ATAX Task Force Approaches Finish Line

By Brian Sherman for The Island Eye News

The Isle of Palms Accommodations Tax Advisory Task Force moved closer to completing its job May 12, hearing comments from the general public for the first time and holding a brainstorming session concerning the recommendations it will make to the IOP City Council. Two of the three speakers during the public comments part of the meeting were members of the city’s Accommodations Tax Advisory Committee. Glenda Nemes and Doug Truslow both were critical of the city’s current arrangement with the Charleston Area Convention & Visitors Bureau. Robert Smith, the owner of Charleston.com, also spoke. Task Force Chair and City Councilman Rusty Streetman said the newly-formed Isle of Palms Chamber of Commerce would make a presentation to the group on May 24, which could be its last meeting. Streetman said the Task Force might meet one more time after that before presenting its findings to the full Council. The Task Force was created by a unanimous vote of the Council on Feb. 22 and given six months to make its recommendations on what the city should do about what is expected to be more than $800,000 in accommodations taxes charged by the state of South Carolina. At the time, Streetman said he hoped the committee would get the job done in a few months. The funds in question are generated by the 2% tax charged by the state on short-term rentals. After the state takes a small amount to distribute to government entities that have little or no tourism-related income, the municipality where it is collected gets to keep $25,000 plus 5%. The remainder is split into two pots: The city must spend the 65% pot on projects and services related to tourism, while the 30% pot must be directed to a nonprofit organization and spent on attracting overnight visitors. The CVB has been the Isle of Palms’ destination marketing organization for more than two decades. At the April 7 meeting of the Accommodations Tax Advisory Committee, Chamber President Katrina Limbach stated that the Chamber’s long-term goal is to become IOP’s DMO but added that her organization should work with rather than replace the CVB. At the Task Force’s May 12 meeting, Nemes suggested that the city should abandon its relationship with the CVB and form its own DMO, pointing out that members of the ATAX Committee have done extensive research on the subject, including looking at “the financial benefits of having our own tourism board.” Truslow agreed with her, stating that the trend is away from large DMOs that control a lot of money.

“We can make sure our money is spent for the Isle of Palms and isn’t being used to subsidize others,” Truslow said. “We’re dealing with an amount of money now so that we can focus on ourselves.” Smith, who purchased Charleston.com six years ago, told Task Force members that “we are the big dogs” and asked for the opportunity to help the city. “I’m just asking the group to consider us as a resource, maybe even a resource just for gathering information,” Smith said. During the brainstorming session, Task Force Member Curtis Kay criticized the CVB’s lack of accountability and voiced his opinion that the 30% fund be split between the CVB and a new DMO. “We’ve tried accountability in the past and it hasn’t worked,” he said.

“We’re subject to their whims. If it hadn’t been for this group, they wouldn’t be concerned with the Isle of Palms. We should control our own destiny and not be dependent on Helen giving us a website.” He was referring to Helen Hill, chief executive officer of the CVB. Sarah Vega pointed out that several local residents have suggested to her that there needs to be more flexibility on how the 30% funds are spent. City Administrator Desiree Fragoso responded that a change in how cities and counties distribute that money would have to be made by the State Legislature. Ray Burns, who serves on the Task Force and also as chair of the ATAX Advisory Committee, pointed out that the Legislature could reduce the 30% fund to a 20% fund and increase the 65% pot to a 75% pot, where cities have more control over how the money is spent. He added, however, that the CVB and other large DMOs would “fight that tooth and nail.” 

“I’m sure they have a pretty powerful lobby,” Streetman added.

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