The Myrtle Beach City Council has an important decision to make about the Tourism Development Fee, or TDF. Local businesses and homeowners have benefited mightily from the fee since its implementation in late 2009. Now, with the 10 year anniversary approaching, City Council must decide whether and how to renew the Tourism Development Fee.
Let’s look at what the fee is, what it has accomplished, what benefits it provides and what would happen if the fee is not renewed.
Voters in North Myrtle Beach recently rejected a similar fee, but North Myrtle Beach’s proposed property tax credit was the bare minimum allowed by state law. As shown on the attached tax bill, owner-occupied homes in Myrtle Beach receive three-and-a-half times the property tax credit that North Myrtle Beach was willing to consider. In the Myrtle Beach example, an owner-occupied home valued at $199,000 received a city property tax credit of $505.46, leaving a total city tax bill of just $111.44. That’s a savings of 82 percent.
For newcomers to the area, and others who may need a refresher, here’s the background on the Tourism Development Fee.
- The TDF is a one-percent retail sales tax established by the General Assembly, which gave options for implementing it. Myrtle Beach selected one of those options.
- The city has implemented the TDF according to state law. Eighty percent is required for out-of-market advertising, while the remaining 20 percent is for property tax credits and tourism-related capital projects.
- The goal of the TDF is three-fold:
First and foremost, to provide out-of-market advertising dollars that allow Myrtle Beach (and the Grand Strand) to compete with other coastal destinations, increase visitorship and boost the local economy;
Second, to provide a property tax credit for owner-occupied homes; and
Third, to provide funds for tourism-related capital improvement projects that will, in turn, draw more visitors and benefit the local economy.
- The TDF provides the largest municipal property tax credit in South Carolina. Owner-occupied homes in the City of Myrtle Beach currently receive an 82 percent credit on their property taxes, thanks to the TDF.
- TDF funding for out-of-market (meaning out-of-state) advertising has increased visitorship and revenue since it took effect in August 2009 by approximately 35 percent in the City of Myrtle Beach.
- The Myrtle Beach Area Chamber of Commerce provides expenditure reports for the TDF (and other public funding) on its website, www.myrtlebeachareacvb.com/accountability. This is available to all.
- State law specifies how the TDF can be used. A local government cannot change the percentages or the uses. Only the General Assembly can amend the law.
- Of the revenues collected, visitors pay most of the total. Yes, local residents pay the extra one percent sales tax on their purchases, but the bulk of the TDF revenues come from the millions of visitors who vacation here. Through the TDF, they pay not only for the increased advertising, but also for the property tax credit and for the tourism-related capital projects.
- As shown in the attached tax bill, an owner-occupied home with an assessed value of $199,000 currently receives a credit of $505.46, thanks to the TDF. To erase that credit, the homeowner would need to spend $50,500 on taxable purchases annually. ($50,500 x 1 percent = $505)
- The public has been very pleased with the property tax credit. If the City of Myrtle Beach does not renew the TDF, owner-occupied homes can expect to pay more than five times their current city property taxes.
In addition to the advertising boost and the tax credit, the Tourism Development Fee to date has funded, in whole or in part, construction or financing for the following tourism-related capital improvement projects. Without the TDF, other revenues would have been used to pay for these projects, or they would not have been built.
- The Oceanfront Boardwalk
- The Myrtle Beach Sports Center
- Ocean Boulevard Streetscape improvements (Second to Ninth Avenue North)
- Baseball Stadium improvements
- Chapin Park renovations
- Dune Walkover reconstruction
- ADA-compliant pedestrian ramps on Ocean Boulevard
- Traffic system improvements on major arteries
The City of Myrtle Beach believes that our brand is stronger thanks to the additional advertising and increased visitorship provided by the Tourism Development Fee. Further, the city believes that resident property owners are pleased with the 82 percent property tax credit they receive from the Tourism Development Fee. Property owners likely would not appreciate an effective tax increase of 550 percent if the Tourism Development Fee is not renewed in a timely manner.
Local residents and businesses are better off financially thanks to the TDF. It has generated growth in our tourism economy and provided savings to our taxpayers, through the TDF tax credit and capital improvement funding.