization that spells out access and filing responsibilities.
Set rates and invoices right
Build a simple process to calculate taxes consistently and show them clearly on your guest invoices.
- Calculate the combined sales tax rate. Start with the state rate (generally 6 percent) and add any county or local option sales taxes for your property address. Then calculate accommodations or hospitality taxes separately. Do not blend them into one rate unless you have a system that tracks each line clearly.
- Decide how you display taxes. You can list taxes as separate line items or price taxes into your nightly rate. If you include taxes in your price, make sure your back-end reporting still breaks out each tax type correctly for filing.
- Itemize fees. Separate your base rent from any cleaning, pet, or administrative fees. Label mandatory items so you can apply tax rules correctly.
A simple worksheet for each booking helps. Include nights and rate, each fee with mandatory or optional status, sales tax lines, accommodations tax lines, and the total tax collected.
Who collects vs who remits
It is common for a marketplace facilitator to collect and remit certain taxes. This can be helpful, but you still own the compliance picture.
- Platforms may not collect every tax. Municipal or special district taxes are sometimes outside the platform’s coverage.
- You remain responsible for verifying. Save monthly statements, download the platform’s tax reports, and reconcile what the platform claims to have remitted.
- If you hire a property manager, put collections and remittances in writing. Specify who collects from guests, which taxes they remit, and who files each return.
Your management agreement should leave no gray areas. The fewer assumptions, the fewer headaches.
File on time and keep records
SCDOR assigns filing frequency based on expected liability. Many local accommodations or hospitality taxes require monthly or quarterly filings. Deadlines and penalties differ at the state and municipal levels.
To stay organized, build a monthly routine:
- Reconcile bookings to bank deposits and platform reports.
- Confirm which taxes were collected by a marketplace and which you need to remit.
- Prepare state sales and use tax returns and any Town or county accommodations returns.
- Pay by the due date to avoid penalties and interest.
Keep guest invoices, booking summaries, remittance receipts, and filed returns for at least the record retention period commonly used by the state and Town. Maintain separate accounting lines for rent, fees, platform commissions, and taxes collected.
When to hire a property manager
A licensed South Carolina property manager can remove most of the day-to-day friction, especially if you use multiple booking channels or prefer concierge support.
Consider professional management if:
- You do not want to manage multi-jurisdiction tax filings.
- You list on several platforms and need consolidated reporting.
- You want help with registrations, filings, and remittances.
- You face time zone, language, or availability constraints.
Before you delegate tax filings, verify the following:
- Licensing and credentials. Confirm the manager’s professional licensing status and South Carolina business registration.
- Tax expertise and systems. Ask if they prepare SCDOR sales and use returns, Town accommodations returns, and reconcile marketplace facilitator statements.
- Proof of performance. Request redacted sample returns, recent remittance receipts, and owner references.
- Contract specifics. Spell out exactly which taxes the manager will collect, remit, and report. Clarify who holds ultimate responsibility, how guest tax funds are held, whether the manager advances funds if platform collections are delayed, and how audits and records access will be handled.
- Reporting cadence. Require monthly statements that show gross receipts, itemized taxes by type, platform-collected taxes, and amounts remitted to each authority.
- Insurance and bonding. Ask about professional liability coverage and fidelity bonding for funds handling.
Favor managers with integrated accounting that automatically reconciles platform statements and produces jurisdiction-level tax reports. Ask about their experience with Hilton Head rules and any past interactions with state or Town auditors.
Owner checklist and pitfalls
Use this quick checklist to set up and stay compliant:
- Register with SCDOR for a sales and use tax account unless you confirm in writing that a marketplace collects and remits all required taxes and local authorities do not require your registration.
- Register with the Town of Hilton Head Island for accommodations or hospitality tax and obtain any required business license.
- Set up accounting to separate taxable and nontaxable charges and to label mandatory vs optional fees.
- Confirm what each platform collects and download detailed monthly remittance reports.
- Decide whether to price taxes into rates or list them separately, and reflect your approach on guest invoices.
- Keep 3 to 5 years of records, including invoices, platform reports, tax returns, and remittance receipts.
- If hiring a manager, use a written authorization and a contract with explicit tax duties.
Avoid these common pitfalls:
- Assuming a platform collects every tax. Municipal or special district taxes are often missed.
- Misclassifying cleaning or administrative fees. Taxability varies by state guidance.
- Skipping local registrations because a platform handles state tax. Local rules can differ.
- Leaving tax duties vague in a management agreement. Ambiguity creates risk.
- Filing without reconciling. Always tie platform reports to your bank deposits.
Move forward with confidence
A clean framework helps you protect your cash flow, keep guests happy, and avoid penalties. Confirm your registrations, know your tax stack, set up precise invoicing, and keep tight records. If you prefer a hands-off approach, a licensed South Carolina property manager can handle filings while you retain clear oversight.
If you would like introductions to reputable managers or a second opinion on your property’s rental potential, reach out. Schedule a Private Lowcountry Consultation with Krista Wall‑Wilson for concierge guidance tailored to Hilton Head and the Southern Beaufort County market.
FAQs
What is a short-term rental in Hilton Head?
- In South Carolina, lodging furnished for less than 90 consecutive days is generally treated as a short-term or transient rental for tax purposes.
Do Airbnb or Vrbo collect all Hilton Head taxes?
- Platforms may collect some taxes, but coverage varies by tax type and locality, so you must verify what is remitted and file any remaining returns.
Which fees are taxable for South Carolina short stays?
- Mandatory fees tied to occupancy are commonly taxable, while the treatment of other fees varies and should be confirmed with state guidance.
Do I still need to register if a platform collects?
- Often yes, since you may need an SCDOR account and local registrations and may have to file returns, including zero returns, depending on local rules.
How often are Hilton Head rental taxes filed?
- SCDOR assigns filing frequency based on liability, and local accommodations or hospitality taxes are often due monthly or quarterly depending on Town rules.
