Short-term rentals in Isle of Palms, explained properly.

The City says all property owners who rent residential units (houses, condos, apartments, hotel rooms) for any length of time must obtain an Isle of Palms short-term rental business license. The City Code's business license section treats each housing unit as a separate place of business, so each rented unit needs its own license. The rental license period runs May 1 to April 30 and the fee is due by April 30 (see the license fee rule). Applications are made on the City's short-term rental application; the City lists a Short-Term Rental Coordinator at City Hall, 1207 Palm Boulevard.

The City says rental units must be offered in their entirety and that owners cannot offer private rooms or shared rooms within single-family homes, because that violates the single-family zoning and building code provisions of the City. We read this on the City's Rental Licenses page (disclosure section); the zoning and building code provisions it refers to were not read, so this rule needs review against that text.

License fees are based on the gross income the rental earned in the previous calendar year. The City's fee schedule (effective 05/24/2023) starts at $450.00 for $0 to $2,000 and adds $4.60 for each further $1,000 band (for example $454.60 for $2,001 to $3,000 and $900.80 for $99,001 to $100,000). The fee is delinquent if paid after April 30, and a penalty of 5% per month applies after April 30. The City also states a Business License refund rule: a refund request must be in writing before the June 1 following the April 30 due date, and no refund is made for a business that is discontinued.

In place of a tax document, the City requires owners to complete the Rental Revenue Affidavit and provide end-of-year rental revenue statements from all property managers and booking sites used during the year. The Fire Safety Acknowledgment Form is required for both renewals and new licenses. Owners must also acknowledge that they have read the Short-Term Residential Business License Disclosure (the code requirements summarised on the City's page) as part of the application.

Sec. 5-4-202 sets the maximum overnight occupancy. For an existing residence that did not hold a valid short-term rental license on June 22, 2010, it is the greater of two people per bedroom plus two people, or six people. For an existing residence whose owner did hold a valid license on June 22, 2010, it is the greater of two per bedroom plus two, one person per 250 square feet of gross heated floor area in the whole house, or six people. A residence permitted for new construction after June 22, 2010 gets the same figure or 12 people, whichever is fewer, and an existing residence that is altered or reconstructed after that date may increase up to 12 people (no increase if it was already 12 or more; a decrease in bedrooms or floor area reduces it). Children under two years old are not counted. When it issues a license the City provides a written notice stating the maximum overnight occupancy, to be posted in the residence.

Sec. 5-4-203 says that, whatever else the article provides, at no time may the total number of persons at a residence exceed 40 persons, including children, or twice the maximum overnight occupancy determined under Sec. 5-4-202, whichever is less.

Sec. 5-4-204 limits the vehicles at a residence between 11:00 p.m. and 9:00 a.m. to one vehicle per approved bedroom or one vehicle for every two and one-half people allowed under the maximum overnight occupancy, and in no instance fewer than two. The City's Rental Licenses page restates this as the greater of the two figures; this page follows the code text. Short-term tenants may use portable parking permits in the public rights-of-way (see the parking permits rule).

Owners of short-term rentals may apply to the Police Department for up to four portable parking permits per calendar year, at $15.00 each. Short-term tenants use them to park in the public rights-of-way within the Resident Parking District from 9:00 a.m. to 6:00 p.m. when no adequate off-street parking is available on the property.

The owner must provide the City with a 24/7 telephone number that can be used to contact an owner or an owner's representative. The owner's representative must be able to be on site within one hour. This requirement is stated on the City's Rental Licenses page; the code section for it was not among the pages read.

Sec. 5-4-205 requires the owner to affix the City's written notice about ordinances affecting tenants in a conspicuous place inside the residence, within 15 feet of the main entrance, and to keep it displayed at all times. A City noise-ordinance notice must be weatherproofed and affixed in a conspicuous place on any exterior deck, porch, patio, pool or other gathering area, and kept displayed at all times. It is unlawful to destroy, hide, obstruct, conceal or remove the notices.

The City's page states the general penalty: a rental unit owner or person in possession or control who knowingly allows others to violate (or continue to violate) the City Code on the property, or knowingly allows habitual violations, is guilty of a misdemeanor punishable by a fine not exceeding $500 (plus court costs), imprisonment not exceeding 30 days, or both, at the municipal judge's discretion. Each day of a violation is a separate offense. Late payment of the license fee also carries a 5% monthly penalty after April 30.

The City may revoke a license when the licensee has engaged in or allowed an unlawful activity or nuisance relating to the business, or has shown an inability or unwillingness to prevent tenants from engaging in unlawful activities or creating nuisances. The City may also revoke when the licensee has had five or more complaints of unlawful activity within a single calendar year that the Police Department determines to be founded. The appeal process was not read.

The City's Rental Licenses page lists a 2.0% County of Charleston Accommodations Tax, remitted to Charleston County, on residential rentals of 30 days or less. Charleston County's Business License/User Fee Department (Revenue Collections) is the County contact the page gives.

The City's Rental Licenses page lists a 1.0% City of Isle of Palms Accommodations Tax, remitted to Charleston County, on residential rentals of 30 days or less.

The City's Rental Licenses page lists a 1.0% City of Isle of Palms Beach Preservation Fee, remitted to Charleston County, on residential rentals of 30 days or less. The City Code section that imposes the fee was not read.

South Carolina charges a 7% tax on rent for rooms, lodgings or sleeping accommodations furnished to transients, including rentals of a residence (S.C. Code § 12-36-920(A)). The South Carolina Department of Revenue (SCDOR) describes this as 5% sales tax plus 2% accommodations tax, together with any local sales and use taxes that SCDOR collects for counties. SCDOR's ST-575 chart lists the total accommodations rate for each county and city.

SCDOR applies accommodations tax to sleeping accommodations of any kind rented to guests for less than 90 consecutive days, including rooms or spaces in your own home and condos. Rentals to the same person for 90 continuous days are not taxed. A home with six or fewer bedrooms is exempt only when the owner or operator lives on the same premises at the time and does not use a rental agency or online travel company to rent the rooms.

SCDOR says owners who book short-term rentals directly must hold a Retail License to file and pay accommodations tax, with one license for each rental location. If you rent only through a property management or online travel company that takes the reservation and the payment, that company remits the tax for the full booking and you do not need a Retail License. A license is also not required if you rent a room or space for no more than one week each calendar quarter, but the tax must still be filed and paid once a year.

Accommodations tax returns and payments must be filed electronically (SCDOR's MyDORWAY or approved software), by the 20th of the month following the end of the filing period.

Under the Local Accommodations Tax Act, a city or county may add a local accommodations tax of up to 3% on stays taxed under S.C. Code § 12-36-920(A). A county may not charge more than 1.5% inside a city or town without that municipality's consent. SCDOR notes that many local accommodations taxes are not administered by SCDOR, so owners must contact the city or county where the rental is located to report them.