A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION 6-1-195 SO AS TO PERMIT A GOVERNING BODY OF A MUNICIPALITY, COUNTY, OR OTHER POLITICAL SUBDIVISION OF THE STATE TO ENACT OR ENFORCE AN ORDINANCE, RESOLUTION, OR REGULATION THAT PROHIBITS THE RENTAL OF A RESIDENTIAL DWELLING TO A SHORT-TERM GUEST AND TO DEFINE TERMS RELATED TO SHORT-TERM RENTALS; BY AMENDING SECTION 12-36-70, RELATING TO THE DEFINITIONS OF A RETAILER AND A SELLER, SO AS TO AMEND THESE DEFINITIONS; BY ADDING SECTION 12-36-15 SO AS TO DEFINE AN ACCOMMODATIONS INTERMEDIARY; BY AMENDING SECTION 12-36-920, RELATING TO TAX ON ACCOMMODATIONS FOR TRANSIENTS, SO AS TO REMOVE THE PROVISION THAT THIS TAX DOES NOT APPLY TO FACILITIES CONSISTING OF LESS THAN SIX SLEEPING ROOMS; AND BY AMENDING SECTION 27-50-250, RELATING TO THE TRANSFER OF A RESIDENTIAL PROPERTY TITLE, SO AS TO CHANGE THE TIME REFERENCED FROM NINETY DAYS TO ONE HUNDRED EIGHTY DAYS.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Article 1, Chapter 1, Title 6 of the S.C. Code is amended by adding:

 

    Section 6-1-195. (A) As used in this section:

       (1) "Property owner" means the owner of a residential dwelling to be used as a short-term rental.

       (2) "Residential dwelling" means any building, structure, or part of a building or structure that is used or intended to be used as a home, residence, or sleeping place by one or more persons to the exclusion of all others.

       (3) "Responsible local representative" means an individual having his place of residence or business office within a certain distance of the short-term rental as defined by each local government and having been designated by the property owner to serve as the agent responsible for operating such property in compliance with all applicable laws and regulations and authorized by appointment to accept service of process on behalf of the owner for all proceedings and notices.

       (4) "Short-term rental" means a residential dwelling that is offered for rent for a fee and for fewer than twenty-nine consecutive days.

       (5) "Short-term guest" means a person who occupies a short-term rental.

    (B) The governing body of a municipality or county in this State may enact and enforce an ordinance regulating short-term rentals. The ordinance regulating short-term rentals may:

       (1) require registration or permitting short-term rentals;

       (2) require the appointment and continual engagement without interruption of a responsible local representative, require that the responsible local representative provide all current contact information determined to be necessary or useful by the governing body for enforcement of its ordinance, and require that the responsible local representative provide written evidence that he has been duly appointed to accept service of process on behalf of the owner for all proceedings and notices;

       (3) limit the number of properties that may be used for short-term rentals within the jurisdiction, including, but not limited to, by aggregate caps, density limitations, separation requirements, and specific limitations within or exclusion from particular zoning districts, overlay zones, or other land used categories;

       (4) prohibit the rental of residential dwellings to short-term guests within the jurisdiction;

       (5) impose inspection, maintenance, and conduct regulations on short-term rentals;

       (6) provide a mechanism by which short-term rental permits or the right to offer short-term rentals may be denied, suspended, or revoked for noncompliance with federal, state, or local ordinances;

       (7) establish service or user fees pursuant to Section 6-1-330 for the privilege of offering short-term rentals, which service or user fees shall be valid under state law to the extent that the entire revenues thereof are used to pay costs of additional burdens imposed on a county or municipality by short-term rentals; and

       (8) permit a property owner to identify a beneficiary who shall have the opportunity to maintain a residential dwelling as a short-term rental upon the death of the property owner without reapplication subject to the compliance of the beneficiary with all applicable requirements established by the local governing body and this section.

    (C) The local government may establish a process by which a person developing or acquiring property intended to be used as a short-term rental may apply for a short-term rental permit before developing or acquiring the property. If such a short-term rental permit is approved, then the person developing or acquiring the property shall have a vested right in the short-term rental permit for a period to be determined by the local government, but in no case less than one year.

    (D) Except when the gross proceeds of a short-term rental are wholly excluded from the gross income of the taxpayer, the operation of a short-term rental shall be regarded as a commercial use and the property owner is responsible for obtaining a business license for the short-term rental pursuant to Section 6-1-400(A).

    (E) The property owner, at all times that the residential dwelling is operated, marketed, or otherwise registered as a short-term rental, shall maintain a commercial general liability policy or valid endorsement to a residential property insurance policy through a company admitted or otherwise authorized to insure risks located in this State that insures against personal injury and property damage with minimum aggregate limits of one million dollars per occurrence.

    (F) Short-term rental shall be valued for taxation in accordance with Section 12-37-930 and any method for determining the fair market value not inconsistent with the general laws or constitution of the State may be utilized.

    (G) This section does not apply to:

       (1) lodging provided by hotels, motels, tourist camps, or campgrounds subject to regulation under Title 45, including hotels, motels, or condominiums with multiple owners owning and managing individual units or groups of units that rent units on a daily basis or longer, and that provide a front desk or office for customer service, provide a centralized telephone system, or provide housekeeping services at no additional charge;

       (2) any vacation timesharing accommodation as defined by Section 27-32-10(7) and (8); or

       (3) rental of residential property on a weekly or monthly basis pursuant to Chapter 40, Title 27.

    (H) Short-term rentals as defined in this section shall not be subject to regulation under Title 45.

    (I) Nothing in this section shall be construed to:

       (1) interfere with a political subdivision's authority under Chapter 29, Title 6, including, but not limited to, land use regulation, land development regulation, zoning, or permitting; or

       (2) create a duty of an insurer to defend or indemnify an insured for occurrences arising out of the use of the residential dwelling during the time the residential dwelling is operated as a short-term rental under a contract for insurance written to insure a residential dwelling absent express language providing for such coverage.

 

SECTION 2.  Section 12-36-70 of the S.C. Code is amended to read:

 

    Section 12-36-70.  "Retailer" and "seller" include every person:

    (1)(a) selling or auctioning tangible personal property whether owned by the person or others;

       (b) furnishing accommodations to transients for a consideration, except an individual furnishing accommodations of less than six sleeping rooms on the same premises, which is the individuals place of abode;

       (c) renting, leasing, or otherwise furnishing tangible personal property for a consideration;

       (d) operating a laundry, cleaning, dyeing, or pressing establishment for a consideration;

       (e) selling electric power or energy; or

       (f) selling or furnishing the ways or means for the transmission of the voice or of messages between persons in this State for a consideration.  A person engaged in the business of selling or furnishing the ways or means for the transmission of the voice or messages as used in this subitem (f) is not considered a processor or manufacturer;

    (2)(a) maintaining a place of business or qualifying to do business in this State;  or

       (b) not maintaining an office or location in this State but soliciting business by direct or indirect representatives, manufacturers agents, distribution of catalogs, or other advertising matter or by any other means, and by reason thereof receives orders for tangible personal property or for storage, use, consumption, or distribution in this State.;

    (3) operating as a marketplace facilitator, as defined in Section 12-36-71.; or

    (4) operating as an accommodations intermediary as defined in Section 12-36-72.

    The department, when necessary for the efficient administration of this chapter, may treat any salesman, representative, trucker, peddler, or canvasser as the agent of the dealer, distributor, supervisor, employer, or other person under whom they operate or from whom they obtain the tangible personal property sold by them, regardless of whether they are making sales on their own behalf or on behalf of the dealer, distributor, supervisor, employer, or other person.  The department may also treat the dealer, distributor, supervisor, employer, or other person as a retailer for purposes of this chapter.

 

SECTION 3.  Article 1, Chapter 36, Title 12 of the S.C. Code is amended by adding:

 

    Section 12-36-15.  (A) "Accommodations intermediary" means a person who:

       (1) facilitates the rental of any rooms, campground spaces, lodgings, or sleeping accommodations subject to taxation pursuant to under Section 12-36-920; and

       (2) directly or indirectly:

           (a) charges the transient the amount required to secure the rental of the accommodation;

           (b) collects the amount charged for the rental of the accommodation; or

           (c) charges a fee to the transient as compensations for its services. For purposes of this section, a person "facilitates" a rental by brokering, coordinating, or in any other way arranging for the purchase of the right to use accommodations through a transaction directly, including through the use of one or more payment processors, between a customer and an accommodations provider.

 

SECTION 4.  Section 12-36-920(A) of the S.C. Code is amended to read:

 

    (A) A sales tax equal to seven percent is imposed on the gross proceeds derived from the rental or charges for any rooms, campground spaces, lodgings, or sleeping accommodations furnished to transients by any hotel, inn, tourist court, tourist camp, motel, campground, residence, or any place in which rooms, lodgings, or sleeping accommodations are furnished to transients for a consideration. This tax does not apply:

       (1) where the facilities consist of less than six sleeping rooms, contained on the same premises, which is used as the individual's place of abode; or

       (2) to gross proceeds from rental income wholly excluded from the gross income of the taxpayer pursuant to Internal Revenue Code Section 280A(g) as that code is defined in Section 12-6-40(A).

    The gross proceeds derived from the lease or rental of sleeping accommodations supplied to the same person for a period of ninety continuous days are not considered proceeds from transients. The tax imposed by this subsection (A) does not apply to additional guest charges as defined in subsection (B) or separately stated optional charges on a bill to a customer for amenities, entertainment, special items in promotional tourist packages, and other guest services.

 

SECTION 5.  Section 27-50-250(A) of the S.C. Code is amended to read:

 

    (A) The grantee of residential property subject to a vacation rental shall take title subject to the vacation rental agreement and the vacation rental management agreement for all vacation rental periods that begin no later than ninety one hundred eighty days after the date the grantee's interest is recorded in the office of the register of deeds. If the vacation rental begins more than ninety one hundred eighty days after the recording of the grantee's interest, then no party has the right to enforce the terms of the vacation rental agreement or occupancy provided for in the agreement, but the tenant is due a refund of any payments towards the agreement within forty-five days of the recording of the transfer of interest.

 

SECTION 6.  This act takes effect upon approval by the Governor.

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