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The Economic Impact of Tourism in the City of North Myrtle Beach and the Potential Impact of a 1% Sales Tax for Destination Marketing

  • A 1% sales tax within the City of North Myrtle Beach would generate an estimated $4.5 million in the first year.
  • Visitor spending would generate an estimated 80%, $3.6 million, of the total sales tax collection.  Local residents would generate roughly 20% of the tax collections, about $900,000, which translates into an average of about $57 per person per year.
  • The 1% sales tax could potentially generate an estimated $181 million in new visitor spending within the City of North Myrtle Beach.
  • The projected increase in visitor spending would support an additional 3,000 jobs within the City of North Myrtle Beach.

To see the full report, "Potential Impact of a 1% Sales Tax for Destination Marketing" click here (pdf file).  This report was prepared by Dr. Don L. Schunk, Coastal Carolina University and the BB&T Center for Economic and Community Development.

Frequently Asked Questions

What is this and who proposed it?

In 2009, the SC Legislature enacted a bill which amended the code of laws of South Carolina, 1976, by adding Article 9 to Chapter 10, Title 4 enacting the “Local Option Tourism Development Fee Act”.. 

This act allows a county in which at least fourteen million dollars of state accommodations tax revenues have been collected in a fiscal year and a municipality located in such a county to impose a fee not to exceed one percent of amounts subject to tax pursuant to Chapter 36, Title 12, the South Carolina Sales and Use Tax Act, for not more than ten years, to provide that the county may impose the fee by ordinance in the unincorporated areas of the county and a municipality may impose the fee by ordinance in the municipality, to provide for the administration of the fee, and to provide uses for which the fee revenue must be applied, including tourism promotion, property tax rollback, and capital projects  promoting tourism causes.

Why did the SC Legislature pass this local option tax?

They understand the critical impact tourism has on our economy and felt this was an option needed by our local government to generate new revenue versus reducing public services or increasing the local property tax rates.

Why does the chamber of commerce receive these funds?

The North Myrtle Beach Chamber of Commerce is the Designated Marketing Organization (DMO) selected by the City, with the responsibility for marketing and promoting North Myrtle Beach as a tourism and visitor destination.  The law requires that the DMO receive these funds.

How can these funds be spent?

The only use of these funds is for out-of-state marketing and advertising for the purpose of attracting more visitors to our city which means more dollars in our economy, which protects the citizens tax base and property values.

How can the city of North Myrtle Beach use these funds?

The law requires that 20% of the taxes collected be provided to the city.  The city may determine to use these funds for a tax reduction to its citizens, and/or to fund tourism related capital projects, which also would be available for local citizen’s use.

Why is this being discussed now?

The law providing this local option was enacted in 2009.  MYRTLE BEACH adopted it right away and has had the use of these designated funds for more than a year.  North Myrtle Beach decided to wait and see the impact on Myrtle Beach before moving forward.  Based on the most recent Economic Impact Study, the results have been overwhelmingly positive.  Visitors have increased and local taxpayers have benefited as well.

What is the projected impact for North Myrtle Beach if this 1% tax is approved?

According to the Economic Impact Study prepared by Coastal Carolina University:

  • Approximately $4.6 million dollars will be generated;
  • 80%, or $3.6 million would be generated by visitors to our city;
  • 20%, or $900,000 would be generated by local residents which is about $57 per taxpayer;
  • Total economic impact to our city from such a tax is estimated at $181 million dollars in “new” visitor spending (This equates to a $77 dollar return for every $1 we spend)

What is the downside to adopting this 1% tax?

The 1% tax has been offered as a tourism development fee to allow our local municipality a way to generate new revenue and protect our local tax base and services enjoyed by our citizens.  Currently, our city is projecting a considerable reduction in tax collections which could mean either a reduction in services or an increase to our tax rate.  As evidenced at a recent city council meeting, there are limited funds available in the capital expenditures budget for this entire fiscal year.  The 1% tax increase would provide for approximately $900,000 annually for the city’s use.  It’s difficult to find a reason not to support this tax.

Who is accountable for these funds?

The DMO (Chamber) is required to provide an accounting of every dollar spent from this tax and report this publicly.

Will the taxes raised benefit any other area of the state or organization?

Absolutely not.  The law requires these proceeds be collected in North Myrtle Beach, and stay in North Myrtle Beach.  These funds can only be used for out-of-state advertising, and for the city to use its share as outlined above:  Reduce taxes and /or fund capital projects.

Can these funds be used by the Chamber or City for any other purpose?

Absolutely not.  No funds can be used for administrative expenses, salaries or compensation of any kind.

Questions about the 1% tax?

Let us know what you think or ask your questions by emailing: Feedback@nmbchambermembers.com and we will try our best to provide an answer.

To see the full report, "Potential Impact of a 1% Sales Tax for Destination Marketing" click here (pdf file).  This report was prepared by Dr. Don L. Schunk, Coastal Carolina University and the BB&T Center for Economic and Community Development.

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