S.C. bill would gut small short-term renters to benefit larger rental corporations
In addition to losing hundreds of millions in state taxes, HB 3876 would prevent many hosts from listing on Airbnb, Vrbo and similar sites
COLUMBIA, S.C. – A South Carolina bill that would change how short-term rental owners list and market properties could mean hundreds of millions in lost taxes to the state as well as force thousands of these owners out of the rental business.
House Bill 3876 only would recognize professional property management companies with licensed real estate brokers-in-charge, effectively mandating use of large incumbent companies over small business property managers.
Critics say this could force many small hosts who market properties on Airbnb, Vrbo and similar booking platforms out of the market entirely due to compliance burdens they aren’t equipped to handle. Opponents also warn the bill could jeopardize tax collection, noting that property owners who used Airbnb paid $388 million in South Carolina taxes since 2020.
NetChoice, a trade association representing leading internet businesses committed to free expression and free enterprise online, says half of those state and local taxes are at risk if HB 3876 passes because it would prohibit small property management businesses from using Airbnb’s platform for secure payment processing and tax collection.
And, if every property management company is forced into using its own costly system, the risk of tax leakage and non-compliance will skyrocket.
As of 2023, 80% of Airbnb hosts in South Carolina have only one whole-home listing, and 56% reported that renting out their home has helped them cover rising costs of living. Opponents say HB 3876 would make it difficult for these listers to comply with the demands of the bill.
According to Airbnb’s 2025 Economic Impact Report, that platform helped generate about $2.1 billion in economic activity, helped support an estimated 30,000 jobs and drive about $565 million in total tax revenue in South Carolina in 2024. That $2.1 billion is roughly half of the economic impact created by the short-term rental market in South Carolina in 2022.
About 25,000 property owners either could lose or have their ability curtailed to use their property for supplemental income should HB 3876 become law.
Moreover, the origin of the bill seems as if it was created to benefit a handful of local realty businesses that would benefit if the bill became law.
Rep. Lee Hewitt (R-Murrells Inlet) is the primary sponsor. He is a coastal Realtor and property manager who has made tourism, coastal development and real‑estate issues central to his political profile. He owns and is the broker-in-charge of Garden City Realty and likely stands to increase his personal real estate business should his bill become law.
One key supporter of the bill is Rick Elliott of Elliott Beach Rentals in Myrtle Beach, which is part of Hewitt’s district. It was introduced last year by Hewitt and passed the House on a 66-38 vote. The legislation still is pending in the state Senate.
According to South Carolina State Ethics Commission records, Elliott also has hired Boone Peeler to lobby for his company for the past several years. Boone Peeler is the son of Finance Chairman Harvey S. Peeler Jr. South Carolina ethics laws do not bar a child from lobbying a parent as long as they don’t live under the same roof.
Critics say the bill would undermine property rights by preventing rental hosts from listing on platforms such as Airbnb and Vrbo if they hire property managers.
HB3876 focuses on tax collection and compliance for short-term rental accommodations. It amends South Carolina tax code to specify which parties are responsible for collecting and remitting taxes and fees on accommodations.
The bill effectively would prohibit small property managers from listing their clients’ homes on these online booking platforms. For example, more than half of all homes listed on Airbnb in South Carolina are managed by a property manager.
If this bill passes, these booking platforms will no longer be able to allow those homeowners to list their homes. Only homeowners who self-manage their property could continue using the online platforms.
The controversy over the bill stems from one provision that prohibits short-term rental owners who use property management companies from also using digital platforms such as Airbnb and Vrbo for tax collection. Instead, property managers would be required to handle tax responsibilities.
Proponents say the bill would make sure taxes are collected and property owners don’t get in trouble later for not paying what they owe.
Critics, however, say it would create an impossible choice for small hosts between using property management services and online platforms.
The Private Property Rights Institute opposes the bill.
“This legislation poses a direct threat to private property rights and undermines the ability of homeowners to freely utilize property management services, including short-term rental platforms,” PPRI Executive Director Charlie Kolean wrote in an April 15 letter to South Carolina Senate leaders. “At its core, HB 3876 represents a clear overreach into the rights of property owners. It restricts how individuals can use, manage and derive income from their own property – setting a concerning precedent that extends well beyond the short-term rental market.
“Property rights are foundational to economic freedom, and any policy that limits an owner’s ability to contract with a property manager or utilize widely accepted platforms should be approached with the utmost caution.”
Kolean’s letter was address to Senate President Thomas Alexander (R-Walhalla), Majority Leader A. Shane Massey (R-Edgefield) and Minority Leader Brad Hutto (D-Orangeburg) as well as Senate Finance Committee Chairman Peeler (R-Gaffney).
Kolean said the legislation disproportionately affects small property owners and local entrepreneurs.
“Many homeowners rely on property managers to responsibly oversee their assets, particularly in markets where short-term rentals provide meaningful supplemental income or financial stability,” Kolean wrote. “Buy limiting access to these services, HB 3876 effectively advantages larger, more established operators while reducing opportunity for everyday South Carolinians.”
Opponents say HB 3876 strips freedoms away from homeowners to benefit a handful of large corporations seeking to eliminate their competition.
For example, if a property owner uses a property manager to list a home on Airbnb, this bill would force the property owner off of the platform entirely. His only options would be to manage everything himself or sign a contract with a large corporation, including some companies behind the bill, likely at a much higher cost.
Here’s how it works. When someone books with Airbnb or Vrbo, that platform acts as the “merchant of record,” meaning it processes the payment, collects applicable taxes and handles the financial transaction on behalf of the host.
For property managers who list and manage homes on behalf of individual homeowners, that means they do not need to build their own payment infrastructure, navigate complex tax obligations or take on liability and data protection responsibilities for financial transactions.
Airbnb, Vrbo and similar platforms voluntarily collect and remit South Carolina state and local sales taxes, state accommodations tax and local taxes and fees in 16 localities on behalf of hosts and guests.
The bill currently is pending with the Senate Finance Committee led by Harvey Peeler, but no action has been taken on it since it was referred to the committee in January. A Senate Finance subcommittee discussed the bill in March, but no formal action was taken. The regular session is scheduled to end May 14.