How does South Carolina's accommodations tax apply to a hotel 'golf package' that bundles lodging, greens fees, and a meal for one price?

Plain-English summary

A hotel that sells a bundled golf package — lodging, greens fees, and a meal for a single price — can't just tax the whole thing at one rate. Revenue Ruling 88-2 explains how to split the package after a 1987 change to South Carolina's accommodations tax.

The background: South Carolina taxed transient accommodations at a combined 7% (a 4% sales/use/license tax under § 12-35-1120, a 1% Education Improvement Act tax under § 12-35-515, and an additional 2% under § 12-35-710), all billed to the guest as a single "tax" line. Effective June 22, 1987, the legislature amended § 12-35-710 to exclude "meals and other special items in promotional tourist packages" (and meeting-room rentals) from that additional 2%. Before the change, a one-price golf package was simply taxed at 7% of the whole amount; the amendment forced a new, component-by-component calculation.

The Commission's answer: the hotel must predetermine and keep on file a breakdown of the package. On that breakdown, the room rental is taxed at the full 7% accommodations tax; the meal and any mandatory gratuity are taxed at the 5% sales tax; and the greens fees are not subject to sales tax but are subject to the admissions tax. The customer's invoice can still show a simple "Room Rental / Golf Package / Tax" summary, but the underlying allocation (with effective dates for each priced item) has to be documented.

Who owes which tax depends on who provides the service. If the hotel furnishes the meal, the hotel owes the sales tax on it; if an independent restaurant provides it, that restaurant is liable and the hotel merely passes through the money it collects. The same logic applies to greens fees: an independent golf course is liable for the admissions tax on the greens fees, with the hotel passing the funds through.

What this means for you

Hotels and resorts selling bundled packages

The core compliance duty from this ruling is documentation: keep a predetermined breakdown of every package showing what portion is room, meal/gratuity, and greens fee (or other activity), and the effective dates of those prices. Tax each piece under the correct tax — lodging under the accommodations tax, food under the sales tax, and golf/greens fees under the admissions tax — rather than applying one blended rate to the bundle.

Pass-through arrangements with restaurants and courses

If you contract out the meal or the golf, be clear about liability. The provider that actually furnishes the meal (restaurant) or the golf (course) is the taxpayer for that component's tax. The hotel collects the corresponding amount from the guest and passes it through to that provider, so the pass-through amounts on your breakdown should equal what you pay the restaurant or course.

A note on current law

The specific rates and section numbers here are from 1987–88 and were later recodified into Title 12, Chapter 36. Use this ruling for the method — unbundle the package and tax each part under its own tax — but confirm the current rates, exemptions, and code sections before relying on any figure.

Common questions

Q: Can I just tax the whole golf package at the accommodations-tax rate?
A: No. After the 1987 amendment, meals and other special items in a promotional tourist package are excluded from the additional 2% accommodations tax, so the package must be split and each component taxed under its own tax.

Q: How is each part taxed?
A: In the ruling's framework, the room rental is taxed at 7% (accommodations tax), the meal and mandatory gratuity at 5% (sales tax), and greens fees under the admissions tax — not the sales tax.

Q: The restaurant and golf course are separate businesses. Who pays the tax?
A: The business that actually provides the meal or the golf is liable for that component's tax. The hotel collects the money from the guest and passes it through to that provider.

Q: What records do I need?
A: A predetermined breakdown of the package kept on file, showing each component, its price, the effective dates, and the pass-through amounts.

Citations and references

Statutes (as cited in the 1988 ruling):

• S.C. Code Ann. § 12-35-710 (amended June 2, 1987) — additional 2% accommodations tax; excludes meals and other special items in promotional tourist packages and meeting-room rentals
• S.C. Code Ann. § 12-35-1120 — 4% sales/use/license tax on accommodations furnished to transients
• S.C. Code Ann. § 12-35-515 — additional 1% Education Improvement Act tax on accommodations

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: RR88-2.pdf

Original ruling text

SC REVENUE RULING #88-2

SUBJECT:

Accommodations Tax - Golf Packages

EFFECTIVE DATE:

February 25, 1988

SUPERSEDES:

All previous documents and any oral directives in conflict
herewith.

REFERENCE:

S.C. Code Ann. Section 12-35-710 (Amended 6-2-87)

AUTHORITY:

S.C. Code Ann. Section 12-3-170 (1976)
SC Revenue Procedure #87-3

SCOPE:

A Revenue Ruling is the Commission's official interpretation of
how tax law is to be applied to a specific set of facts. A Revenue
Ruling is public information and remains a permanent document
until superseded by a Regulation or is rescinded by a subsequent
Revenue Ruling.

Question:
As a result of the amendment to Section 12-35-710, effective June 22, 1987, how should the
accommodations tax be applied to hotel golf packages, which include lodging, greens fees, and a
meal for one price?
Facts:
Effective June 22, 1987, Section 12-35-710 was amended to exclude "meals and other special
items in promotional tourist packages or the rental of meeting rooms" from the 2 percent
accommodations tax.
Discussion:
The four percent tax on accommodations furnished transients was enacted in 1955 (Act 234).
That act, now codified as Section 12-35-1120, presently imposes the sales, use or license tax on
the "gross proceeds derived from the rental or charges for...accommodations furnished to
transients."

1

In 1984 (Act 412 effective July 1, 1984) the Education Improvement Act (EIA) imposed an
additional one percent tax on accommodations. That act was codified as Section 12-35-515.
Pursuant to Act 316 of 1984, Section 12-35-710 became effective July 1, 1984. This section
"imposed an additional sales tax of 2 percent of the gross proceeds from the rental of transient
accommodations...." It also required that the tax under Sections 12-35-1120 (4 %), 12-35-515
(1%) and 12-35-710 (2%) be "billed and paid in a single tax item listed as `tax' without itemizing
the two taxes as separate items."
Previously, when a one-price tourist package for golf was billed to a guest, the hotel was
required to remit the tax based on 7 % of the total package. The new provision now excludes
"meals and other special items" from the 2% accommodations tax and requires a new method of
calculating the tax.
As an example, the customer's invoice may show:
Room Rental
Golf Package
Tax

$26.00
20.86
2.14

Total Due

$49.00

However, the hotel should maintain the following breakdown for this package in its records:
One Day Room/Golf Package *
Room Rental
(A) Tax (7%)
Breakfast
Mandatory Gratuity
(B) Tax (5%)
Greens Fee

$26.00
1.82
5.50
.83
.32
14.53

Total Due

$49.00

• Prices Effective: Sept. 1, 1987 to Dec. 31, 1987
  Each breakdown, as shown above, should indicate the effective dates of the package items and
  related charges. The tax noted as (A) is the 7 % tax on the room rental. The tax noted as (B) is
  the 5% sales tax on the meal and mandatory gratuity. Charges for greens fees are not subject to
  the sales tax, however, they are subject to the admissions tax.
  The sales tax on meals and gratuities is imposed on the hotel only if the hotel provides the meals.
  If the hotel contracts with an independent restaurant to provide meals, then the independent
  restaurant will be held liable for the sales tax. In our example, assuming the hotel did not have a
  restaurant, the amounts charged for breakfast and gratuities ($6.33) should be collected by the
  hotel and "passed through" to the restaurant.

2

The same would be the case for greens fees ($14.53) charged by an independent golf course. The
golf course would be held liable for the admissions tax, not the hotel.
Conclusion:
In summary, the components of the package should be predetermined and maintained on file by
the hotel. In cases where the hotel contracts with an independent restaurant and/or golf course,
the amounts shown on the "Room/Golf Package" breakdown for meals and greens fees must be
"pass throughs" and equal the amounts paid by the hotel to the restaurant and/or golf course.
(Feb. 25, 1988)

SOUTH CAROLINA TAX COMMISSION

s/S. Hunter Howard, Jr.
S. Hunter Howard, Jr., Chairman

s/John M. Rucker
John M. Rucker, Commissoiner

s/A. Crawford Clarkson Jr.
A. Crawford Clarkson, Jr., Commissioner

Columbia, South Carolina
February 25
, 1988

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