South Carolina property managers who list their client homes on Airbnb or Vrbo would become legally responsible for collecting and remitting all state and local accommodations taxes under House Bill 3876.
The bill has already cleared the state House and is now under review in the Senate.
If approved, the bill creates a new category called an accommodations intermediary, which includes digital booking platforms that charge a fee to facilitate rentals.
Under the proposed law, these intermediaries would normally handle tax collection. But if a property owner has hired a professional property management company, that manager becomes the merchant of record and assumes full tax liability, according to the legislative text.
Platforms must hand over guest payment data to the manager within one business day.
“HB 3876 risks making short-term rentals in South Carolina so burdensome that many small hosts could be forced out of the market entirely,” the outlet reported.
South Carolina Short-Term Rental Bill Sparks Fears for Small Hosts and Tourism Economy
The catch would hit small operators hardest.
According to the “Reason Foundation,” the bill would establish arbitrary limits on short-term rental providers, undermining property rights and distorting the market.
“HB 3876 risks making short-term rentals in South Carolina so burdensome that many small hosts could be forced out of the market entirely,” the outlet reported. “Homeowners should be free to rent their property and pay their taxes as they see fit, provided they comply with the law. Beyond this principle, STRs are a vital part of the tourism economy in South Carolina and across the United States. It would be shortsighted for the state to restrict this vibrant market,” the publication continued.
Property managers would be forced to navigate state and local tax codes themselves rather than relying on platform infrastructure already built to handle compliance.
The bill also requires an annual report to the South Carolina Department of Revenue listing every property rented for more than 14 days.
Opponents argue the measure distorts the market in favor of larger management companies that can absorb compliance costs, while smaller firms may exit the business entirely or refuse to take on new clients.
The Senate Finance Natural Resources and Economic Development subcommittee gave the bill a favorable report in late March, pushing it closer to a floor vote.
In 2022, the economic impact of the cumulative short-term rental market in South Carolina was $4.2 billion, including direct and indirect goods and services attributable to STRs. From bookings on Airbnb alone, South Carolina collected $60 million in tourism tax revenue in 2023.
