Myrtle Beach can’t use tourism fees for beautification project, attorney general rules

Myrtle Beach officials aren’t legally allowed to use revenue from tourism development fees for a beautification project, an opinion from the South Carolina attorney general’s office says.

The city approached the Myrtle Beach Area Chamber of Commerce and requested tourism development fees (TDF) be used for the project, according to the opinion, prompting S.C. Senator Luke Rankin, who represents much of Horry County as a Republican, to ask the attorney general about the legality of using fees in that way. Messages seeking comment were left with Rankin.

“We are not clear as to what ‘beautification’ may entail,” wrote assistant attorney general Cydney Milling in the opinion. “This Office may only render opinions on issues of law and, unlike a court, cannot investigate and determine factual questions. Therefore, we cannot render an opinion as to whether beautification in encompassed within the purposes of the Act. However, we believe beautification generally would not be considered tourism advertisement or promotion. Furthermore, we do not believe a beautification project generally would fall under the exceptions allowed.”

Chamber of commerce spokesperson Sarah Stephens referred The Sun News to the city of Myrtle Beach for questions about the project, but said the chamber is aware of the opinion.

“Tax laws are complicated and important,” Stephens wrote in an email to The Sun News. “We know them well and understand the requirements of the TDF, and we intend to comply with the Attorney General’s opinion.”

Myrtle Beach City Manager John Pedersen confirmed the city asked the chamber of commerce to help fund the project, which includes adding flower baskets, banners and murals along Kings Highway and Ocean Boulevard. But he said the city was indifferent about where the funds came from, and officials didn’t specifically ask to use tourism fees.

He added that the city and the chamber of commerce will continue to discuss the beautification project and how to fund it.

“It is something that we believe can be funded,” Pedersen said. “It certainly is a promotion of the city.”

The opinion, released Sept. 14 and written by Milling, said the fees can’t be used for the beautification project because state codes only outline specific uses of the fees. The fee is a 1% tax on goods purchased within the city limits and most of the money is used to encourage people from outside the state to visit the area.

The state code lays out a few exceptions: at least 20% of the fees can be used for certain property tax credits and can fund tourism-related capital projects. The beautification project in question didn’t fall under these categories, and can’t be funded by the TDFs, the Millings wrote.

Pedersen said the project could be considered promotion, and there’s a possibility that TDFs could still fund it. He said using the words “tourism advertisement and promotion” was likely intentional, and the word “promotion” leaves some room for interpretation.

“If the legislature would have meant only advertising, they would have only used one word,” he said.

This story was originally published September 23, 2020 at 2:12 PM.