S.C. Code Regs. 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.
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?
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%. The maid service is a service provided
with the room and is, therefore, part of the room charge that is subject to the tax at 7%.
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
make it a charge for a separate service. 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 make it a charge for a separate service. 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 not subject
to the sales tax. The $50.00 optional maid service is provided over and above the services provided
with the unit, but it is not an additional guest charge under the statute. The $50.00 is therefore not
subject to the tax.
9.Q. If a rental agency charges $800.00 per week for a condominium unit, plus 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, but it is not an additional guest charge
under the statute. The $20.00 is therefore not subject to the tax.
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.
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?
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 Commission 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. Based on the Department's longstanding administrative policy concerning tourist packages, 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 longstanding administrative policy:
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.
The hotel would be liable for the 7% tax on $65 ($100 - $35). The golf course would be liable for the
5% 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 the 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 5% 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 not liable for the 6% tax on the other portion of
the $100 paid by the guest since it does not represent an additional guest charge for the service of
making the golf arrangements that were not used. This amount, however, must be equal to the green
fee that the hotel would have had to pay to the golf course in order for the entire charge not to be
subject to the 7% tax. In other words, if the hotel would have been required to pay $30 had the guest
played golf, then the $30 that would have been, but was not, sent to the golf course is not subject to the
sales tax. As such, the hotel would be liable for the 7% tax on $65 and the restaurant would be liable
for the 6% sales tax on the sale of the meal. The $30 that would have been, but was not, sent to the golf
course is not subject to either the sales tax or the admissions tax.
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
5% 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. 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.
However, 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.
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%.
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%. The newspaper is not an additional guest charge since it
is not one of the services specifically listed in the statute as an ''additional guest charge.'' The
newspaper that is provided for $2.00 is the sale of tangible personal property; however, sales of
newspapers are exempt from the sales tax under Code Section 12-36-2120(8).
Note: Room service is generally considered a service provided to a guest that allows the guest to
order food or drink that will be bought to the guest's room. As such, newspapers brought to a guest's
room do not fall within the customary definition of room service. Therefore, the $2 charge to the guest
for the newspaper is not an additional guest charge.
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 is not an
additional guest charge and is not 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.
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.
Room Refreshment Bar or Refrigerator
27.Q. If a hotel charges $100.00 for a room, and the room contains a refreshment bar so that 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 that 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.
Safes
29.Q. If a hotel charges $100.00 for a room, and that price includes the room and use of the safe in
the room, 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 safe is a part of the
services offered and provided with the room for the $100.00.
30.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 safe in the room, what tax rate applies to each of the charges?
A. The $80.00 room charge and the $5.00 charge for the safe are taxed at 7%. The availability of a
safe is a part of the services offered and provided with a room. The $5.00 is charged whether or not
the guest uses the safe.
31.Q. If a hotel charges $80.00 per day for a room, and the customer is also charged $5.00 if the
guest uses the safe in the room, what tax rate applies to each of the charges?
A. The $80.00 room charge is taxed at 7%. The $5.00 charge for actually using the safe is not
subject to the tax. The availability of a safe is a part of the services offered and provided with the room;
however, the use of the safe is over and above the services customarily provided with the room. In this
case, guests expect to pay a charge for use of the safe. Therefore, the $5.00 charge is not a part of the
room charge. It is a charge for a service that is not an additional guest charge under the statute, and
therefore, not subject to the tax.
Other Charges (Pet Fees, Smoking Fees, Damage Fees. and Late Check-Out Fees)
32.Q. If a hotel charges $100.00 for a room and also charges an additional fee of $20 for having a
pet in the room, what tax rate applies to each of the charges?
A. The $100.00 charge and the $20 charge are taxed at 7%. The pet fee is neither a charge for a
service nor an additional guest charge. It is a mandatory charge for having a pet in the room;
therefore, the actual charge for the room is $120.
Note: Federal Regulation concerning Service Dogs - Under Federal Regulation 28 C.F.R.
36.302(c)(8), a place of accommodation (as defined in Federal Regulation 28 C.F.R. 36.104), such as an
inn, hotel or motel, ''shall not ask or require an individual with a disability to pay a surcharge, even if
people accompanied by pets are required to pay fees, or to comply with other requirements generally
not applicable to people without pets.''
33.Q. If a hotel charges $100.00 for a room and also charges an additional fee of $20 for a room in
which the guest is allowed to smoke cigarettes, cigars and other smoking tobacco, what tax rate applies
to each of the charges?
A. The $100.00 charge and the $20 charge are taxed at 7%. The smoking room fee is neither a
charge for a service nor an additional guest charge. It is a mandatory charge for a smoking room;
therefore, the actual charge for the room is $120.
34.Q. If a hotel charges $100.00 for a room and also charges an additional fee of $35 if a guest
smokes cigarettes, cigars and other tobacco in a non-smoking room, what tax rate applies to each of the
charges?
A. The $100.00 charge and the $35 charge are taxed at 7%. The fee for smoking in a non-smoking
room is neither a charge for a service nor an additional guest charge. It is a mandatory charge for
smoking in a non-smoking room; therefore, the actual charge for the room is $135.
35.Q. If a hotel charges $100.00 for a room and also charges an additional fee of $35 if a guest
damages the room, what tax rate applies to each of the charges?
A. The $100.00 charge and the $35 charge are taxed at 7%. The damage fee is neither a charge for
a service nor an additional guest charge. It is a mandatory charge for causing damage to the room;
therefore, the actual charge for the room is $135.
36.Q. If a hotel charges $100.00 for a room and also charges an additional fee of $15 if a guest
checks out late (past the specified time for check-out), what tax rate applies to each of the charges?
A. The $100.00 charge and the $15 charge are taxed at 7%. The late check-out is neither a charge
for a service nor an additional guest charge. It is a mandatory charge for checking out past the
specified time for check-out; therefore, the actual charge for the room is $115.
Cancellations
37.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 #38 for information
concerning when accommodations are canceled but an administrative fee or deposit is charged or
retained.
38.Q. If a person makes reservations with a hotel for sleeping accommodations, but the reserva-
tions 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 #37 for information concerning when accommodations are canceled or other-
wise 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. However, some counties and municipalities impose several types of local option 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.