How much of that North Myrtle Beach tax increase would go back to residents?

North Myrtle Beach residents could get a property tax rebate if they approve a new tourism development fee, but the Chamber of Commerce is worried that residents won’t get as much of a rebate as they could.

Documents provided by councilwoman Nikki Fontana show 80 percent of the tax going to the chamber, 16 percent going to the city and 4 percent used for tax rebates.

The Chamber of Commerce, which would get the bulk of the 1-percent sales tax increase, wants more of that money to go back to tax rebates.

“We are extremely confused as to why they wouldn't want the citizens of North Myrtle Beach to garner the full amount allowed for them,” Scott Ellis, North Myrtle Beach Chamber of Commerce board chairman said in a statement Wednesday. “Here’s another mathematical fact: the City's figures on potential tax rebates for residents are artificially low, simply because the City is not passing the full 20 percent allowed on to the citizens...a fact that they have never disclosed.”

This is how the documents provided by Fontana show the money broken down:

• Total tourism marketing tax revenue annually - $8,500,000
• 80 percent out-of-state tourism promotion - $6,800,000
• 20 percent amount available to the city - $1,700,000
• 80 percent of the total revenue available to the city for public parking facilities acquisition - $1,360,000
• 20 percent of the total revenue available to the city for property tax relief - $340,000

By law, at least 4 percent of the funds must go to tax rebates, meaning city residents would receive $51 in tax relief for an average $250,000 home. If the full 20 percent was used for tax rebates, residents would receive $255 in tax relief for the same home.

However, the city does not have a specific plan for how the money will be used, North Myrtle Beach Mayor Marilyn Hatley said.

“I think it’s too early for any entity to jump in and start telling the city what they should do or what they shouldn’t do,” Hatley said. “It depends on the budget, it depends on what the tax levies are. We have the lowest property tax probably in the state of South Carolina. So we have to look at the number and we have to see how much we can roll back. But we know we have to roll back at least 20 percent. What we need to do is let the people decide if they want to tax themselves.”

In the statement, Ellis says, “the Chamber would like the citizens to receive the full 20 percent allowed by the TDF bill in a tax rebate. As it was stated numerous times during the elections, the City has $30-$35 million in reserves, so there is confusion as to why they would want to keep a large percentage of the TDF that could benefit the citizens directly.”

During Monday night’s council meeting, members voted in favor of a referendum, which will give residents the opportunity to vote on whether or not the TDF should be implemented in the city.

Council members could have decided to vote on the tax through a super-majority vote, which would not give residents the opportunity to give their input.

In 2016 Bill Griste, board member of the Chamber of Commerce, asked council to impose the super-majority vote. In a letter written to members he stated, “I would like to thank each of you for the opportunity afforded to the North Myrtle Beach Chamber of Commerce over the past four months to discuss the need for our City’s super-majority implementation of the 1-percent tourism development fee.”

He continued, stating that the TDF would would “enhance our destination’s ability to be competitive, while supplying much needed capital improvement dollars to the City of North Myrtle Beach, greatly increasing our City’s tax revenue, and provide our residents property tax relief. A win, win, win, win scenario.”

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,” 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.”

The TDF is applied while shopping or eating at a restaurant, and runs for 10 year periods. Once one 10 period is up, the city must hold another referendum, giving voters the opportunity to keep the tax or get rid of the tax, Hembree said.

Specifically, the TDF is applied to prepared food, retail sales, accommodations, guest charges and sales at hotels and mixed liquor drinks.

“If the chamber wants North Myrtle Beach voters to favor the proposed TDF in the March 6 referendum, it should busy itself in preparing an explanation for the voters as to how spending about $6.8 million a year out of state to draw thousands of new tourists to North Myrtle Beach will add to the quality of life here,” city spokesman Pat Dowling said. “That is the main question residents ask about the proposed TDF. The current strategy of selling the proposed TDF as some property tax relief bonanza and beating the city over the head with it in the process may bring its proponents some emotional relief but it will not win the day.”

This story was originally published December 6, 2017 at 12:09 PM with the headline "How much of that North Myrtle Beach tax increase would go back to residents?."