Opinion ID: 2396681
Heading Depth: 3
Heading Rank: 1

Heading: Service and Facilitation Fees

Text: Travelscape contends it is not required to pay sales tax on the service and facilitation fees it retains because such fees are derived from the services it provides, not from the rental charge for the hotel room. We disagree. Section 12-36-920(A) of the South Carolina Code (Supp. 2009) imposes a seven percent sales tax on  the gross proceeds derived from the rental or charges for any rooms ... furnished to transients by any ... place in which rooms, lodgings, or sleeping accommodations are furnished to transients for consideration. (emphasis added). In the definition section of the South Carolina Sales and Use Tax Act, the legislature defined the term gross proceeds of sale and any similar term as the value proceeding or accruing from the sale, lease, or rental of tangible personal property ... without any deduction for ... the cost of materials, labor, or service. S.C.Code Ann. § 12-36-90(1)(b)(ii) (emphasis added). [5] The cardinal rule of statutory construction is to ascertain and effectuate the intent of the legislature. Hardee v. McDowell, 381 S.C. 445, 453, 673 S.E.2d 813, 817 (2009) (internal quotation omitted). Where the statute's language is plain, unambiguous, and conveys a clear, definite meaning, the rules of statutory interpretation are not needed and the court has no right to impose another meaning. Gay v. Ariail, 381 S.C. 341, 345, 673 S.E.2d 418, 420 (2009). In our view, the fees charged by Travelscape for its services are subject to sales tax under the plain language of section 12-36-920(A) as gross proceeds. Section 12-36-920(A) imposes the tax on the  gross proceeds derived from the rental or charges for any room. (emphasis added). In section 12-36-90(1)(b), the legislature specifically stated the definition of gross proceeds of sales applies to any similar term as well. S.C.Code Ann. § 12-36-90(1)(b). We find the term gross proceeds as used in section 12-36-920(A) is a similar term to gross proceeds of sales. Therefore, the definition of gross proceeds of sales also applies to gross proceeds. [6] Accordingly, gross proceeds under section 12-36-920(A) includes the value obtained from the rental of accommodations without deduction for the cost of services. S.C.Code Ann. § 12-36-90(1)(b)(ii). Because the cost of services is specifically included in the definition of gross proceeds of sales, we find the fees retained by Travelscape for its services are taxable as gross proceeds.