Short-Term Rental Taxes in South Carolina: Charleston, Hilton Head, and Myrtle Beach
6.4% top income tax rate (phasing down) | Conforms to federal depreciation | Major coastal markets: Charleston, Hilton Head, Myrtle Beach | Accommodations taxes 2–11% by county/city
South Carolina's coastal markets — the colonial history of Charleston, the private-resort luxury of Hilton Head Island, and the family vacation scale of Myrtle Beach — represent three very different STR investment profiles. SC's top income tax rate is currently 6.4% (reduced from 7%, with further reductions scheduled), and the state generally conforms to federal depreciation methods.
South Carolina Income Tax
South Carolina has a graduated income tax with a top marginal rate of 6.4% on income over approximately $17,000. This applies to net rental income after all deductions. SC's recent tax reform is phasing this rate down to 6% over several years. South Carolina generally conforms to federal depreciation, meaning cost segregation deductions reduce both federal and SC taxable income.
SC Accommodations Taxes
| Market / County | SC Accommodations Tax | Local Add-On | Total |
|---|---|---|---|
| Charleston (City + Charleston County) | 7% | 1.5–3% | ~10% |
| Hilton Head Island (Beaufort County) | 7% | 1.5% | ~8.5% |
| Myrtle Beach (Horry County) | 7% | 1.5% | ~8.5% |
| Isle of Palms (Charleston County) | 7% | 1.5% | ~8.5% |
| Kiawah Island (Charleston County) | 7% | 1.5% | ~8.5% |
| Folly Beach (Charleston County) | 7% | 1.5% | ~8.5% |
South Carolina's Top STR Markets
Charleston: Historic city with strong year-round tourism demand. Mix of downtown carriage houses, downtown condos, and suburban homes catering to event tourism (weddings, corporate events, historical tourism). Short average stays typical. The city has active STR regulation discussion; verify current permit requirements.
Hilton Head Island: Private resort island with strong seasonal demand and premium ADRs. Properties often include resort amenities (golf access, beach access, pools). High personal property content in resort-style properties makes cost segregation valuable.
Myrtle Beach: Scale vacation rental market with properties ranging from oceanfront high-rises to golf course communities. High volume, lower ADR than Hilton Head — but significant portfolio-building opportunity at lower entry prices than coastal markets in Florida or the Carolinas further north.
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