Patriot’s Day Brings Tourism Tax Questions

By Paul Gable

The third Monday in April is celebrated as Patriot’s Day in Massachusetts and Maine. This is a state holiday that commemorates the battles of Lexington and Concord, April 19, 1775, the first two military engagements of the Revolutionary War. Maine, at that time, was part of Massachusetts.

The underlying tensions that resulted in the conflict were taxes levied on the colonies from Great Britain, most specifically the taxes on lead, paper, paint, glass and tea. Taxation without representation was the cry of the colonials. The Boston Tea Party of December 16, 1773, resulted with the British closing the port of Boston.

After 20 months of tension between the residents of Massachusetts and the British army garrisoned in Boston, the British sent regular forces out from Boston on April 19th to capture weapons stores of the colonial militia. The colonial “Minutemen” resisted beginning the struggle for independence.

It is ironic 237 years later we have our own taxation without representation controversy going on in Myrtle Beach.

Over the weekend, two stories in local media regarding the cancellation of the Sun Fun Festival and the expenditure of revenue from the tourism ad tax by the Myrtle Beach Area Chamber of Commerce drew the ire of local readers.

The Myrtle Beach City Council passed the one-cent local option sales tax to boost tourism marketing nearly three years ago. This is the only local option sales tax in the state that was ever made law without the need of having the tax approved by a referendum of the voters. A super majority vote of city council members was all that was required by state law.

A full 80% of the proceeds from the tax are turned over to the chamber for “out of area” advertising. The chamber, in turn, employs companies to help with the advertising. The companies make political contributions to chamber related PAC’s and incumbent city council members and state legislators who passed the ad tax. Those contributions are part of the current federal investigation into 2009 political contributions from local LLC’s known locally as “Coastal Kickback.”

There are other problems. The company receiving the second largest amount of the ad tax dollars, Visibility and Conversions LLC, was a startup company by a former chamber employee after the ad tax was passed. This startup received $4.7 million in revenue from the chamber in two years.

According to filings with the state Ethics Commission, Visibility and Conversions LLC donated $3,500 to a chamber related political action committee just 23 days after being formed.

According to sources familiar with chamber member businesses, many of the largest businesses in the tourism industry reduced their marketing expenses by as much as 90% because public money (from the ad tax) was being spent for them.

Other problems with the ad tax revenue include a past lack of transparency of exactly where the dollars were being spent and the unwillingness of the chamber to recognize that receiving and spending the ad tax revenue makes it a public body, according to the regulations of the S.C. Freedom of Information Act, subject to FOIA requests.

A tax passed without voter consent; public tax revenue being used to replace private marketing dollars (many associated with chamber board members); lack of transparency with the expenditure of the tax revenue; chamber associated and supported political candidates to perpetuate the system and questionable political contributions currently under federal investigation.

Sounds more comprehensive than what the American colonists rebelled against in 1775. Happy Patriots Day Myrtle Beach.


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