April 10, 2026
The Honorable Thomas C. Alexander
President of the Senate
The Honorable Shane Massey
Majority Leader
The Honorable Harvey S. Peeler, Jr.
Chairman, Senate Finance Committee
South Carolina Senate
Columbia, South Carolina
Dear President Alexander, Majority Leader Massey, Chairman Peeler, and Members of the Senate:
I am writing on behalf of National Taxpayers Union, the nation’s oldest taxpayer advocacy organization, to express significant concerns regarding H. 3876 as currently drafted.
While H. 3876 is framed as a clarification of tax collection responsibilities, in practice, it would make compliance more complicated and less efficient. The bill shifts tax collection away from centralized online platforms and onto individual property managers, requiring them to calculate, collect, and remit taxes for each transaction.
For many small business owners, particularly those managing a limited number of properties, this is not a minor change. It introduces new administrative burdens on taxpayers who often lack dedicated accounting resources and are ill-equipped to navigate complex, multi-jurisdictional tax requirements. The likely result is greater confusion, more errors, and higher compliance costs.
South Carolina’s current system is working. Online platforms have collected and remitted tens of millions of dollars in lodging taxes, providing a streamlined process that is simpler for taxpayers and easier for the state to administer. H. 3876 would move the state away from this efficient model and toward a more fragmented approach.
That shift is not merely an administrative inconvenience; it carries real risks. As tax collection becomes more decentralized, the likelihood of reporting errors increases, enforcement becomes more difficult, and overall compliance may decline. In other states, similar changes have resulted in lower compliance rates and reduced collections over time.
Sound tax policy should prioritize simplicity, neutrality, and administrability. When tax systems are straightforward and predictable, compliance improves, and enforcement costs decline. When systems become more complex and fragmented, the opposite is often true.
We also encourage lawmakers to carefully review provisions that broaden the definition of taxable charges and require expanded data-sharing between private parties. These elements may introduce additional compliance and privacy concerns without clear benefits to taxpayers or tax administration.
NTU supports efforts to improve transparency and clarify tax rules. However, those goals should build on existing systems that are already functioning effectively, rather than replacing them with a more complicated and less reliable framework.
For these reasons, we respectfully urge you to reject H. 3876 in its current form or, at a minimum, amend it to preserve centralized, platform-based tax collection. Allowing intermediaries to continue collecting and remitting taxes on behalf of hosts maintains simplicity, reduces errors, and promotes consistent compliance.
Thank you for considering our views and those of taxpayers across South Carolina. We would welcome the opportunity to discuss this issue further.
Sincerely,
Mattias Gugel
Director of State External Affairs
National Taxpayers Union