Myrtle Beach law bans converting short-term rentals to long-term rentals in key areas

Myrtle Beach, South Carolina, has passed a law banning short-term rental (STR) buildings from converting to long-term rentals in certain areas. The ordinance applies to hotels and STRs with more than two units that were constructed for or have been used for short-term rentals of less than 90 days. It goes into effect immediately.

The new zoning overlay stretches along 114 city blocks east of Kings Highway to the ocean in commercial districts where the majority of STRs in the city are allowed to operate. Landlords within the overlay zone that had business licenses for long-term rentals before the new ordinance was approved may continue to offer long-term rentals as long as they maintain their licenses. The new rules don’t apply to renters with leases, and the law carves out other exceptions.

“If you have a condo in a tower and that’s been your primary residence and you want to sell it and the next buyer wants to operate it as a long-term, they would be able to do that. If you decide you don’t want to live in it anymore, you don’t want to use it as your second home anymore and you’ve never rented it before, you would be able to choose to do short-term rentals or long-term rentals,” said Assistant City Manager Brian Tucker.

The measure is designed to ensure a strong supply of accommodations for visitors as well as maintain revenue from lodging taxes and hospitality fees. The city could lose $2.48 million for every 1,000 STRs converted to long-term rental properties, and Horry County could lose $1.19 million in the same scenario, according to a September 2024 study. Altogether, every 1,000 short-term to long-term rental conversion results in a loss of $7.61 million in city, county, and state revenues.

Myrtle Beach placed a 270-day moratorium on short-term to long-term conversions in April 2024 that was set to expire in January 2025.

The city requires STR operators to have a business license and follow zoning rules, which largely ban STRs from traditional residential neighborhoods. STR hosts must collect Myrtle Beach local accommodations tax from guests and file accommodations tax returns with the city. Operators are also required to create a Horry County hospitality fee account, collect the fee, and report and remit the fees to the county.

All South Carolina STRs are also subject to state lodging taxes. STR hosts are required to register with state tax authorities, collect lodging taxes from guests, and remit the tax.

A few exceptions apply:

• Operators aren’t required to collect accommodations tax if they rent out a unit for less than 15 days during the taxable year, or if they rent out six bedrooms or less in a home they own and in which they live, provided they don’t use STR marketplaces such as Airbnb or Vrbo for guest transactions.
• If operators provide short-term accommodations for less than one week in any calendar quarter, they don’t need to register with the state, but they still need to collect and pay lodging tax. 
• If operators rent a property exclusively through an STR marketplace that reserves rooms and accepts payments for booking, they’re not required to register with the state or collect short-term rental taxes.

Airbnb collects lodging taxes for the state, Myrtle Beach, and Horry County when STR listings are booked. Vrbo collects state lodging taxes and Myrtle Beach local accommodations tax.

If taxes aren’t being collected for you, you’re responsible for collecting and remitting lodging taxes. Avalara MyLodgeTax can help vacation rental hosts automate and simplify lodging tax compliance. For more on vacation rental lodging taxes in South Carolina, see our state vacation rental tax guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.