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South Carolina Department of Revenue
Sales Tax
Columbia, SC 29214-0111

Phone: 803-898-5000 choose the option for Sales Tax
Email: SalesTax@dor.sc.gov
 

Effective January 1, 2017:

Vehicle License Fee: Code Section 56-31-50, which required rental companies who rented vehicles for 31 days or less to collect a 5% surcharge on rental contracts for short-term rentals of vehicles, has been amended to remove the imposition of the 5% surcharge. Under this amendment, a "motor vehicle rental company" may now charge separately stated fees including, but not limited to, vehicle license fees, airport access fees, airport concession fees, and all applicable taxes to the renter.

A "motor vehicle rental company" is defined as an individual or business entity whose business activity is renting motor vehicles to consumers under rental agreements for periods of ninety days or less.

The vehicle license fee authorized by this section is subject to state and local sales and use tax in the manner and to the same extent as the fee charged for the lease or rental of the rental vehicle.

Heavy Equipment Rental Fee: Code Section 12-37-717, which imposed a 3% surcharge on heavy equipment rental contracts, has been repealed. Code Section 56-31-60 has been added to require a qualified renter to collect and remit a heavy equipment rental fee on all qualified rentals of any item of qualified heavy equipment property to customers. The fee is 2.5% of the rental price and applies to all qualified rentals made from a rental location in South Carolina where the customer picks up the equipment or where the qualified heavy equipment property is delivered in South Carolina. The fee does not apply to rentals made from a rental location in South Carolina and delivered outside South Carolina.
The rental invoice must include the heavy equipment rental fee. The person or company collecting such fees must remit the fees to the Department on a quarterly basis using Form ST-394 Rental Fee Return. The heavy equipment rental fee is not subject to South Carolina or local sales tax.

Definitions:
  • Qualified heavy equipment property: any construction, earthmoving, or industrial equipment that is mobile and rented by a qualified renter, including attachments for the equipment or other ancillary equipment or tools. Qualified heavy equipment property is mobile if it is not permanently affixed to real property and is moved amongst worksites.
  • Qualified rental: "qualified heavy equipment property" that is rented for 365 days or less, or pursuant to an open-ended contract, or through a contract without a specified time period.
  • Qualified renter: as a renter:
    • (i) whose primary business is renting out qualified heavy equipment property. Primary business means over 51% of the annual revenue of the business in any given year; and 
    • (ii) that is engaged in a line of business described in Code 532412 or 532310 of the North American Industry Classification System published by the U.S. Census Bureau, 2012 edition.
  • Rental price: the amount of the charge for renting the qualified heavy equipment, excluding any separately stated charges that are not rental charges, including, but not limited to, separately stated charges for delivery and pickup fees, damage waivers, environmental fees, sales tax, or any other ancillary charge.

For Periods Prior to January 1, 2017:

Rental companies engaged in the business of renting private passenger motor vehicles (and other rental vehicles), renting heavy equipment, or renting both, for a period of thirty-one days or less, must collect a surcharge on each contract at the time of rental.

The surcharge rate is as follows:
  • 5% for rental of private passenger motor vehicles and other rental vehicles.
    • Private passenger automobile/vehicle: a private passenger motor vehicle including passenger vans and minivans that are intended primarily for the transport of persons.
    • Rental vehicle: a truck under 26,001 pounds gross vehicle weight, used for transporting personal property, that is rented without a driver and is not used by the customer for business purposes, OR a trailer with a gross weight of not more than 6,000 pounds.
  • 3% for rental of heavy equipment.
    • Heavy equipment: vehicles 3,000 pounds or more, or heavy equipment that is rented without an operator by persons engaged in the heavy equipment business. Equipment or vehicles may be used for construction, mining, industrial, or forestry purposes, including, but not limited to, bulldozers, earthmoving equipment, material handling equipment, well drilling machinery and equipment, and cranes.

 

How to File ST-394 Rental Surcharge Return:

 File online using MyDORWAY 

OR 

To file by paper, download, print and mail your ST-394 to the address listed on the form

Due Date:

February 15 for December 31 period end