Each year, South Carolina raises over $75 million through the “Accommodations Tax,” sometimes affectionately called the “Bed Tax” to describe the basis on which the tax is collected.
If you ever stay in a hotel and scan the bill, you will see that you pay this 2% tax as an “add-on” to sales and other taxes like the hospitality tax. This “Accommodations Tax” is placed on hotel and motel or any other rentals that are not considered long-term, so they are, to a great degree, connected with tourism.
Begun in 1984, this special tax is placed into a “pot” in the state treasury then doled out through Chambers of Commerce and Convention and Visitors Bureaus primarily to the highest tourism areas of the state–with the purposes of supporting and increasing tourism activities, receipts and boosting jobs in those areas. There are five large areas in South Carolina receiving large sums of tax dollars from this “Tourism Tax”–Myrtle Beach, Hilton Head Island, Charleston, Beaufort and now Greenville.
The total amount from the “Accommodations Tax” expected for Fiscal Year 2022-2023 is $75.9 million.
In addition, there is a “Local Tourism Development Sales Use Tax” added for which counties receiving $14 million a year or more from the “Accommodations Tax” are given additional funds.
HOW THESE MONIES ARE SUPPOSED TO BE USED
According to South Carolina laws Title 6, Chapter 4 (Section 6-4-10), for a municipality or county in areas collecting more than $50,000 in Accommodations Tax, the first $25,000 plus 5% of the remaining balance of tax funds must go to the general fund of the municipality. Then 30% of the remainder must go to a fund to increase tourism through publicity, with funds channeled through Chambers of Commerce, Convention and Visitors Bureaus, Regional Tourism commissions or similar entities. (See SC State Law for further information.)
All utilized agencies must be non-profit, use funds only for advertising and promotion, and must submit an accounting of activities and use of funds. The remainder of the tax balance for the municipality or county must be used by the county for tourism-related expenditures but can also be used for law enforcement, traffic control, public facilities or highway and street maintenance but not for uses generally covered by regular budgetary expenditures.
In general, the large percentage of these funds in high tourism areas where large amounts of tax dollars are brought in is to go, by law, to only the promotion of tourism in those areas. One way or another, the targeted high tourism areas of the state receive tax funds to aid in bringing visitors not to specific places such as hotels or motels but in a general form of publicity to that particular area by promoting the positive activities and resources offered there for visitors who come.
No doubt, the influx of additional funds to these tourist areas has aided in increasing tourism since the tax was begun.
DOUBTING THE DISPOSITION OF TOURISM FUNDS
One resident of Bluffton, South Carolina, who has brought attention to the use of Tourism Funds in recent years strongly questions the way funds have been distributed and the legality of their handling as described in the SC statute on Tourism.
Skip Hoagland, a member of the Bluffton Chamber of Commerce, has run a technology business for many years near Hilton Head Island. He has expressed through a Rumble video and by interview his concerns about the improper use of these funds. In effect, he states that some funds are used to “line recipients’ pockets.” He even goes so far as to offer a reward of $1 million himself to anyone who can disprove what he claims to be true.
In a Rumble video by “The Patriot’s Truth” uploaded in May 2022, Hoagland claims that many tourism funds are inappropriately used against state laws which include marketing of attractions, events and sports and various projects for tourism and local entertainment. He strongly states that South Carolina Attorney General Alan Wilson is not following his mandate to see the funds are properly spent.
According to Hoagland, there are “millions of dollars given to chambers and convention bureaus without oversight or accountability as required–maybe as much as hundreds of millions of missing and unaccounted for dollars over the 30 years the tax has been collected.”
Hoagland claims in his video to have proof of misuse of funds, but he is also calling for “increased transparency and forensic and regular audits of funds for all those receiving the “A-Tax.” He believes that some non-profits are created to allow funds to be used by private individuals or those connected directly to large corporations, in violation of restrictions on the money being used “for the good of all.” These agencies, he claims, are really shams.
TRANSPARENCY WITH TAX DOLLARS
While Hoagland has been on the track of misuse of Tourism dollars over at least five years, he pushed strongly for the opening of “books” for the Bluffton Chamber of Commerce to the public to allow total transparency. Three members requested this information be made available. The case ended up in court, eventually going all the way to the South Carolina Supreme Court–which surprisingly ruled that the information should remain sealed from public view, primarily because the Hilton Head-Bluffton Chamber of Commerce is not a public body therefore not subject to Freedom of Information Act, though in 2017 they spent $1.8 million in A-Tax money. (TheItem.com, The Sumter Item, “Ruling Misses Point on Chambers of Commerce, Taxpayers’ Dollars,” Myrtle Beach Sun News Editorial Board, June7 2018.)
One justice, John Cannon Few, strongly disagreed with the court’s ruling in this case, believing that public transparency should be afforded, but others outnumbered him. The books remain closed.
Hoagland states that this blocking of public information on how tax dollars are spent violates the right of citizens to know how their money is being used. “This is totally against our rights as citizens of our state and country,” said Hoagland. “It isn’t right to hide how our tax dollars are spent.”
Some others agree with Hoagland. Whether they believe there is misuse of funds or not, they agree that to keep this information private is simply unfair and likely illegal.
In 2020, Hoagland ran against now state representative (House District 118) Bill Herbskerman and infuriated him with accusations and emails accusing him of “receiving kickbacks, payoffs and favors” through the SC Department of Parks, Recreation and Tourism,” under the direction of Duane Parrish, appointed by then Governor Nikki Haley. Hoagland claimed Herbskerman was “laundering kickback money” through his numerous South Carolina restaurants. Hoagland also implicated another state representative, Weston Newton, in possible payoffs through the SCPRT. Herbskerman responded violently in print and threatened lawsuits. (Fitsnews.com, “South Carolina Lawmaker Threatens to Sue Lowcountry Political Activist,” Nov 9 2020.)
In early 2021, the Mayor of Bluffton Lisa Sulka was awarded $50 million against Hoagland in a libel suit she brought.
Hoagland most recently, however, pins the crux of the problem on Attorney General Wilson. “It clearly states in our South Carolina laws that oversight of this issue and enforcement of the law falls under Wilson’s responsibility. So he simply is not doing his job as required if he allows these funds to be illegally or carelessly used without oversight. He needs to do the job he was elected to do.”
The question still remains, though: Are these “hidden tax pay-outs” by non-profit chambers, convention and visitors bureaus and non-profit agencies with so little oversight possibly misusing potentially millions of taxpayer tourism dollars? We may never know.
Lisa Carol Rudisill, M.T.S., is a magna cum laud graduate of NC State University and Liberty University where she earned a Master of Theology. She writes novels about her family history during the Civil War in North and South Carolina. She is a freelance writer, editorialist and a contributor to The Standard newspaper.
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ROFL you mean there might be corruption in a government program?
That’s not news.
News would be if there isn’t any.