Short answer: Short-term stays on Hilton Head Island carry 10% in total taxes: 7% to the state (5% sales tax plus 2% state accommodations tax, collected by the SC Department of Revenue) and 3% to the Town (1% local accommodations tax plus a 2% beach preservation fee). It was 11% until March 1, 2025, when Beaufort County's 1% Green Space sales tax expired. The state tax applies to stays shorter than 90 continuous days, and the Town's 3% applies to stays under 90 days.
Key facts
- Total on a Hilton Head stay: 10% of gross rental receipts (derived from SCDOR and Town of Hilton Head Island rates).
- State: 7%, made up of 5% sales tax and 2% accommodations tax (SC Code 12-36-920; SCDOR).
- Town: 3%, made up of a 1% local accommodations tax and a 2% beach preservation fee (Town of Hilton Head Island).
- Which stays: under 90 days. Rentals to the same person for 90 continuous days aren't transient and aren't taxed as accommodations.
- Old rate: 11% before March 1, 2025, when the 1% Beaufort County Green Space sales tax expired (SCDOR).
- Who files: the owner, unless a rental company or booking platform collects the payment and remits.
- When: state returns are due the 20th of the month after the filing period; Town returns are quarterly, due April 20, July 20, October 20 and January 20.
- On the ballot: a 1% Beaufort County transportation sales tax goes to voters on November 3, 2026.
How is the 10% split?
Seven percent goes to the state and three percent to the Town. Here's how each piece breaks down, with what it would be on a $2,000 week:
| Tax | Rate | Collected by | On $2,000 |
|---|---|---|---|
| State sales tax | 5% | SC Department of Revenue | $100 |
| State accommodations tax | 2% | SC Department of Revenue | $40 |
| Town local accommodations tax | 1% | Town of Hilton Head Island | $20 |
| Town beach preservation fee | 2% | Town of Hilton Head Island | $40 |
| Total | 10% | $200 |
The statute itself (SC Code 12-36-920(A)) imposes "a sales tax equal to seven percent" on rooms and lodgings furnished to transients, including residences. SCDOR describes that 7% as 5% sales tax plus 2% accommodations tax, and the Town's rental program page says the same. The Town's 3% is set by the Town and paid to its Revenue Services office.
Why do some sites say 11% or more?
They're out of date or wrong. Until March 1, 2025, Beaufort County also had a 1% Green Space sales tax, which brought the total to 11%. SCDOR announced that the tax expired on that date. Several 2026 rental guides still say "11%" and list the Green Space tax, which no longer applies.
Other sites stack taxes that don't apply on the island. Beaufort County's 3% local accommodations tax applies to rentals in unincorporated areas of the county, not inside the Town of Hilton Head Island. Some summaries also swap the Town's two pieces. The Town's own page says the local accommodations tax is 1% and the beach preservation fee is 2%. The total is the same, but the split matters if you file yourself.
One change could be coming. On November 3, 2026, Beaufort County voters decide on a 1% transportation sales tax. The county's page doesn't give a start date. If it passes, check with SCDOR whether and when it applies to rentals. Voters turned down a similar referendum on November 5, 2024.
Who has to collect and file the tax?
Whoever is in the business of furnishing the rooms, which is usually the owner. That changes depending on how you book:
- You book guests directly. SCDOR says you need a Retail License for each rental location, and you file the 7% state tax. You also collect and file the Town's 3% yourself. The Town's requirements page says owners who rent on their own, or through a management company that isn't licensed, collect and send in the local tax.
- A booking platform takes the payment. SCDOR says that if an online travel company reserves the stay and accepts payment, it's responsible for the state tax on the full amount of the booking.
- A rental management company handles it. SCDOR says the property manager remits the state tax when it collects payment. Get in writing which taxes your manager files and which you file.
State returns are due by the 20th of the month after the end of each filing period. The Town's 1% and 2% are filed quarterly, due April 20, July 20, October 20 and January 20. Separate from the taxes, the Town requires a business license and a short-term rental permit for stays under 30 days.
Are any rentals exempt?
A few, and they rarely fit a Hilton Head vacation home:
- Long stays. Rentals to the same person for 90 continuous days aren't treated as transient (12-36-920(A)).
- A residence rented less than 15 days a year. The statute exempts rental income that's excluded from federal income under Internal Revenue Code Section 280A(g), the rule for a residence rented less than 15 days a year. SCDOR's Revenue Ruling #15-4 explains it.
- Small lodging in your own home. The statute exempts facilities of "less than six sleeping rooms" on the same premises used as your place of abode. SCDOR's web page says "six or fewer" and adds that no rental agency or booking platform can be used. The statute's wording controls, and this exemption almost never applies to a whole-home vacation rental.
SCDOR's page also says a Retail License isn't required if you rent no more than one week in each calendar quarter, but you still file and pay once a year.
Is the 15-day rule the same as the property tax rental limit?
No, and mixing them up is one of the most common mistakes in Hilton Head real estate articles. The 15-day rule is a sales tax exemption on accommodations. The property tax rule is different: a legal residence keeps the 4% assessment ratio only if it isn't rented for more than 72 days in a calendar year (SC Code 12-43-220(c)). A home rented 20 days a year owes accommodations tax on those stays but can still qualify for 4%. A home rented 100 days a year is taxed at 6%. See 4% vs 6%.
How we help
If you're buying to rent, we'll ask the seller or their manager how the taxes have been filed, request the community's rental rules, and show you the 6% property tax estimate next to the rental math so you see the whole cost. Your tax adviser should confirm the filing setup for your situation.
Questions
Is the cleaning fee taxed?
If it's required, yes. SCDOR says a cleaning fee charged on every rental is subject to the 7% state tax, plus local tax, while an optional cleaning fee isn't taxed. Service fees charged by a management company or booking platform count as part of the rental and are taxed too.
Is the rate the same in Bluffton?
The state's 7% is the same. The Town of Bluffton sets its own local accommodations tax, which its fee schedule lists as 3% of gross revenue for rentals of 30 days or less. Bluffton has no beach preservation fee line in that schedule. See Hilton Head vs Bluffton.
Do I owe the tax when I or my family stay in the home?
No. The tax is imposed on the gross proceeds from rentals, so stays you don't charge for aren't taxed. Keep a log of rented days and personal days anyway. The 72-day property tax limit counts rented days, and your tax adviser will want both.
Sources
- Accommodations tax, SC Department of Revenue (checked October 2026)
- SC Code Title 12 Chapter 36 (12-36-920, sales tax on accommodations), SC Legislature (checked October 2026)
- Accommodations tax and beach preservation fees, Town of Hilton Head Island (checked October 2026)
- Local sales tax changes coming March 1 in three counties, SC Department of Revenue (checked October 2026)
- SC Revenue Ruling #15-4, vacation rentals of residence, SC Department of Revenue (checked October 2026)
- Short-term rental permit requirements, Town of Hilton Head Island (checked October 2026)