South Carolina Taxes Mandatory Hurricane Insurance Charges

Nov 6th, 2014

The South Carolina Department of Revenue recently released a ruling on the taxability of hurricane rental insurance charges.

Along the coast of South Carolina, it is common for hotels, resorts, and other rental accommodations to offer hurricane rental insurance. The insurance protects the vacationer from loss if there is a mandatory evacuation due to a hurricane. Usually, the charge is optional, but it can be mandatory.

South Carolina taxes room rentals of less than 90 continuous days. Tax applies to room rental fees and any additional guest charges. General room, lodging, and accommodation charges are taxed at one rate. Charges for laundry, in-room movies, and telephone calls are taxed at a different rate. South Carolina does not tax hurricane insurance alone.

When hurricane insurance is mandatory, it is part of the accommodation fee. Therefore, mandatory hurricane insurance fees are taxed at the accommodation tax rate. Optional hurricane insurance is not part of the accommodation fee and is not a taxable service. Therefore, optional hurricane insurance fees are not taxed.

http://www.sctax.org/NR/rdonlyres/FF07ECA6-FC8F-4D2E-B96D-492EE87BCD70/0/RR147.pdf