County talks Hospitality Tax rules and disbursements

By Samantha Lyles, Staff Writer, slyles@newsandpress.net

Darlington County Council took steps to change funding methods for county festivals and events during a May 15 special called meeting focused on Hospitality Tax (H-Tax) policy and procedures.

Since implementing a two percent H-Tax on sales of prepared food in unincorporated areas of the county in 2016, Darlington County has collected $390,157 (as of April 2017). Annual H-Tax revenues are estimated to be $235,804. State law dictates that H-Tax money may be used for tourism related buildings, facilities, roads to access tourism destinations, and water and sewer infrastructure to serve tourism-related demand.

Also, H-Tax money can be used for advertisement and promotions related to tourism development. This option may help Darlington County festivals and events by providing access to a larger pool of funding than the current $55,000 available through the county’s Accommodations Tax (A-Tax).

That A-Tax funding pool is derived from the 2 percent tax levied on all overnight stays in hotels, motels, inns, and bed and breakfast establishments in Darlington County. A-Tax monies are supposed to be used exclusively to fund tourism related activities that draw overnight guests into area hotels from over 50 miles away.

Council member Lewis Brown addressed this matter, saying that funding local one-day festivals (like the Lamar Egg Scramble, Society Hill Catfish Festival, and Darlington’s Sweet Potato Festival) at a set amount each year through H-Tax would alleviate the need to prove these events draw overnight guests to area hotels – the “heads in beds” criteria used to determine if they should receive A-Tax funding. Brown suggested setting aside $10,000 to be split equally among these three festivals.
Council member Bobby Kilgo agreed, noting that multi-day events like RenoFest verifiably result in tourists from over 50 miles away spending nights in local hotels and inns, and such events meet the A-Tax requirements. But other events, like the one-day Freedom Fest fireworks and music festival scheduled for July 1 at the Darlington Raceway, can apply for H-Tax funding without having to provide supportive data regarding related hotel stays.

Kilgo also brought up a potential future use for Hospitality Tax revenues: using that income to leverage bonds and finance large-scale projects.

County administrator Charles Stewart suggested setting aside the first $35,000 in H-Tax funding to defray the cost of providing emergency services at the Darlington Raceway during the annual Southern 500 race weekend. Council agreed to this request and asked that it be written into a resolution for consideration at their June 5 meeting.

Council asked Stewart to incorporate more stringent requirements into the county’s A-Tax ordinance, requiring proof of hotel stays in order to qualify for funding from that pool. By tightening those requirements, many of the A-Tax applicants should shift over to applying for H-Tax monies. These requests must be made in writing to the county administrator and will be considered by Council as a body, not decided or approved by any individual county staffer or member of County Council.

Also at this meeting, Council approved second reading of Ordinance 17-05, enlarging the joint Florence/Darlington County Industrial and Business Park (which is located in Florence County) so that Darlington County may receive 1 percent of the net FILOT (Fee In Lieu Of Taxes) payments from Florence County.

Author: Duane Childers

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