Claire Dawson
The hospitality tax in South Carolina is a levy imposed on the sale of prepared meals, food, and beverages, including alcoholic drinks, in restaurants, lounges, grocery stores, and other similar establishments. The tax is typically set at 2% of the total gross sales price, although rates may vary across different municipalities within the state. The hospitality tax is collected by the establishments at the point of sale and subsequently remitted to the relevant tax authority, such as the town or city, or the South Carolina Department of Revenue. These taxes are used to fund various projects, including public safety and capital improvement initiatives, and late payments may incur penalties.
| Characteristics | Values |
|---|---|
| Tax rate | 2% on gross proceeds from sales of prepared meals, food, and beverages |
| Tax collection | Collected at the time of payment and held in trust for the city until paid to the Director of Revenue Collections |
| Payment methods | Online with a Customer Self Service (CSS) Account |
| Reporting requirements | Establishments must submit returns to the Revenue Collections Division by the 20th of the month, covering sales of the previous month |
| Late payments | Subject to a penalty of 25% |
| Tax applicability | Applies to sales of prepared meals, food, and beverages, including alcoholic drinks, in specific areas of York County and Charleston |
| Exemptions | Catering, canned or bottled drinks, pre-packaged foods, and certain types of alcohol sold in cans or bottles are exempt |
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What You'll Learn
Hospitality tax rates
The hospitality tax in South Carolina is a levy imposed on the sale of prepared meals, food, and beverages. This includes alcoholic drinks, beer, and wine sold in or by establishments licensed for on-premise consumption. The tax rate is typically 2% of the gross proceeds from these sales, and it is collected from the patron at the time of payment for the meal or beverage. The tax must be held in trust for the benefit of the city until it is paid to the Director of Revenue Collections.
There may be variations in the hospitality tax rate depending on the specific location within South Carolina. For example, in York County, there is a 2% hospitality tax on sales of prepared meals and beverages in unincorporated areas of the county. However, within the city limits of Hickory Grove, McConnells, Sharon, and Smyrna, the hospitality tax rate is 1%.
The hospitality tax is typically the responsibility of the consumer of the services, and it is collected by the provider, who then remits it to the local government. In Charleston, for instance, taxes and reports must be submitted to the Revenue Collections Division by the 20th day of the month, covering the sales of the previous month. Late remittances may be subject to penalties, which can include a 25% fee for untimely payments in Charleston and a 5% penalty per month in York County.
The definition of a prepared meal or beverage, as outlined by York County, includes any food or drink that is prepared or modified by an establishment and is ready for consumption by the public at the time of sale. This includes items such as oven-ready pizzas, sandwiches, hot and cold side dishes, fountain drinks, coffee, tea, and ice cream. However, there are exemptions for certain items, such as catering, canned or bottled drinks, pre-packaged foods, and alcohol sold in cans or bottles.
The hospitality tax serves as a dedicated source of revenue for local governments, providing funds for tourism-related expenditures, capital improvements, and support for local businesses. By implementing this tax, South Carolina aims to promote tourism and enhance the overall experience for visitors, ultimately driving economic growth and benefiting the local community.
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Tax payment methods
The hospitality tax in South Carolina is levied on the consumer of the services, and it is the responsibility of the service provider to collect this tax and remit it to the County when due. The tax is a uniform tax of 2% on the gross proceeds from the sales of prepared meals, food, and beverages, including alcoholic drinks, sold in or by establishments.
The hospitality tax is collected when the customer pays for their meal, food, or beverage, and this money must be held in trust for the city until it is paid to the Director of Revenue Collections. There are a few methods through which these taxes can be remitted:
- In-person Payment: Remittance forms and payments must be made in person at the Treasurer's Office or postmarked by the US Postal Service by the 20th day of the month following the reporting period. For example, taxes collected in January must be paid or postmarked by February 20th. If the 20th falls on a non-working day, then the next working day is considered timely.
- Online Payment: Hospitality taxes can be paid online using a Customer Self Service (CSS) Account. Businesses that don't have a CSS Account login will need to register for one.
- Monthly Reporting: Every establishment subject to the hospitality tax must submit a return to the Revenue Collections Division using forms provided by the office. These forms detail the gross proceeds from the sales of prepared meals, food, and beverages for the previous month, along with the amount of tax due.
It is important to note that late remittances are subject to a 5% penalty per month, based on the original amount of the hospitality tax due.
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Tax payment deadlines
In Charleston, South Carolina, hospitality taxes and reports must be remitted to the Revenue Collections Division by the 20th day of the month, covering sales from the previous month. For example, taxes collected in January must be paid by February 20th. If the 20th falls on a Sunday or postal service holiday, remittance paid or postmarked on the next business day will be considered timely. Taxes not paid on time are subject to a 25% penalty.
In York County, South Carolina, the Local Hospitality Tax remittance forms and payments must be paid in the Treasurer's Office or postmarked by the US Postal Service by the 20th day of the month following the closing of the reporting period. Similar to Charleston, if the 20th falls on a Sunday or postal service holiday, remittance paid or postmarked on the next business day will be accepted as timely. Remittances are considered late if they are paid or postmarked after the due date for the reporting period, and a 5% penalty per month will be charged, based on the original amount of Hospitality Tax due.
In York County, the Local Hospitality Tax is a 2% fee imposed on sales of all prepared meals and beverages sold in establishments located in the unincorporated areas of the county. There is also a 1% fee for establishments within the city limits of Hickory Grove, McConnells, Sharon, and Smyrna. The tax is to be paid at the time of delivery of the services to which it applies and must be collected by the service provider. The liability of paying the tax falls on the consumer of the services.
Hospitality taxes can be paid online with a Customer Self Service (CSS) Account. If an establishment does not have a CSS Account login, they will need to register for one. Every establishment subject to the hospitality tax ordinance must make a return to the Revenue Collections Division on forms provided by the office, outlining the gross proceeds of sales of prepared meals, food, and beverages for the previous month, and the amount of tax due.
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Tax penalties
In Charleston, South Carolina, hospitality taxes and reports must be remitted to the Revenue Collections Division by the 20th day of the month, covering sales from the previous month. Hospitality taxes are levied at a uniform rate of 2% on gross proceeds from the sales of prepared meals, food, and beverages in establishments licensed for on-premises consumption of alcoholic drinks. This includes restaurants, bars, and similar venues.
If an establishment fails to submit the required taxes and reports on time, they will be subject to a penalty. The specific penalty for late submission is a 25% fee on the amount of tax owed. This penalty is intended to encourage timely and accurate reporting and payment of hospitality taxes.
The hospitality tax is imposed on the patron when they pay for their meal, food, or beverage, and this amount must be held in trust for the city until it is paid to the Director of Revenue Collections. The tax can be paid online using a Customer Self Service (CSS) Account.
Establishments must submit a monthly return to the Revenue Collections Division, reporting their gross proceeds from the sales of prepared meals, food, and beverages, as well as the amount of tax due. This return must be made on the forms provided by the office, ensuring a standardized and consistent reporting process for all businesses in the hospitality industry.
To avoid penalties, businesses should ensure that they fully understand their tax obligations, including the applicable tax rates, reporting requirements, and payment deadlines. In addition, maintaining accurate and up-to-date financial records is crucial for calculating and remitting the correct amount of hospitality tax to the authorities.
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Tax-exempt items
The hospitality tax in South Carolina has some exemptions, and these vary by county and municipality. The state's sales tax does not apply to some items and services, and these are also exempt from the hospitality tax.
Accommodations and Rentals
Transient accommodations for a continuous period of 90 days or more are exempt. This includes hotels, motels, inns, lodges, and similar accommodations.
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Frequently asked questions
The hospitality tax is a 2% fee imposed on the gross proceeds derived from the sales of prepared meals, food, and beverages sold in or by establishments, or those licensed for on-premises consumption of alcohol.
The payment of the hospitality tax is the liability of the consumer of the services. The hospitality tax is collected by the provider of the services, who remits it to the county when due.
Taxes and reports must be remitted to the Revenue Collections Division by the 20th day of the month, covering sales from the previous month.
