TRAC Subcommittee Adjourns; No Action Taken

The NerveBy Jack Jackson
Citizen Reporter

Despite gathering for approximately 90 minutes, a recent meeting of the Local Accommodations and Hospitality Tax Subcommittee of the S.C. Taxation Realignment Commission adjourned with no formal action completed.

In addition to subcommittee members Burnie Maybank, Brian Moody, Charles Way and Don Weaver, 25 to 30 members of various organizations involved in operating and or promoting various ventures in the tourism and hospitality industries attended the Aug. 27 meeting at the Charleston office of law firm Nexsen Pruet.

The meeting was very loosely organized, with input from various attendees at various times, without attribution to their respective organizations or individual identification, though many contributors were recognized personally by Maybank or other subcommittee members.

The meeting was largely concerned with providing subcommittee members with an understanding of the complex code of laws currently taxing revenues generated by the tourism and hospitality industries. These generate approximately $40 million annually and can be found here.

Of these funds, various portions are allocated to city and county governments, the state Department of Commerce and various entities working to promote tourism in South Carolina.

Some of these funds may be used by local governments as part of their general funds and some are allocated for “tourism-related” expenditures. Of the latter, the government body receiving the funds is required to file an annual report with the Tourism Expenditure Review Committee, which is charged with ensuring the funds are properly used.

In an aside, one individual affiliated with the Tourism Expenditure Review Committee stated that there are three or four instances of questionable use of allocated funds annually.

He also related that in at least one instance where an expenditure was deemed not in compliance, the General Assembly subsequently passed new legislation during the next session specifically authorizing such a use of funds. The specific use was not identified.

The “Tourism Alliance,” which presented itself as a real organization, also reviewed with the subcommittee their preliminary recommendations for a consensus on a more streamlined method of distributing funds generated by the existing taxes, and a proposed new tax on timeshare maintenance fees.

The recommendation was to return the same amount of revenue to those counties that are low- to no-net revenue generators as under the current structure and then distribute the balance to those cities and counties that generate the taxes in the ratio of the amount generated.

These funds would be distributed as follows: 50 percent for general fund use and 50 percent restricted to tourism-related marketing uses. This preliminary proposal can be viewed here.

Jack Jackson is a Summerville resident who is state director of South Carolina Fair Tax.