Which South Carolina Department of Revenue regulations did the General Assembly approve in June 2008 (per SC IL #08-10)?

Plain-English summary

This Information Letter reports the Department of Revenue regulations the General Assembly approved on June 4, 2008. A promulgated regulation becomes official once published in the State Register — here, on June 27, 2008. The letter attaches each regulation as published.

The regulations are:

• 117-304.1 — Transfer Between State Agencies and the State and Political Subdivisions (Sales and Use).
• 117-307 and 117-307.1 — Hotels, Motels and Similar Facilities (Sales and Use Tax).
• 117-307.3 — Certain Facilities Not Subject to Sales Tax on Accommodations (Sales Tax).
• 117-329 — Communications Services (Sales and Use Tax).

What this means for you

This is a notice item pointing to four newly official regulations. They are most relevant to the lodging/accommodations industry (117-307, 117-307.1, and 117-307.3, addressing hotels, motels, similar facilities, and facilities not subject to the accommodations tax) and to providers of communications services (117-329). Read the attached regulation text for the operative rules, and confirm the current version.

Common questions

Q: What regulations does this letter cover?
A: 117-304.1 (agency transfers), 117-307 and 117-307.1 (hotels, motels and similar facilities), 117-307.3 (certain facilities not subject to the accommodations tax), and 117-329 (communications services).

Q: When did they become effective?
A: They became official upon publication in the State Register on June 27, 2008.

Subject

Regulations Approved by the General Assembly

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL08-10.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P.O. Box 125, Columbia, South Carolina 29214
Web Address: www.sctax.org

SC INFORMATION LETTER #08-10
SUBJECT:

Regulations Approved by the General Assembly

DATE:

June 6, 2008

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2000; Supp. 2007)
S.C. Code Ann. Section 1-23-10(4) (2005)
SC Revenue Procedure #05-2

SCOPE:

An Information Letter is a written statement issued to the public to
announce general information useful in complying with the laws
administered by the Department. An Information Letter has no
precedential value.

The following regulation proposals were approved by the General Assembly on June 4,
2008 and will become official regulations upon publication in the State Register on June
27, 2008.
Each regulation is attached as published on the General Assembly website at
http://www.scstatehouse.net/index.html (excluding the initial page of legislative history).
Regulation No.

Subject

Document

Page No.

117-304.1

Transfer Between State Agencies
3158
the State and Political Subdivisions
(Sales and Use)

2

117-307 and
117-307.1

Hotels, Motels and Similar
Facilities
(Sales and Use Tax)

3163

4

117-307.3

Certain Facilities Not Subject
to Sales Tax on Accommodations
(Sales Tax)

3159

14

117-329

Communications Services
(Sales and Use Tax)

3164

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Document No. 3158
DEPARTMENT OF REVENUE
CHAPTER 117
Statutory Authority: 1976 Code Section 12-4-320
117-304.1. Sales Tax
Synopsis:
The South Carolina Department of Revenue is considering amending SC Regulation 117304.1 concerning the application of the sales and use tax to transfers of tangible personal
property from a State agency to another State agency, a county or a municipality.
This regulation presently does not deem such transfers to be sales at retail provided the
transferring agency is only reimbursed its costs and paid the tax on its initial purchase of
the tangible personal property. In other words, the sale of tangible personal property by a
State agency to another agency is not subject to the sales tax if the transferring agency is
only reimbursed its costs and expenses in conveying the property and it paid the tax on its
initial purchase of the property.
Code Section 12-36-910(B)(4) imposes the sales tax on the “fair market value of tangible
personal property manufactured within this State, and used or consumed within this State
by the manufacturer.” For example, if a manufacturer of an industrial cleaning solution
uses the cleaning solution instead of selling it, the manufacturer is liable for the sales tax
on the fair market value of the cleaning solution it manufactured and used.
The proposed amendment to SC Regulation 117-304.1 is a technical correction
concerning Code Section 12-36-910(B)(4) to ensure that a State agency that
manufactures tangible personal property receives the same treatment for property it
manufactures and uses that it would if it manufactured the property and transferred it to
another agency, county or municipality at cost.
Instructions:
Amend SC Regulation 117-304.1 concerning the application of the sales and use tax to
transfers of tangible personal property from a State agency to another State agency, a
county or a municipality.
Text:
117-304.1
Transfers Between Agencies and Between the State and its Political
Subdivisions.
An agency of the State of South Carolina is not deemed to be selling tangible personal
property at retail when transferring tangible personal property to another agency of the
State or to a county or to a municipality if the consideration for the transfer only

reimburses the transferring agency for its cost and expenses in conveying the property;
provided transferring agency has paid tax on the initial purchase of the tangible personal
property. In addition, the provisions of Code Section 12-36-910(B)(4) do not apply to a
State agency that manufactures tangible personal property within the State and uses or
consumes the property in the State if the State agency paid tax on the cost of the tangible
personal property incorporated into the item the agency manufactured for its own use or
consumption.
Where, however, a State agency sells tangible personal property to persons other than
another State agency, county, or municipality for use or consumption, such sales shall be
considered retail sales subject to the tax. The agency making the sale is required to be
licensed as a retailer under the terms and provisions of the sales and use tax law.
Fiscal Impact Statement:
There will be no impact on state or local political subdivisions expenditures in complying
with this proposed legislation.
Statement of Rationale:
The purpose of amending SC Regulation 117-304.1 is to ensure that a State agency that
manufactures tangible personal property receives the same treatment for property it
manufactures and uses that it would if it manufactured the property and transferred it to
another agency, county or municipality at cost.
This regulation presently does not deem such transfers to be sales at retail provided the
transferring agency is only reimbursed its costs and paid the tax on its initial purchase of
the tangible personal property. Code Section 12-36-910(B)(4) imposes the sales tax on
the “fair market value of tangible personal property manufactured within this State, and
used or consumed within this State by the manufacturer.” The proposed amendment to
SC Regulation 117-304.1 is a technical correction concerning Code Section 12-36910(B)(4) to ensure that a State agency that manufactures tangible personal property
receives the same treatment for property it manufactures and uses that it would if it
manufactured the property and transferred it to another agency, county or municipality at
cost.

3

Document No. 3163
DEPARTMENT OF REVENUE
CHAPTER 117
Statutory Authority: 1976 Code Section 12-4-320
117-307. Sales Tax
117-307.1. Sales Tax
Synopsis:
The South Carolina Department of Revenue is considering amending SC Regulation 117307 and SC Regulation 117-307.1 concerning the sales tax on accommodations and
“additional guest charges”. During the 2006 session of the General Assembly, Code
Section 12-36-1110 was added to increase the general sales and use tax rate from 5% to
6% beginning June 1, 2007. This rate increase does not apply to the 7% sales tax imposed
on sleeping accommodations under Code Section 12-36-920(A). However, the sales tax
imposed on additional guest charges at places providing sleeping accommodations under
Code Section 12-36-920(B), and all other sales of tangible personal property at a place
providing sleeping accommodations, increased from 5% to 6% beginning June 1, 2007.
The purpose of this regulation proposal is to amend SC Regulation 117-307 and SC
Regulation 117-307.1 to change the 5% tax rate to the new 6% tax rate with respect to
additional guest charges at places providing sleeping accommodations under Code
Section 12-36-920(B) and all other sales of tangible personal property at a place
providing sleeping accommodations. The amendment would be effective June 1, 2007 –
the effective date of the 6% tax rate.
Instructions:
Amend SC Regulation 117-307 and SC Regulation 117-307.1 concerning the sales tax on
accommodations and “additional guest charges.
Text:
117-307 Hotels, Motels, and Similar Facilities.
Code Section 12-36-920 imposes a sales tax upon accommodations and "additional guest
charges." The term "additional guest charge" means an amount which is added to the
guest's room charge for a specific amenity or service for the guest.
Therefore, charges for rooms, lodgings and accommodations are taxed at 7%, while other
charges for other services provided at the hotel, when over and above the services
customarily provided with the room, are taxed at 6% as an "additional guest charge."
However, if an "additional guest charge" would be taxed under other provisions of the
sales and use tax law (Chapter 36 of Title 12), then such charges are not taxed as an
"additional guest charge."

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It should therefore be noted that the determination as to what services, if any, are over
and above the services customarily provided with the room must be based on all of the
facts and circumstances.
The burden of proof that a charge is an additional guest charge, and not part of the price
for the room, rests with the taxpayer. Failure to prove that a particular charge is for a
service that is over and above the services customarily provided with the room will
subject the charge to the 7% tax rate.
117-307.1 Examples of the Application of Tax to Various Charges Imposed by Hotels,
Motels, and Other Facilities.
The following questions and answers are intended to provide guidance with respect to the
provisions of Code Section 12-36-920.
Telephone Charges
1.Q. If a hotel charges $100.00 for a room, and that price includes the room and use of
the phone for local calls, what tax rate applies to the $100.00?
A. The $100.00 charge would be subject to a tax rate of 7%. The use of the phone is a
part of the services offered and provided with the room for the $100.00. Therefore, it is
not an additional guest charge.
2.Q. If a hotel charges $80.00 per day for a room, and the customer is also charged $5.00
per day for the availability of the phone for local calls, what tax rate applies to each of the
charges?
A. The $80.00 room charge and the $5.00 telephone charge are taxed at 7%. The
availability of a phone is a part of the services offered and provided with a room. The
$5.00 is charged whether or not the guest uses the phone. Therefore, it is not an
additional guest charge when the charge is based on a per day rate.
3.Q. If a hotel charges $80.00 per day for a room, and the customer is also charged $1.00
per local phone call, what tax rate applies to each of the charges?
A. The $80.00 room charge is taxed at 7%. Each $1.00 phone charge is taxed at 6%. The
availability of a phone is a part of the services offered and provided with a room;
however, the use of the phone for a local call is over and above the services customarily
provided with the room. Guests expect to pay a charge for each local call made from the
room phone. Therefore, the $1.00 is an additional guest charge when the charge is based
on a per call basis.
4.Q. If a hotel charges $80.00 for a room, and the customer is also charged $20.00 for
various long distance calls made, what tax rate applies to each of the charges?

5

A. The $80.00 room charge is taxed at 7%, while the remaining charges for the long
distance calls are taxed at 6% as additional guest charges. The Department, in Decision

92-11 held that the charges for long distance telephone calls were not otherwise taxed

under Chapter 36 and were therefore taxable as additional guest charges.
Maid Service
5.Q. If a hotel charges $100.00 for a room, and that price includes maid service, what tax
rate applies to the $100.00?
A. The $100.00 charge would be subject to a tax rate of 7%. Since the maid service is a
service provided with the room, it is not an additional guest charge.
6.Q. If a hotel charges $80.00 for a room, and the customer also must pay a mandatory
$20.00 charge for maid service, which may or may not be separately stated, what tax rate
applies to each of the charges?
A. The $80.00 room charge and the $20.00 maid service charge are taxed at 7%. The
maid service is part of the services provided with the room. The fact that it may be
separately charged does not necessarily make the charge an additional guest charge. In
this case the maid service is mandatory, and therefore, the actual charge for the room is
$100.00 which is taxed at 7%.
7.Q. If a rental agency charges $800.00 per week for a condominium unit, and the
customer also must pay a mandatory $50.00 charge for maid service at the end of the
week, what tax rate applies to each of the charges?
A. The $800.00 weekly unit charge and the $50.00 maid service charge are taxed at 7%.
The maid service is part of the services provided with the unit. The fact that it may be
separately charged does not necessarily make the charge an additional guest charge. The
maid service is mandatory, and therefore, the actual charge for the unit is $850.00, which
is taxed at 7%.
8.Q. If a rental agency charges $800.00 per week for a condominium unit, and the
customer is required to leave the unit in a clean condition, what tax rate applies to each of
the charges if the customer has the option to have the rental agency clean the unit at the
end of the week for $50.00?
A. The $800.00 weekly unit charge is taxed at 7% and the $50.00 maid service charge is
taxed at 6%. The $50.00 optional maid service is provided over and above the services
provided with the unit. The $50.00 is therefore an additional guest charge subject to the
tax at 6%.

6

9.Q. If a rental agency charges $800.00 per week for a condominium unit, a mandatory
$50.00 charge for maid service at the end of the week, and the customer has the option to
receive daily maid service for $20.00 a day, what tax rate applies to each of the charges?
A. The $800.00 weekly unit charge and the $50.00 maid service charge are taxed at 7%.
The maid service is part of the services provided with the unit. The maid service is
mandatory, and therefore, the actual charge for the unit is $850.00, which is taxed at 7%.
The $20.00 optional maid service is provided over and above the services provided with
the unit. The $20.00 is therefore an additional guest charge subject to the tax at 6%.
In-room Movies
10.Q. If a hotel charges $100.00 for a room, and that price includes the in-room movies at
no extra charge, what tax rate applies to the $100.00?
A. The $100.00 charge would be subject to a tax rate of 7%. The availability of in-room
movies is a part of the services offered and provided with the room for the $100.00.
Therefore, it is not an additional guest charge.
11.Q. If a hotel charges $80.00 per day for a room, and the customer is also charged a
mandatory fee of $5.00 per day for in-room movies (whether or not the guest watches any
movies), what tax rate applies to each of the charges?
A. The $80.00 room charge and the mandatory $5.00 in-room movie charge are taxed at
7%. The availability of in-room movies is a part of the services offered and provided with
a room. The $5.00 is charged whether or not the guest watches the movies. Therefore, it
is not an additional guest charge when the charge is based on a per day rate and the guest
is charged whether or not the movies are watched.
12.Q. If a hotel charges $80.00 per day for a room, and the customer is also charged
$7.00 for each in-room movie he watched, what tax rate applies to each of the charges?
A. The $80.00 room charge is taxed at 7%. The $7.00 movie charge is taxed at 6%. The
availability of in-room movies is a part of the services offered and provided with a room;
however, the charge for viewing a movie is over and above the customary charge for the
room. Guests expect to pay a charge for each movie viewed. Therefore, the $7.00 is an
additional guest charge when the charge is based on a separate charge for watching the
movie. The tax on this additional guest charge is the liability of the hotel, regardless of
whether or not service is being provided by a third party or the hotel itself.
Meals
13.Q. If a hotel charges $100.00 for a room, and that price includes a continental
breakfast for the guest, what tax rate applies to the $100.00?

7

A. The $100.00 charge is taxed at 7%. Since the continental breakfast is provided with
the room, it is not an additional guest charge. (The withdrawal of the food from the
hotel's inventory is subject to the sales tax based on its fair market value. See Code
Section 12-36-90 and Code Section 12-36-110.)
14.Q. If a hotel charges $100.00 for a room, and also charges the guest a separately stated
$20.00 "club" fee, what tax rate applies to each of the charges? (The "club" fee, for that
extra $20.00, provides the guest access to a buffet meal that is not available to other
guests.)
A. The Department, in Decision #92-32, held that the separately stated charge of $20.00
was not part of the charge for the room but a retail sale of the meal to the guest.
Therefore, the charges are taxed as follows: 7% tax applies to the $100.00 charge for the
room and 6% tax applies to the $20.00 charge for the meal. The meal is not taxed as an
additional guest charge under Code Section 12-36-920(B) since it is otherwise taxed at
6% under Chapter 36--Code Section 12-36-910 and Code Section 12-36-1110.
Linens
15.Q. If a rental agency charges $800.00 per week for a condominium unit, and the
customer has the option to rent linens for $50.00 for the week, what tax rate applies to
each of the charges?
A. The $800.00 weekly unit charge is taxed at 7%. The rental of the linens is optional and
not part of the services provided with the unit for the $800.00 charge. The $50.00 rental
of the linens is not an additional guest charge since the rental charge for the linens is a
sale of tangible personal property and is otherwise taxed at 6% under Chapter 36--Code
Section 12-36-910 and Code Section 12-36-1110.
Golf and Other Tourist Packages
16.Q. If a hotel has a "golf package" for $100.00 per night, and the customer is entitled to
a room at the hotel, one round of golf at a golf course at no extra charge, and a meal at no
extra charge, what tax rate applies?
A. The $100 charge would be subject to the 7% tax, except any portion forwarded to the
golf course for payment of the green fee and any portion forwarded to the restaurant for
payment of the meal. However, see the one exception in the "Note" in Example #1.
The following examples best explain this answer:
Example #1: The hotel receives $100 from the guest for the golf package. The hotel pays
the golf course $30 for the guest's green fee and pays the restaurant $5 for the guest's
meal.

8

The hotel would be liable for the 7% tax on $65 ($100 - $35). The golf course would be
liable for the 6% admissions tax on $30 and the restaurant would be liable for 6% sales
tax on the sale of the meal. This calculation must be made on a guest by guest basis. In
other words, the 7% tax due will be determined for each guest by multiplying 7% by the
total charge for the package less the portion forwarded to the golf course for payment of
the green fee and the portion forwarded to the restaurant for payment of the meal.
Note: If the hotel's guest is unable to play golf that day ("No-Show") (but still received
the meal), and under terms of the golf package the guest will not be required to pay the
"green fee portion" of the package, the hotel would be liable for the 7% tax on the
amount it received from the guest less the amount paid by the hotel to the restaurant. For
example, if the hotel determined that the "green fee portion" of the $100 package was $30
and required the guest to only pay $70 for that day, then the hotel would be liable for the
7% tax on $65 and the restaurant would be liable the 6% sales tax on the sale of meal.
If the hotel's guest is unable to play golf that day ("No-Show") (but still received the
meal), and under terms of the golf package the guest must still pay the hotel the full $100,
the hotel would be liable for the 7% tax on the "accommodations portion" of the package.
The golf course would not be liable for the 6% admissions tax since the guest did not
play golf and the golf course did not receive an admissions fee from the hotel. However,
the hotel is liable for the 6% tax on the other portion of the $100 paid by the guest since it
now represents an additional guest charge for the service of making the golf
arrangements that were not used. This additional guest charge will be equal to the green
fee that the hotel would have had to pay to the golf course. In other words, if the hotel
would have been required to pay $30 had the guest played golf, then the additional guest
charge would be $30. As such, the hotel would be liable for the 7% tax on $65 and the
6% tax (as an additional guest charge for the service) on $30 and the restaurant would be
liable for the 6% sales tax on the sale of the meal.
Example #2: The hotel receives $100 from the guest for the golf package. The hotel pays
the restaurant $5 for the guest's meal. The hotel has an agreement with the golf course to
pay the golf course $30 for the guest's green fee. When a guest does play golf, the hotel
pays the $30; however, the hotel will receive money back from the golf course at a later
date to help pay for the hotel's advertisements of its golf packages.
The hotel would be liable for the 7% tax on $65 ($100 - $35). The golf course would be
liable for the 6% admissions tax on $30 and the restaurant would be liable for the 6%
sales tax on the sale of the meal. The fact that the hotel will receive a portion of the
money back in the future does not affect the taxation of the charges. It is merely an
expense of the golf course that is paid to the hotel.
Notes: 1. To ensure the 7% tax is not circumvented by sending most of the package
charge to the golf course and then later having a large portion of it returned to the hotel as
"advertising," the amount paid to the golf course and returned to the hotel to pay for
advertising must be reasonable and supported by the books and records of both taxpayers.

9

Otherwise, the Department will assess taxes according to a reasonable breakdown of
room charges, green fees, and meal charges.

2. Other tourist packages, such as tennis, honeymoon, and entertainment packages,
   handled in a similar manner would be taxed in the manner described above for golf
   packages.
   Bike Rentals
   17.Q. If a hotel charges $100.00 per night for a room, and the customer has the option to
   rent a bike to travel around the resort area for $10.00 a day, what tax rate applies to each
   of the charges?
   A. The $100.00 hotel charge is taxed at 7%. The rental of the bike is optional and not part
   of the services provided with the room for the $100.00 charge. The $10.00 is not an
   additional guest charge since the rental charge for the bike is a sale of tangible personal
   property and is otherwise taxed at 6% under Chapter 36.
   18.Q. If a hotel charges $100.00 per night for a room, and the hotel allows the guest to
   reserve a bike at no extra charge to travel around the resort, what tax rate applies to the
   charge?
   A. The $100.00 hotel charge is taxed at 7%. The availability of the bike is a part of the
   services provided with the room for the $100.00 charge and is therefore not an additional
   guest charge.
   Newspapers
   19.Q. If a hotel charges $80.00 for a room, and the guest receives a newspaper that is
   delivered to the guest's door in the morning, what tax rate applies to the charge?
   A. The $80.00 room charge is taxed at 7%. The newspaper is not an additional guest
   charge since the newspaper is part of the services provided with the room for the $80.00
   charge.
   20.Q. If a hotel charges $80.00 for a room, and the customer is charged $2.00 for a
   newspaper that is delivered at the guest's request, what tax rate applies to each of the
   charges?
   A. The $80.00 room charge is taxed at 7%, while the charge for the newspaper, as an
   additional guest charge, is taxed at 6%. The newspaper that is provided for $2.00 is over
   and above the services customarily provided with the room at the hotel.

10

Valet Parking
21.Q. If a hotel charges $80.00 for a room, and there is no additional charge to the
customer for valet parking, what tax rate applies to the charge?
A. The $80.00 room charge is taxed at 7%.
22.Q. If a hotel charges $80.00 for a room, and the customer is also charged $15.00 for
valet parking, what tax rate applies to each of the charges?
A. The $80.00 room charge is taxed at 7%, while the $15.00 charge for the valet parking,
as an additional guest charge, is taxed at 6%.
23.Q. If a person is not a guest at a hotel, but is attending an event at the hotel, is a $15.00
charge for valet parking subject to the tax as an additional guest charge?
A. The $15.00 charge for valet parking is not subject to the sales tax. It is not an
additional guest charge since, in order to be taxable, the charge must be in addition to a
room rental charge. This charge is not in addition to another charge.
Meeting Rooms
24.Q. If a hotel charges $80.00 for a guest room, and there is no additional charge to the
customer for the use of a meeting room, what tax rate applies to the charge?
A. The $80.00 guest room charge is taxed at 7%.
25.Q. If a hotel charges $80.00 for a guest room, and the customer is also charged $35.00
for the use of a meeting room, what tax rate applies to each of the charges?
A. The $80.00 guest room charge is taxed at 7%, while the $35.00 charge for the meeting
room, as an additional guest charge, is taxed at 6%.
26.Q. Is a $35.00 charge for the use of the meeting room by a person who is not a guest at
the hotel, subject to the tax as an additional guest charge?
A. The $35.00 charge for the meeting room is not subject to the sales tax. It is not an
additional guest charge since, in order to be taxable, the charge must be in addition to a
room rental charge.
This charge is not in addition to another charge.
Note: If the meeting room is being rented by an organization that is conducting a seminar,
workshop, conference, or similar meeting at the hotel, the charge for the meeting room is
taxed at 6% as an additional guest charge if the organization is also renting guest rooms
at the hotel for officers or members of the organization, invited speakers, or others.

11

Other Services
27.Q. If a hotel charges $100.00 for a room, and the room contains a refreshment bar so
the guest may avail himself of alcoholic drinks, non-alcoholic drinks, or snacks at no
extra cost, what tax rate applies to the $100.00?
A. The $100.00 room charge is taxed at 7%.
28.Q. If a hotel charges $80.00 for a room, and the room contains a refreshment bar so
the guest may avail himself of alcoholic drinks, non-alcoholic drinks, or snacks at a set
price per item, what tax rate applies to each of the charges?
A. The $80.00 room charge is taxed at 7%, while the charges for each item the guest
consumes from the refreshment bar is taxed at a rate of 6% as a sale of tangible personal
property under Code Section 12-36-910 and Code Section 12-36-1110. These charges are
not additional guest charges since they are "otherwise taxed" under Chapter 36.
Cancellations
29.Q. If a person reserves and pays for sleeping accommodations at a hotel, but does not
cancel the reservation or does not cancel the reservation by the prescribed time set by the
hotel, is the charge for the accommodations retained by the hotel subject to the tax even
though he will not use the sleeping accommodations?
A. While the sleeping accommodations were not used, the person had the right to use
such sleeping accommodations. Therefore, the sleeping accommodations were
"furnished" and the charge by the hotel for such sleeping accommodations is subject to
the tax. See Question #30 for information concerning when accommodations are canceled
but an administrative fee or deposit is charged or retained.
30.Q. If a person makes reservations with a hotel for sleeping accommodations, but the
reservations are canceled by such person or by the hotel, is an administrative fee or
deposit charged or retained by the hotel as a result of the cancellation subject to the tax?
A. An administrative fee or deposit retained or charged by a hotel when reservations for
sleeping accommodations are canceled is not subject to the sales tax.
Note: See Question #29 for information concerning when accommodations are canceled
or otherwise not used but a charge for the sleeping accommodations is made or retained
by the hotel. See also Question #16, Example #1 Note, for the taxation of a tourist
package when sleeping accommodations are furnished but the guest does not use a
portion of the package (i.e. the guest pays for a golf package but does not play golf).
Note: This regulation references tax rates of 7% for the sales tax on accommodations, 6%
for the sales tax on additional guest charges, and 6% for the sales tax on sales or rentals
of tangible personal property. Counties may now impose several types of local option

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sales and use taxes as well as other local taxes imposed upon the furnishing of
accommodations and the sale of prepared meals. Some of these taxes are collected by the
Department of Revenue on behalf of the county imposing the tax and others are collected
by the county itself.
Fiscal Impact Statement:
There will be no impact on state or local political subdivisions expenditures in complying
with this proposed legislation. There will be a minimal increase to general fund
collections.
Statement of Rationale:
The purpose of this proposal is to amend SC Regulation 117-307 and SC Regulation 117307.1 to change the 5% tax rate to the new 6% tax rate with respect to additional guest
charges at places providing sleeping accommodations under Code Section 12-36-920(B)
and all other sales of tangible personal property at a place providing sleeping
accommodations. The proposal to amend SC Regulation 117-307 and SC Regulation
117-307.1 is needed to reduce any taxpayer confusion that may result from having a
published regulation that is in conflict with the law. The proposal to amend SC
Regulation 117-307 and SC Regulation 117-307.1 is also reasonable in that it is the
department’s responsibility to maintain regulations that are up-to date and consistent with
the law. The regulation would be effective on June 1, 2007 – the effective date of the 6%
tax rate.

13

Document No. 3159
DEPARTMENT OF REVENUE
CHAPTER 117
Statutory Authority: 1976 Code Section 12-4-320
117-307.3. Accommodation
Synopsis:
The South Carolina Department of Revenue is considering amending SC Regulation 117307.3 concerning the application of the sales and use tax to the rental or charges for any
rooms, lodgings or accommodations furnished to transients by any hotel, inn, tourists
court, motel, residence, or any place in which rooms, lodgings or accommodations are
furnished to transients for a consideration and the exception for facilities that consist of
less than six sleeping rooms, contained on the same premises, which is used as the place
of abode of the owner or operator of such facilities. This regulation specifically concerns
the exception and provides examples to illustrate when the exception does and does not
apply.
It has been the longstanding position of the Department that in order for the exception to
apply, the facility must serve as the owner’s or operator’s “place of abode” during the
same times at which the remaining sleeping rooms are rented to transients and the rooms
must not be rented to transients by a person other than the owner or operator using the
facility as his or her “place of abode.”
The purpose of this regulation is to incorporate this longstanding position in this
regulation and to provide examples to assist taxpayers in understanding this exception for
a facility that consists of less than six sleeping rooms, contained on the same premises,
which is used as the place of abode of the owner or operator of the facility.
Instructions:
Amend SC Regulation 117-307.3 concerning the application of the sales and use tax to
the rental or charges for any rooms, lodgings or accommodations furnished to transients
by any hotel, inn, tourists court, motel, residence, or any place in which rooms, lodgings
or accommodations are furnished to transients for a consideration and the exception for
facilities that consist of less than six sleeping rooms, contained on the same premises,
which is used as the place of abode of the owner or operator of such facilities.
Text:
117-307.3. Certain Facilities Not Subject to the Tax.
(A) The tax applies to the gross proceeds from the rental or charges for any rooms,
lodgings or accommodations furnished to transients by any hotel, inn, tourists court,
motel, residence, or any place in which rooms, lodgings or accommodations are furnished

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to transients for a consideration, except where such facilities consist of less than six
sleeping rooms, contained on the same premises, which is used as the place of abode of
the owner or operator of such facilities. For this exception to apply, the facility must
serve as the owner’s or operator’s “place of abode” during the same times at which the
remaining sleeping rooms are rented to transients and the rooms must not be rented to
transients by a person other than the owner or operator using the facility as his or her
“place of abode.” See subsection C below.
Examples illustrate some of the situations as to when the exception applies or
does not apply to an individual renting sleeping accommodation at a home with less than
six sleeping rooms to a transient for less than 90 continuous days (See subsection B
below).
(1) W owns a home with less than six sleeping rooms and lives in the home
throughout the year. He operates this home as a “bed and breakfast” by renting the
remaining sleeping rooms to vacationers on a daily or weekly basis. W rents these rooms
to vacationers himself and does not employ the services of a real estate agent or broker.
The rentals by W of these rooms to vacationers qualify for the exception in the
statute; therefore, the rental charges paid to W by the vacationers are not subject to the
sales tax on accommodations under Code Section 12-36-920.
(2) X owns a home with less than six sleeping rooms and uses the home only for
one or two weeks a year for family vacations. She rents the home to vacationers during
the rest of the year on a weekly basis. She rents it herself and does not employ the
services of a real estate agent or broker.
The rentals by X of the home to vacationers do not qualify for the exception in the
statute; therefore, the rental charges paid to X by the vacationers are subject to the sales
tax on accommodations under Code Section 12-36-920.
(3) Y owns a home with less than six sleeping rooms and lives in the home
throughout the year. He operates this home as a “bed and breakfast” by renting the
remaining sleeping rooms to vacationers on a daily or weekly basis. However, Y never
rents these rooms to vacationers himself. He employs the services of a real estate agent
who rents the remaining sleeping rooms for him.
The rentals by the real estate agent of these rooms to vacationers for Y do not
qualify for the exception in the statute; therefore, the rental charges paid to the real estate
agent by the vacationers are subject to the sales tax on accommodations under Code
Section 12-36-920 with the real estate agent liable for the tax.
(4) Z owns a home with less than six sleeping rooms and lives in the home
throughout the year. He operates this home as a “bed and breakfast” by renting the
remaining sleeping rooms to vacationers on a daily or weekly basis. He employs the

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services of a real estate agent who rents the remaining sleeping rooms for him. However,
sometimes Z rents these remaining rooms to vacationers himself.
The rentals by the real estate agent of these rooms to vacationers for Z do not
qualify for the exception in the statute; therefore, the rental charges paid to the real estate
agent by the vacationers are subject to the sales tax on accommodations under Code
Section 12-36-920 with the real estate agent liable for the tax.
The occasional rentals by Z of these rooms to vacationers qualify for the
exception in the statute; therefore, the rental charges paid to Z by the vacationers are not
subject to the sales tax on accommodations under Code Section 12-36-920.
(B) The gross proceeds derived from the lease or rental of accommodations supplied to
the same person for a period of 90 continuous days shall not be considered proceeds from
transient.
(C) Real estate agents, brokers, corporations or listing services leasing or renting
accommodations, whether owned by them or others, to persons for periods of less than 90
continuous days are retailers liable for the sales tax on accommodations.
Fiscal Impact Statement:
There will be no impact on state or local political subdivisions expenditures in complying
with this proposed legislation. There will be a minimal increase to general fund
collections.
Statement of Rationale:
The purpose of this regulation is to incorporate this longstanding position in this
regulation and to provide examples to assist taxpayers in understanding this exception for
a facility that consists of less than six sleeping rooms, contained on the same premises,
which is used as the place of abode of the owner or operator of the facility.

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Document No. 3164
DEPARTMENT OF REVENUE
CHAPTER 117
Statutory Authority: 1976 Code Section 12-4-320
117-329. Communications Services
Synopsis:
The South Carolina Department of Revenue is considering amending SC Regulation 117329 concerning the application of the sales and use tax to communications services. The
purpose of this regulation is to summarize longstanding Department opinion concerning
the taxability of various communications services and to attempt to list as many
communications services as possible that the Department has held in the past as subject to
the tax, whether through formal advisory opinions, audits or informal advice provided to
taxpayers. For example, the Department has taxed communications services such as
telephone services, paging services, answering services, cable television services, satellite
programming services (includes, but is not limited to, emergency communication services
and television, radio, music or other programming services), fax transmission services,
voice mail messaging services, e-mail services, and database access transmission services
(on-line information services), such as legal research services, credit reporting/research
services, and charges to access an individual website. Communication technology is
expanding every day. As such, new and emerging technologies will make available to
consumers many new communications services in the future. The Department will
continue to review such communications services on a case-by-case basis. For a detailed
discussion of the statute, see Department advisory opinion SC Revenue Ruling #06-8.
Instructions:
Amend SC Regulation 117-329 concerning the application of the sales and use tax to
communications services. The purpose of this regulation is to summarize longstanding
Department opinion concerning the taxability of various communications services and to
attempt to list as many communications services as possible that the Department has held
in the past as subject to the tax, whether through formal advisory opinions, audits or
informal advice provided to taxpayers.
Text:
117-329

Communications Services

The purpose of this regulation is to provide guidance as to the application of the sales and
use tax to the wide variety of communications services available to individual consumers
and to businesses. It also lists examples of communication services that are or are not
subject to the tax. Charges for other communications services not listed in this regulation
are still subject to the tax if they constitute charges for the ways or means for the
transmission of the voice or messages and are not otherwise exempted under the law.

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117-329.1 Ways or Means for Transmission of Voice or Messages
Communications are subject to sales and use taxes pursuant to Code Sections 12-36910(B)(3) and 12-36-1310(B)(3), which impose the tax on the “gross proceeds accruing
or proceeding from the charges for the ways or means for the transmission of the voice or
messages, including the charges for use of equipment furnished by the seller or supplier
of the ways or means for the transmission of the voice or messages.”
“Charges for the ways or means for the transmission of the voice or messages” is defined
to include, but is not limited to, charges for access to, or use of, a communication system
(the manner, method or instruments for sending or receiving a signal of the voice or of
messages), whether this charge is based on a fee per a specific time period or per
transmission or any other method.
117-329.2 Prepaid Wireless Calling Arrangements
Code Section 12-36-910(B)(5) and Code Section 12-36-1310(B)(5) impose the sales and
use tax on the “gross proceeds accruing or proceeding from the sale or recharge at retail
for prepaid wireless calling arrangements.”
“Prepaid wireless calling arrangements” means communication services that (i) are used
exclusively to purchase wireless telecommunications; (ii) are purchased in advance; (iii)
allow the purchaser to originate telephone calls by using an access number, authorization
code, or other means entered manually or electronically; and (iv) are sold in units or
dollars which decline with use in a known amount.
117-329.3 900/976 Telephone Services
Communications are subject to sales and use taxes pursuant to Code Section 12-36-2645,
which imposes the sales and use tax on the “gross proceeds accruing or proceeding from
the business of providing 900/976 telephone service.” However, this code section
imposes the sales and use tax on such communications services at a higher state rate than
the general state sales and use tax rate.
117-329.4 Examples of Taxable Communications Services
The following are examples of communication services that are subject to the sales and
use tax (unless otherwise listed as non-taxable in 117-329.5 or otherwise exempt or
excluded under the law):
(a) Telephone services, including telephone services provided via the traditional circuitcommitted protocols of the public switched telephone network (“PSTN”), a wireless
transmission system, a voice over Internet protocol (“VoIP”), or any of other method
(b) Teleconferencing Services

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(c) Paging Services
(d) Answering Services
(e) Cable Television Services
(f) Satellite Programming Services and Other Programming Transmission Services,
including, but is not limited to, emergency communication services and television, radio,
music or other programming services
(g) Fax Transmission Services
(h) Voice Mail Messaging Services
(i) E-Mail Services
(j) Electronic Filing of Tax Returns when the return is electronically filed by a person
who did not prepare the tax return
(k) Database Access Transmission Services or On-Line Information Services,
including, but not limited to, legal research services, credit reporting/research services,
and charges to access an individual website (including Application Service Providers)
(l) Prepaid Wireless Calling Arrangements (sale or recharge at retail) as defined
in Code Section 12-36-910(B)(5)
(m) 900/976 Telephone Service
117-329.5 Examples of Non-Taxable Communications Services
The following are examples of communication services are not subject to the sales and
use tax:
(a) Telephone services specifically exempted under Code Section 12-36-2120(11), such
as toll charges between telephone exchanges and carrier access charges and customers
access line charges established by the Federal Communications Commission or the South
Carolina Public Service Commission
(b) Telegraph Messages exempt under Code Section 12-36-2120(11)
(c) Communication Services involving Automatic Teller Machines exempt under Code
Section 12-36-2120(11)
(d) Data Processing Services as defined under Code Section 12-36-910(C)

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(e) Computer Database Information Services provided by a cooperative service when
the database information has been assembled by and for the exclusive use of the members
of the cooperative services excluded from the tax under Code Section 12-36-60
(f) Electronic Filing of Tax Returns when the return is electronically filed by a person
who prepared the tax return
(g) Other charges specifically exempt from the tax under State law or federal law
Fiscal Impact Statement:
There will be no impact on state or local political subdivisions expenditures in complying
with this proposed legislation. There will be a minimal increase to general fund
collections.
Statement of Rationale:
The purpose of this regulation is to amend SC Regulation 117-329 concerning the
application of the sales and use tax to communications services. The regulation
summarizes longstanding Department opinion concerning the taxability of various
communication services and attempts to list as many communications services as
possible that the Department has held in the past as subject to the tax, whether through
formal advisory opinions, audits or informal advice provided to taxpayers.

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