8. Hospitality Tax
The Hospitality Tax is a uniform tax of 2% on the gross proceeds derived from the sales of prepared meals, food, and beverages sold in or by establishments, or those licensed for on- premises consumption of alcoholic beverages, beer, or wine.
Pursuant to SC Code s. 6-1-730, revenue from local hospitality tax may be used for the following purposes:
(1) tourism-related buildings including, but not limited to, civic centers, coliseums, and aquariums; (2) tourism-related cultural, recreational, or historic facilities;
(3) beach access and renourishment; (4) highways, roads, streets, and bridges providing access to tourist destinations; (5) advertisements and promotions related to tourism development; or (6) water and sewer infrastructure to serve tourism-related demand.
In 2014, the City of Charleston received more than $13 million in Hospitality Tax revenue from the F&B industry. According to the City of Charleston’s records, the expenditure of these funds was as follows:
$5,658,566: General fund;
$4,529,000: Capital Improvements fund;
$750,000: Gaillard Center operating start-up costs;
$572,000: Visitor Center fund;
$269,742: Energy Performance fund;
$150,000: Daniel Island Tennis Center maintenance;
$100,000: Ballpark fund;
$210,000: Aquarium annual capital maintenance;
$210,000: Gibbes annual capital maintenance;
$170,000: Entertainment District law enforcement & maintenance;
$132,000: CVB promotions & advertising;
$130,000: International African-American Museum;
$83,164: Parking facilities fund;
$68,000: Cultural Festivals fund;
$35,000: CVB Gaillard exhibit hall event marketing support;
$19,500: Angel Oak;
$17,500: Black expo;
$3,800: Riverwalk maintenance.
Considering the significance and statutory purpose of this tax revenue, what would you do to ensure that the use of these funds is efficient, transparent, and is beneficial to the businesses that pay this tax?
The food and beverage industry provides million dollars in tax revenue for the city. In 2015, the estimated hospitality tax revenue will be $13,807,500. The funding decision process needs to be transparent, fair and smart based on the strategic plans for our city.
The Hospitality Tax is intended to help pay for tourism related projects and priorities. As Mayor, I won’t use the hospitality tax money as a slush fund for other unrelated projects and will make sure it is spent properly and transparently. As someone who has spent almost his entire life in the hospitality industry, I know how important it is for the city to spend this money wisely and as mayor I will.
Again, this is why I believe the performance audit I will conduct in my first year as Mayor is so important. We need to ensure that we are spending taxpayer dollars in an efficient, transparent manner, and to do that, we have to have reliable metrics. After we have those numbers in hand, we’ll be in a much better position to deliver real accountability to our residents and local businesses, and that’s exactly what I will do as Mayor.
To learn more, please visit the Better City Services section of my plan: