What is the Local Hospitality Tax?
Local Hospitality Tax is a one percent tax on the gross proceeds of the sale of prepared meals and beverages in establishments or in establishments that maintain licenses for the on-premises consumption of alcohol, beer, and/or wine in the Town. The tax shall not be computed on the cost of service, gratuity, or other taxes.
What is considered a prepared meal?
A prepared meal is any food and /or beverage, inclusive of alcoholic beverages, beer, and wine, prepared or modified by an establishment, which at the time of sale is ready for consumption.
What items are taxed?- All food and/or beverage sales prepared or modified for immediate consumption. The following are examples of taxable items:
- Produce (Vegetables, Fruit) cut, sliced, cored, etc., or prepared/modified on site (Ex: Vegetable and Fruit Trays)
- Meats and cheeses cut, sliced, or prepared on site (Ex: Meat and Cheese Trays)
- Salads made on site
- Sandwiches/subs prepared on-site Bakery items cooked/baked on-site Coffee brewed on site
- Popcorn made on site
- Ice cream prepared or served on site
- Seafood steamed/cooked on site
- Grilled hamburgers, hot dogs, pizza, nachos, chicken, etc.
- Packaged dinners cooked on-site (Thanksgiving Dinner, etc.)
- Fountain drinks
- Any food prepared, modified, or cooked on-site by an employee or contractor
- Any prepared foods or meals that are subject to South Carolina Sales Tax
- Any served beverage, including beer, wine, and liquor
Note: The above list is an example and is not an all-inclusive list of taxable items.
What items are exempt from tax?
- Cold, canned, or bottled drinks in a vending machine on site
- Consolidating fruit into a basket (Fruit baskets)
- Prepackaged items (not prepared or modified on site) consolidated into a larger container to make one package (Gift Basket)
- Packaged dinners that are not cooked or modified on site
- Ready-to-eat prepackaged food that a customer re-heats on site (Customer is making the food consumable)
- Prepackaged cans, boxes, or jars of food
- Bags of chips, pretzels, nuts, candy, or other prepackaged food items
Note: The above list is an example and is not an all-inclusive list of exempt taxable items.
Who is responsible for collecting and remitting the Local Hospitality Tax?
Restaurants, bars, lounges, private clubs, hotels and motels, caterers, grocery stores, convenience stores, and other food establishments are responsible for collecting this tax from patrons and are required to remit such collections to the local government. Failure to collect taxes does not relieve any business from making the needed remittances to the local government.
How should the tax be remitted?
The Local Hospitality Tax must be remitted to the Town by the 20th of each month. You can mail a paper form with a check or pay online through the Town’s CitizernServe portal. To find the paper form or online payment instructions, please click here.
What are the penalties for late payments?
If your payment is received after the 20th of the month, a 10% late fee will be added to your local hospitality tax fee.
Local Hospitality Tax Form