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Tourism: County recoups $70,000 from state tax errors
By Charles Swenson
A year of wrangling with the state Department of Revenue has earned Georgetown County an extra $70,000 in accommodations tax.
“I don’t have the money,” said Scott Proctor, the county finance director, “but it looks like it’s going to happen.”
While he said the money “doesn’t sound like a whole lot,” for Proctor and other local officials it represents a welcome shift in relations with the state agency at a time when they are working together to track down online rentals that avoid paying tourism taxes.
“We have kind of opened the door to them listening to us more,” Proctor said.
The state collects a 2 percent tax on short-term accommodations and returns a portion to the jurisdictions where the property is located. Funds are regularly misdirected between the county and the town of Pawleys Island. The county’s recent effort to try to prevent such errors began when it learned last year that it had been overpaid $278,000 by the revenue department. “We didn’t get a check or any information from DOR,” Proctor said. It was the state Department of Parks, Recreation and Tourism that notified the county that the state would deduct the money out of future payments. “It was a huge adjustment,” he said.
Proctor asked the Department of Revenue for data on its collections. He compared that against revenue from the county’s 3 percent local accommodations tax. That money is collected monthly by the county treasurer’s office. The town of Pawleys Island, which also has a local accommodations tax, started making those comparisons several years ago as a way of checking the accuracy of payments from the state.
The revenue department acknowledged that it had made other mistakes over the past two years and the net result will be “$70,000 and some change,” Proctor said.
In addition, the county gave the state a “watch list” of eight to 10 individual and corporate accommodations taxpayers where there were repeated errors. In those cases, funds have been misdirected between the county and the town of Pawleys Island, the city of Georgetown and Horry County, Proctor said.
“We’ve seen some improvements,” he said.
The state accommodations tax payment to the county for the quarter ending June 30 was $40,000 above what was in the budget for the Tourism Management Commission, the county’s marketing arm. “That was nice,” said Lauren Joseph, the tourism director. She budgeted $50,000 based on last year’s payment.
The 80 percent increase in payments doesn’t reflect an increase in overnight stays. Those are up 8 percent this year, based on the more consistent data from the local accommodations tax collections, Joseph said. The commission has a $817,357 budget for tourism promotion, funded almost entirely from accommodations tax.
The county also plans to work with the Department of Revenue in making sure people who rent their property collect both state and local taxes. A new state law increased enforcement of those taxes. “It’s already been a point of discussion here,” Proctor said.
The revenue department announced plans before the law passed for new audits and collection measures, he said. “We’ve recognized that there are a lot of them out there,” Proctor said.
He’s willing to give some the benefit of the doubt. “I think there are a lot of innocent people who just don’t know that there is a tax that has to be collected,” Proctor said. “We need to get the word out.”