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2186Ratification Number: 347Act Number: 316Introducing Body: HouseSubject: Relating to retail license sales and use taxes
(A316, R347, H2186)
AN ACT TO AMEND CHAPTER 35 OF TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO RETAIL LICENSE SALES AND USE TAXES, BY ADDING ARTICLE 6 SO AS TO LEVY A SALES TAX OF TWO PERCENT OF THE GROSS PROCEEDS ON THE RENTAL OF TRANSIENT ACCOMMODATIONS, TO PROVIDE THE MANNER IN WHICH THE FUNDS GENERATED BY THE TAX MAY BE EXPENDED AND PROVIDE A FORMULA BY WHICH THE FUNDS ARE DISTRIBUTED TO THE MUNICIPALITIES AND COUNTIES OF THIS STATE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The General Assembly finds that areas of the State which have a high concentration of tourism activity may also be required from time to time to provide additional county and municipal services including but not limited to law enforcement, traffic control, public facilities, and highway and street maintenance, as well as the continual promotion of tourism. The purpose of this act is not to provide an additional source of revenue for counties and municipalities required to provide services normally provided by the county or municipality but to promote tourism and enlarge its economic benefits through advertising, promotion, and providing those facilities and services which enhance the ability of the county or municipality to attract and provide for tourists.
Accommodations tax levied
SECTION 2. The 1976 Code is amended by adding to Chapter 35 of Title 12:
Section 12-35-710. (1) In addition to the tax levied in Sections 12-35-510, 12-35-810, and 12-35-1120 and Article 11 of Chapter 35 of Title 12, there is levied and imposed an additional sales tax of two percent of the gross proceeds from the rental of transient accommodations, including campgrounds, which are subject to the state sales tax.
The tax provided for in this section shall be collected by the Tax Commission in the manner that the sales tax prescribed in Chapter 35 of Title 12 is collected. All provisions of law other than Section 12-35-520 applicable to the sales tax must apply with equal force and effect to the additional sales tax on transient accommodations, including the requirement that all persons subject
to the tax must acquire the necessary sales tax license provided for in Section 12-35-320. The proceeds of the tax, less the Tax Commission's actual incremental increase in the cost of administration, must be remitted quarterly to the municipality or to the county in which it is collected. Procedures for collection of the tax shall be established by regulations promulgated by the Tax Commission. In addition to other regulations the commission considers necessary, the commission's regulations must prescribe that the customers paying the sales tax on transient accommodations must have the regular four percent sales tax and the additional tax on accommodations billed and paid in a single tax item listed as 'tax', without itemizing the two taxes as separate items. When any business is subject to the accommodations tax and such business has more than one place of business in the State, the licensee shall separately report in his sales tax return the total gross proceeds derived from business done within and without the corporate limits of municipalities.
(2) The two percent transient accommodations tax provided for by this section may not be increased except upon approval of two-thirds of the membership of each House of the General Assembly. However, the tax may be decreased or repealed by a simple majority of the membership of each House of the General Assembly.
Section 12-35-720. (1) The funds received by a municipality or a county must be allocated in the following manner: (A) The first twenty-five thousand dollars must be allocated to the general fund of the municipality or county and shall be exempt from all other requirements of this article. (B) Twenty-five percent of the remaining balance must be allocated to a special fund and used for advertising and promotion of tourism so as to develop and increase tourist attendance through the generation of publicity. To manage and direct the expenditure of these tourism promotion funds, the municipality or county must select one or more organizations, such as a Chamber of Commerce, Visitor and Convention Bureau, or Regional Tourism Commission, which have an existing, ongoing tourist promotion program or, if no such organization exists, to create an organization with the same membership standard as put forth in paragraph (3) of this section. To be eligible for selection the organization must be organized as a nonprofit organization and must demonstrate to the municipality or county that it has an existing, ongoing tourism promotion program or that it can develop an effective tourism promotion program. Prior to the beginning of each fiscal year, any organization receiving funds collected pursuant to the provisions of this article from a municipality or county must submit a budget of planned expenditures. The organization must receive the approval of the municipality or county which distributed the funds prior to expenditure of the funds. At the end of each fiscal year, any organization receiving funds must render an accounting of the expenditure of the funds to the municipality or county which distributed them. (C) The remaining balance received by a municipality or county must be allocated to a special fund and used for tourism-related expenditures.
The term 'tourism-related expenditures' includes the following types of expenditures: advertising and promotion of tourism so as to develop and increase tourist attendance through the generation of publicity; promotion of the arts and cultural events; construction, maintenance, and operation of facilities for civic and cultural activities including construction and maintenance of utilities for such facilities; the criminal justice system, law enforcement, fire protection, solid waste collection and health facilities when required to serve tourists and tourist facilities; public facilities such as restrooms, dressing rooms, parks and parking lots; tourist shuttle transportation; control and repair of waterfront erosion; and operating visitor information centers. Provided, however, that in the expenditure of funds, county councils are required to promote tourism and make tourism-related expenditures primarily in the geographical areas of the county in which the proceeds of the tax are collected where it is practical. Any person or political subdivision which determines that the expenditure of accommodations tax proceeds by the county is not substantially in compliance with the provisions of this paragraph may seek relief to obtain compliance in the Court of Common Pleas of the county concerned.
(2) A municipality or county may issue bonds or enter into other financial obligations or create reserves to secure obligations for the purposes of financing all or a portion of the cost of constructing facilities for civic activities, the arts, and cultural events which fulfill the purpose of this article. The annual debt service of indebtedness incurred to finance such facilities or lease payments for the use of the facilities may be provided from the funds received by a municipality or county from the accommodations tax in an amount not to exceed the amount received by the municipality or county after deduction of the accommodations tax funds dedicated to the general fund and the advertising and promotion fund as provided for in this article. Provided, however, that none of the revenue received by a municipality or county from the accommodations tax may be used to retire outstanding bonded indebtedness incurred prior to July 1, 1984.
(3) A municipality or county receiving revenue from the accommodations tax must appoint an advisory committee to make recommmendations on the expenditure of revenue generated from the accommodations tax. The advisory committee shall consist of not less than five members with a majority of the committee members being selected from the hospitality industry of the municipality or county receiving the revenue.
Section 12-35-730. For the purposes of this section 'county area' means a county and all municipalities within the geographical boundaries of that county. There is hereby created an account to administer the accommodations tax as authorized by this article. It must be administered by the State Treasurer in the following manner:
(a) At the end of each fiscal year and prior to August first a percentage, to be determined by the State Auditor, must be withheld from those county areas collecting four hundred thousand dollars or more from that amount which exceeds four hundred thousand dollars from the tax authorized by this article and that amount must be distributed to assure that each county area receives a minimum of fifty thousand dollars; provided, however, that the amount withheld from those county areas collecting four hundred thousand dollars or more must be apportioned among the municipalities and the county in the same proportion as those units receive quarterly remittances as provided in subsection (1) of Section 12-35-710; provided, that if the total collections as a result of the tax imposed by Section 12-35-710 in any fiscal year after 1984 exceed such collections for fiscal year 1984, this fifty thousand dollar figure shall be increased by seventy-five percent for that fiscal year. The difference between the fifty thousand dollar minimum and the actual collections within a county area shall be distributed to the eligible units within the county area based on population as determined by the most recent United States census.
(b) At the end of each fiscal year and prior to August first, the State Auditor must distribute to each county area collecting more than fifty thousand dollars but less than four hundred thousand dollars an additional fifteen thousand dollars; provided, that if the total collections as a result of the tax imposed by Section 12-35-710 in any fiscal year after 1984 exceed such collections for fiscal year 1984, this fifteen thousand dollar figure shall be increased by seventy-five percent for that fiscal year. This amount must be distributed in the same manner as the fifty thousand dollars provided in item (a) of this section. The amount paid those qualified county areas under the provisions of this item must be paid from the account created under the provisions of this section.
(c) Any amount withheld in excess shall be distributed to the county areas whose collections exceed four hundred thousand dollars based on the ratio of the funds available to the collections by each county area.
(d) Any county areas receiving fifty thousand dollars under the provisions of this section or from the provisions of Section 12-35-710 are excluded from the requirements of Section 12-35-720, except that the fifteen thousand dollars paid to those county areas collecting more than fifty thousand dollars but less than four hundred thousand dollars as provided in item (b) of this section must be allocated to a special fund and used for the purposes as required in item (B) and (C) of subsection (1) of Section 12-35-720 and an advisory committee must be appointed as provided in subsection (3) of Section 12-35-720."
SECTION 3. If any section, subsection, or part of this act shall be declared unconstitutional, it shall be severed from the act, and the remaining provisions hereof shall remain in full force and effect.
SECTION 4. This act shall take effect July 1, 1984.