Airbnb Host Taxes in South Carolina - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for Airbnb Hosts in South Carolina

From the historic charm of Charleston to the beaches of Myrtle Beach, short-term rentals are a growing part of South Carolina’s hospitality landscape. However, income earned through platforms like Airbnb is generally taxable at both the federal and South Carolina state levels. Understanding these tax obligations is crucial for compliance and maximizing potential deductions.

South Carolina State Tax Rules for Rental Income

As a resident of South Carolina earning income from Airbnb hosting, filing a state income tax return is required. South Carolina utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, income earned through Airbnb is considered taxable income and must be reported. The primary form used for reporting self-employment income, including rental income reported on Schedule C, is Form SC1040. Even if reporting on Schedule E, the net rental income will flow to Form SC1040. South Carolina also allows for certain deductions mirroring federal rules, such as depreciation and mortgage interest, but it’s essential to verify specific state limitations. South Carolina does not have a separate tax for gig workers, but all income is subject to the state's income tax rates. Keep meticulous records of all income and expenses related to your Airbnb activity. The South Carolina Department of Revenue offers detailed information and resources for taxpayers; you can find more information at the South Carolina Department of Revenue website. Failure to accurately report rental income can result in penalties and interest, so proactive tax planning is highly recommended. Remember to consider any local hospitality taxes levied by cities or counties within South Carolina, as these are separate from state income tax.

The Critical Tax Question: Are You a Business or a Rental?

This is arguably the most important tax question for an Airbnb host, as it directly impacts whether you owe self-employment tax. The IRS classification determines how your income is taxed and what deductions you can claim.

• Schedule E (Passive Rental Income): Most casual hosts report on Schedule E (Supplemental Income and Loss). This applies if you primarily provide basic lodging and minimal services – essentially, making the property available and cleaning between guests. Reporting on Schedule E exempts you from the 15.3% self-employment tax.
• Schedule C (Active Business Income): If you provide "substantial services" to guests – such as daily cleaning, providing meals, or offering concierge-style services – the IRS may consider your Airbnb activity an active business. In this case, you report income and expenses on Schedule C (Profit or Loss from Business) and are subject to the 15.3% self-employment tax (Social Security and Medicare).

Top Tax Write-offs for South Carolina Hosts

• Platform Fees: Fees charged by Airbnb, VRBO, and other platforms are fully deductible as business expenses.
• Mortgage Interest & Property Taxes: You can deduct the portion of your mortgage interest and property taxes that corresponds to the percentage of your home used for rental purposes and the number of days it was rented.
• Repairs, Maintenance & Cleaning: Expenses for repairing and maintaining the rental property, including professional cleaning services and cleaning supplies, are deductible.
• Depreciation: This is a powerful deduction that allows you to recover the cost of your rental property over its useful life. It’s a complex calculation, and consulting a tax professional is often advisable.