Residents in this beach town will get to decide in March if they want to implement a controversial 1-percent sales tax. This comes after North Myrtle Beach Council passed a resolution for a referendum Monday night.
The tax, known as the Tourism Development Fee, is used for marketing the city. It’s applied while shopping or eating at a restaurant, and runs for 10 years.
The adoption of the resolution now gives voters 90 days to learn about the tax before they make the decision March 6. If residents vote for the tax, it will go into effect in June or July.
“What we will do is try our best to get out and educate the public on what is going to happen as this is put on the referendum,” councilwoman Nikki Fontana said. “We’re going to explain to them what the TDF is and how it’s going to affect them, and just produce some numbers and show them how this is going to work. If they are in favor, or if they are not in favor of it. So we just need to educate everybody and we’ll help in doing that.”
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Over the past few years, the North Myrtle Beach Chamber of Commerce has lobbied for the tax.
In May 2016, chamber of commerce board member Bill Griste sent a letter to city council, asking members to immediately pass the 1-percent sales tax. Part of the letter states:
“Currently, the 1-percent TDF law is the only law that can be passed immediately by city council to provide these important funds. In light of the recent proposed amendment to change the procedure to implement the TDF via a referendum only scenario; it is now more important than ever that our Council take immediate action and implement the 1 percent TDF by super-majority vote. There is no time to waste and we are ready to help you achieve the City’s objectives.”
During a council meeting in July 2016, members decided to send a letter to the chamber denying their request to pass the additional 1-percent sales tax.
In order to bring a referendum to the ballot, council had to approve the resolution twice. Council decided in 2016 to wait on presenting residents with a referendum since Horry County was in the process of preparing a referendum on the Ride III, a 1-percent transportation funding sales tax.
During the meeting Monday night, Scott Ellis, chairman of the board for the chamber said, “Thank you for your support in advancing the TDF bill into becoming a reality for our great citizens of North Myrtle Beach. It demonstrates, as our city leaders, your understanding of the critical need of a sustainable revenue source and our continued expanded marketing of North Myrtle Beach, and our main source of revenue, which is tourism while, at the same time, providing our citizens with true tax relief on their primary residence. It is truly a win win.”
Does North Myrtle Beach need the TDF?
Along the Grand Strand, the TDF is used by the City of Myrtle Beach, which has just over $27 million annually in total tourism marketing tax revenue, according to documents provided by Fontana.
Based on homes with a $250,000 market value, this means that city residents save about $600 on the proposed tax credit.
For North Myrtle Beach, the documents show that the city receives $8.5 million in total tourism marketing tax revenue annually. This means that residents will save $50 on the proposed tax credit, based on homes with a $250,000 market value.
“During my campaign, when it came up, most of the people that I came in contact with were not in favor of the TDF,” Fontana said. “They did not want this. They were more interested in doing the capital one percent municipal, because they know we have issues we have to tackle with parking, drainage, beach renourishment, infrastructure and things along that line.”
The 2015 storm created or highlighted issues the city didn’t realize existed, such as drainage and flooding problems, Fontana added.
“Right now we’re already at maximum capacity during the season so they’re more concerned with their homes flooding during another storm or another hurricane,” Fontana said. “So those are the things that I think are more important than advertising right now, doing digital advertising.”
Councilman Bob Cavanaugh, who was expected to oppose Fontana, was not at the meeting, and did not immediately return a phone call to The Sun News.
Here’s what the TDF would apply to:
- Prepared food
- Retail sales
- Guest charges and sales at hotels
- Mixed liquor drinks