Could Jasper County use local tourism taxes to buy sheriff patrol cars serving tourist facilities?

Plain-English summary

In 2018, Jasper County asked whether local accommodations and hospitality tax funds could help acquire and equip sheriff’s patrol cars. The Attorney General predicted that they could, provided the county complied with the applicable statutes and showed a sufficient connection between the police service and qualifying tourism facilities. The service did not have to be exclusively for tourists.

The opinion distinguished these local taxes from the state accommodations tax. It relied on earlier opinions about a fire truck’s service area and roads serving tourist destinations. It rejected use of a revenue ruling on state accommodations tax to override the different local tax statutes. It also said whether the county could use half or all of the available local tax revenue depended on its collections under the statutory conditions.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Could Jasper County buy sheriff patrol cars with local accommodations or hospitality tax money?
A: The AG predicted yes if the police service was directly tied to the tourism facilities identified in the local tax statutes and the other statutory conditions were met.

Q: Did patrol cars have to serve only tourists?
A: No. The opinion said the service’s attendance to tourism facilities did not have to be exclusive.

Q: Did the state accommodations tax revenue ruling control these local taxes?
A: The AG said no where that ruling conflicted with the local accommodations and hospitality tax statutes.

Q: Could the county spend any amount it chose on the cars?
A: The opinion said the available share depended on revenue collections and the applicable statutory limits; it did not approve every amount.

Background and statutory framework

The county described tourist travel through its highways, local tourism activity, and a proposed allocation to sheriff vehicles. The AG analyzed local tax provisions allowing police operations directly attendant to qualifying facilities, drew from earlier fire protection and road access opinions, and distinguished the state tax revenue ruling from local tax law.

Citations and references

• The AG required “a sufficient nexus between the law enforcement service ‘directly attendant to those facilities’ and the tourist destination.”
• It said the service’s “attendance does not have to be exclusive.”

Source note

The archive title gives a different hospitality tax section from the one analyzed in the PDF. This summary follows the PDF.

Subject

On the use of local accommodations and hospitality taxes for Jasper County sheriff's office patrol cars.

Requester

David L. Tedder, Esquire, Attorney for Jasper County.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/january-9-2018-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2018/01/Tedder-D.-OS-10184-FINAL-Opinion-1-9-2018-FAIR-01562476xD2C78.pdf-01565754xD2C78.pdf

Original opinion text

'"^OUTtt
Alan Wilson
Attorney General

January 9, 2018

Mr. David L. Tedder, Esquire
Jasper County Attorney
Post Office Box 420

Ridgeland, SC 29936

Dear Mr. Tedder:

Attorney General Alan Wilson has referred your question dated August 17, 2017 to the Opinions section for a response. The following is this Office's understanding of your question and our opinion based on that understanding. Issue(as quoted from your letter):

"Re: Propriety of using Local Accommodations and Hospitality Taxes towards the acquisition and equipping ofpatrol carsfor the Sheriff's Office.

As background, Jasper County collects both local option taxes. Revenues that were presented to the local ATAX Committeefor allocationforfiscal year 2017-18 were $180,000.00for ATAX, and $335,000.00for the Hospitality Tax. The requestfrom the Sheriffs Department is therefore approximately 5.83 percent of the total local option tax revenues.

It is our understanding that expenditures from these funds is governed by sections 6-1-530 (Accommodations) and 6-1-730 (Hospitality). Counties that collect less than $900,000 in state accommodations taxes annually may use up to 50

percent of the previous year collectionsfor the operation and maintenance oftourism relatedfacilities and purposes, and revenues up to that amount may be used to fund police, fire protection, emergency medical services, and emergency-preparedness operations directly related to tourism related purposes andfacilities.

Jasper Countyfalls into the second category, collecting less than $900,000 in state accommodation taxes. By mathematical calculation, it appears that up to $257,500.00 may be available to fund police, fire protection, emergency medical services, and emergency-preparedness operations directly related to tourism related purposes andfacilities.

Asfurther background, Jasper County is the State's southernmost County, bordering the Georgia border and transected by both US Highway 17 and Interstate 95; there are approximately 38 miles ofinterstate with Exits at mile markers 5, 8, 22, 33 and 38. Besides serving Jasper County and its tourist related

Rem-bert C.Dennis Building • Post Office Box 11549 • Columbia,SC 29211-1549 • Telephone 803-734-3970 • Facsimile 803-253-6283

Mr. David L. Tedder, Esquire
Page 2

January 9, 2018

activities1, these exits and Highway 1 7 provide access to the considerable regional tourism activities of Beaufort County and its municipalities.

My research into this matter led me to the Attorney General Opinion of December 5, 2011, to the Honorable Harvey Peeler, Jr., Senator from Cherokee County, concerning the use of local hospitality tax revenue for the purchase ofa fire truck (2011 WL 6959374). That opinion addressed the specific question of whether afire truck was a "service" that is "directly attendant" to one or more facilities listed in subsection 6-1 -730(B)(1). That opinion pointed out that "directly attendant" is not defined in the relevant

statutes. It observed that it would be expected that the service and or truck (in our case, the patrol cars)

"be present at," "take care of," or "remain ready to serve" a facility listed in Section 6-1 -730(A)2. Subsection (A)(4) includes as a purpose for which the local hospitality fund may be used "highways, roads, streets and bridges providing access to tourist destinations. " The language ofsection 6-5-130 (Local Accommodations Tax) is identical. I also took note of the March 27, 2014 Attorney General Opinion to Senator Peeler which concluded that it was likely a court would conclude the expenditure of the local hospitality tax collected pursuant to

section 6-1-720 would be allowable to maintain and repair roads as long as the roads provide access to tourist destinations (noting that determinations regarding tourist destinations and whether a particular road provides access.

It would seem to follow that patrolling the roads providing access to tourist

destination[s] would fall into the allowance provided for police operations under subsection (b)(1). In accordance with the observation made in footnote 2, the patrol area would include those areas listed in subsection 6-1-730 (4), but would not be limited to those areas. I am also aware of the reported Administrative Law Court case of Florence County v.

Tourism

Expenditure Review Committee. 2004 WL 3154879, in which the use of accommodations taxes collected

pursuant to Chapter 4 of Tile 6 and Chapter 36 of Title 12 were at issue in the allocation without local advisory committee review of a $230,000.00 disbursement to the Florence Sheriff's Department, an amount that was 83. 6 percent of the totalfunds collected under the state accommodations tax. As noted in the 2011 Opinion to Senator Peeler, "...authority concerning "tourism related expenditures" of title 12

accommodations tax revenue is of limited utility because the language of section 6-1-730 varies greatly

from the language ofsection 6-4-10(4), which governs those expenditures. " To be clear, Jasper County is considering only the local option accommodations and hospitality taxes, not the state revenue subject to the special review procedures under Section 6-4-10. Nonetheless, the local advisory committee did

recommend the allocation to the Jasper County Sheriff's Department, which, as noted above, is only 5.8 percent of the total revenue available.

Unincorporated Jasper County hosts multiple annual festivals and events, drawing tourists from outside the County and region, including those events in the municipalities ofHardeeville and Ridgeland, The County also has tens of thousands of acres of large hunting preserves owned and leased by hunters who come to enjoy the local bounty of wildlife available. Further, our Lowcountry region, including Beaufort County with its large tourism related economies of Hilton Head, Port Royal, old Beaufort and the Sea Islands is predominantly accessed through the Interstate and our exits with their conveniences.

2 I also observed this opinion suggested that the service area of afire truck must include, but need not be limited to, a facility listed in Section 6-1 -730(A). Likewise, the service area for the patrol cars would include the roadfacilities

serving these areas, but would not be limited to these areas.

Mr. David L. Tedder, Esquire
Page 3
January 9, 2018

I trust I have provided sufficient information for your consideration of this request for guidance. The amounts and relative percentages of expenditures and revenue has been provided so that if necessary, a perspective of the relatively minor amounts being considered for disbursement to the Sheriff's Department is available ifrequired to reach a conclusion. " Law/Analysis:

As you reference in your letter, this Office issued an opinion in 201 1 where we discussed whether

a fire truck could qualify as the "operation and maintenance" of "police, fire protection, emergency medical services, and emergency-preparedness operations directly attendant to those facilities" pursuant

to the Local Hospitality Tax in § 6-1-730. Op. S.C, Att'v Gen.. 2011 WL 6959374 (S.C.A.G. December 5, 2011) (quoting S.C. Code Ann. § 6-1-730(8)). In the 2011 opinion, this Office concluded that "the service area of a fire truck purchased with local hospitality tax revenue must include, but need not be limited to, a facility listed in section 6-1 -730(A)" because the requirement listed in the statute "directly attendant to those facilities" is not defined in the statute. Id. As you also mention, this Office opined in a 2014 opinion that Local Hospitality Tax funds (collected pursuant to S.C. Code Ann. § 6-1-720) could be used to maintain and repair roads that provide access to tourist destinations without defining what was or was not a tourist destination. Op. S.C. Att'v Gen.. 2014 WL 151 1521 (S.C.A.G. March 27, 2014). Your letter also mentions the Florence County v. Tourism Expenditure Review Committee case where the Administrative Law Court ruled, among other things, that since the Florence County Sheriffs Department did not submit an application to the Tourism

Expenditure Review Committee, the expenditure of State Accommodations Tax funds to the Sheriffs Department did not comply with the law. Florence County v. Tourism Expenditure Review Committee. 2004 WL 3154879 (SCALC June 25, 2004). As you point out in your letter, Florence County refers to

the State's Accommodations Tax, which is found in South Carolina Code Ann. §§ 12-36-920, 6-1-500 et seq.. and 12-36-2630. The Local Accommodations Tax is located in South Carolina Code Ann. § 6-1-500 et seq.

While the Advisory Committee serves to recommend how State Accommodations Tax funds should be spent by local governing bodies, and the Tourism Expenditure Review Committee serves as the oversight authority on any questionable tourism-related expenditures of State Accommodations Tax

funds, this Office wants to clarify a few things regarding Accommodations Taxes. S.C. Code Ann. §§ 64-25, 6-4-35; Op. S.C. Att'v Gen.. 2017 WL 3923120 (S.C.A.G. Aug. 30, 2017).

Quoting from prior

opinions, we stated concerning Revenue Rule 98-22 that:
However, Revenue Ruling #98-22 gives specific instruction for the interpretation

and administration of the Local Accommodations Tax by the South Carolina

Department of Revenue. S.C. Rev. Rul. 98-22, 1998 WL 34058107 (October 27, 1998, eff. December 1, 1998). The statute cited as authority for the ruling (S.C.

Code § 6-4-30) was repealed in 2003.2 2003 S.C. Acts No. 96 § 3.MM (eff. June 18, 2003). It stated: Section 6-4-30. Local governments covered by this chapter may expend accommodations tax revenues pursuant to this chapter, and the Department of Revenue shall: (1) serve as a resource to, answer questions of, and assist advisory committees

and local governments in the implementation of the accommodations tax; and

Mr. David L. Tedder, Esquire
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January 9, 20 1 8

(2)

arrange

continuing

education

programs

or

workshops

for

local

governmental officials and advisory committee members.

2001 S.C. Acts No. 74. Therefore, we will presume the S.C. Department of

Revenue does not have an official opinion regarding your question.

2015 WL 5462169, at *3-4 (S.C.A.G. Sept. 3, 2015) (footnotes omitted).3 This Office also opined that: First and foremost, this Office generally defers the interpretation of administrative questions to administrative agencies within their jurisdiction. See, e.g.. Op. S.C. Att'v Gen.. 2015 WL 836506 (S.C.A.G. February 17, 2015). It is this Office's understanding that, pursuant to South Carolina Code Ann. § 6-4-20(A), the South Carolina Treasurer administers an accommodations tax account. It is also our understanding, as we stated in a prior opinion, that the South Carolina Department of Revenue does not administer and collect a Local Hospitality Tax. Op. S.C. Att'v Gen.. 2015 WL 836506 (S.C.A.G. February 17, 2015). Moreover, the Department

of Revenue reviews sales tax returns for those "engaged or continuing within this State in the business of furnishing accommodations to transients for consideration." S.C. Code Ann. § 12-36-920. Thus, to the extent that the Treasurer

and the Department of Revenue administer and collect the Local Accommodations Tax, we would generally defer to their interpretations of the statutes as long as such interpretations are reasonable. Id. Furthermore, we note that the South Carolina Department of Revenue issued a ruling on October 27, 1998 pertaining to Accommodation Tax funds. See S.C. Revenue Ruling No. 98-22, 1998 WL 34058107 (October 27, 1998). In the ruling the Department advised that the use of Accommodations Tax funds are prohibited as to those activities that provide "a purely local function or benefit" and limited "tourism-related expenditure" to those

activities that are "used to attract or provide for tourists ... [and not] for an item that would normally be provided by the county or municipality." S.C. Revenue Ruling No. 98-22, 1998 WL 34058107 (October 27, 1998). Additionally, the

ruling concluded that Accommodations Tax funds may promote events that affect tourism but may not be used to support local programs that benefit the local

population without tourists benefitting from the programs. Id. The Ruling concluded that tourism funds could not be used to pay for local art and music programs but could be used for cultural and civil activities in addition to visitor centers as long as they were used to attract and provide for tourists without

providing "a purely local function." Id.
2017 WL 3923120, at *2-3 (S.C.A.G. Aug. 30, 2017).

Thus, while we refer to Revenue Ruling 98-22

concerning the State Accommodations Tax, we recognize that S.C. Code Ann. § 6-4-30 has been

repealed. 2003 S.C. Acts No. 96 § 3.MM (eff. June 18, 2003). Nevertheless, we believe a court will find this ruling to be instructive regarding State and Local Accommodations Tax funds, especially regarding the Department of Revenue's interpretation of their allocation.

We encourage you to read Revenue

Ruling No. 98-22, 1998 WL 34058107. Therefore, to clarify this opinion and prior opinions:

3 Nevertheless, we must note that the Revenue Ruling was written regarding the State Accommodations Tax pursuant to S.C. Code Ann. § 6-4-10 et sea., though we find it instructive for Local Accommodations Tax funds, as we clarify below.

Mr. David L. Tedder, Esquire
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January 9, 20 1 8

1)

The S.C. Department of Revenue administers and collects State Accommodations Taxes pursuant

2)

The S.C. Department of Revenue issued a Revenue Ruling on State Accommodations Taxes pursuant to South Carolina Code § 6-4-30 which has since been repealed, though this Office believes a court may find it helpful in the interpretation of Accommodations Taxes (except where the State Accommodations Tax statutes differ from the Local Accommodation Tax statutes since the Ruling was written regarding the State Accommodations Tax). See S.C. Rev. Rul. 98-22, 1998 WL 34058107 (October 27, 1998, eff. December 1, 1998); 2003 S.C. Acts No. 96 § 3.MM

to South Carolina Code § 12-36-920 and Regulation 1 17-307.4

(eff. June 18, 2003).

Thus, before we answer your specific question, let us review the Local Accommodations Tax Act, which states that: (A) The revenue generated by the local accommodations tax must be used exclusively 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, renourishment, or other tourism-related lands and water access; (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. (B)(1) In a county in which at least nine hundred thousand dollars in accommodations taxes is collected annually pursuant to Section 12-36-920, the revenues of the local accommodations tax authorized in this article may also be used for the operation and maintenance of those items provided in (A)(1) through (6) including police, fire protection, emergency medical services, and emergencypreparedness operations directly attendant to those facilities. (2) In a county in which less than nine hundred thousand dollars in accommodations taxes is collected annually pursuant to Section 12-36-920, an amount not to exceed fifty percent of the revenue in the preceding fiscal year of the local accommodations tax authorized pursuant to this article may be used for the additional purposes provided in item (1) of this subsection. S.C. Code Ann. § 6-1-530 (1976 Code, as amended). The Local Hospitality Tax Act states that: (A) The revenue generated by the hospitality tax must be used exclusively 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

4 Please note we recognize that neither explicitly grants authority to the Department of Revenue over the State Accommodations Tax, we believe a court will determine the authority is implicit.

Mr. David L. Tedder, Esquire
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January 9, 20 1 8

(6) water and sewer infrastructure to serve tourism-related demand. (B)(1)

In a county in which at least nine hundred thousand dollars in
accommodations taxes is collected annually pursuant to Section 12-36-920, the revenues of the hospitality tax authorized in this article may be used for the operation and maintenance of those items provided in (A)(1) through (6) including police, fire protection, emergency medical services, and emergency-preparedness operations directly attendant to those facilities. (2) In a county in which less than nine hundred thousand dollars in accommodations taxes is collected annually pursuant to Section 12-36-920, an amount not to exceed fifty percent of the revenue in the preceding fiscal year of the local hospitality tax authorized pursuant to this article may be used for the additional purposes provided in item (1) of this subsection.

S.C. Code Ann. § 6-1-730 (1976 Code, as amended). Your question asks whether you may use Local Hospitality Tax and Local Accommodations Tax revenue to fund "a portion of the costs of additions to the patrol car fleet" which translates, per your letter, to paying for a portion of five new patrol cars. As we stated in the 2014 opinion, what is and is not a tourist destination is really a factual question better answered by a court. Op. S.C. Att'v Gen.. 2014 WL 151 1521 (S.C.A.G. March 27, 2014). Moreover, as we concluded in the 201 1 opinion, "the service area of a fire truck purchased with local hospitality tax revenue must include, but need not be limited to, a facility listed in section 6-1 -730(A)" because the requirement listed in the statute "directly attendant to those facilities" is not defined in the statute. Op. S.C. Att'v Gen.. 201 1 WL 695374 (S.C.A.G. December 5, 201 1). Thus regarding Local Accommodation Taxes (S.C. Code Ann. § 6-1-530) and Local Hospitality Taxes (S.C. Code Ann. § 6-1-730), this Office

believes that a court will determine there must be at minimum an implied nexus between the tax funds spent on the patrol cars and the use of the cars for "operations directly attendant to those facilities" listed

in the statute5, just as we concluded in our 2017 opinion that "we believe it will strengthen your argument for there to be at least an implicit nexus between Accommodations Tax revenues and 'transients' coming and staying in Beaufort in order to fulfill the purposes in S.C. Code Ann. § 6-1-530" and likewise for dining in Beaufort and using Local Hospitality Tax funds. Op. S.C. Att'v Gen.. 2017 WL 3923120, at *8 (S.C.A.G. Aug. 30, 2017). The Local Accommodations Tax statute reads, "...the revenues of the local accommodations tax authorized in this article may also be used for the operation and maintenance of those items provided in (A)(1) through (6) including police, fire protection, emergency medical services, and emergency-preparedness operations directly attendant to those facilities." S.C. Code Ann. § 6-1-530 (emphasis added). This part of the statute is identical for Local Hospitality Taxes. S.C. Code Ann. § 6-1

730. Thus, as long as the county is in compliance with the applicable statutes and show a sufficient nexus
     between the law enforcement service "directly attendant to those facilities" and the tourist destination, we believe that a court will determine that you may use the funds accordingly.

Nevertheless, South Carolina
Accommodations Taxes, states that:

Revenue

Ruling

No.

98-22,

while

concerning

State

Additionally, if a county or municipality wishes to use Tourism-related Funds to provide additional county or municipal services, including, but not limited to, law

5 Though "need not be limited to" as quoted from the 2011 opinion. Op. S.C. Att'v Gen.. 2011 WL 695374 (S.C.A.G. December 5, 201 1).

Mr. David L. Tedder, Esquire
Page 7
January 9, 2018

enforcement, traffic control, public facilities and highway and street maintenance, the expenditure must also meet the following three requirements: (a) the expenditure must be for items that would normally not be provided by the county (i.e., if the item would be required even if the county or municipality had no tourist activity, then Tourism-related Funds may not be used to pay for the expenditure); (b) the county or municipality must have a high concentration of tourism activity; and (c) the amount of the expenditure must be based on the estimated percentage of costs attributable to tourists. Counties and municipalities that do not have a high concentration of tourism activity, may not use Tourism-related Funds to fund additional county or municipal services. S.C. Rev. Rul. 98-22, 1998 WL 34058107 (October 27, 1998, eff. December 1, 1998) (emphasis added). This conclusion is directly contrary to the statutes regarding the use of Local Accommodations Tax funds

and Local Hospitality Tax funds.

S.C. Code Ann. § 6-1-530 (emphasis added) ("...the revenues of the

local accommodations tax authorized in this article may also be used for the operation and maintenance of those items provided in (A)(1) through (6) including police, fire protection, emergency medical services, and emergency-preparedness operations directly attendant to those facilities"); S.C. Code Ann. § 6-1-730 (emphasis added) ("the revenues of the hospitality tax authorized in this article may be used for the operation and maintenance of those items provided in (A)(1) through (6) including police, fire protection, emergency

medical

services,

and

emergency-preparedness operations

directly

attendant to those

facilities").
Conclusion:

This Office believes a court will find that as long as you are in compliance with the applicable

statutes and show a sufficient nexus between the law enforcement service "directly attendant to those facilities" and the tourist destination, noting that the attendance does not have to be exclusive, we believe that a court will determine that the county may use Local Accommodations Tax funds and Local Hospitality Tax funds for law enforcement services such as patrol cars. As you mention in your letter, whether the county qualifies for the use of fifty percent (50%) or the full amount of Local Accommodations Tax funds and Local Hospitality Tax funds regarding "police, fire protection, emergency medical services and emergency-preparedness operations directly attendant to those facilities"

depends on the amount of Accommodations and Hospitality Tax revenue collected. S.C. Code Ann. §§ 61-530(B); 6-l-7730(B).

Moreover, where the South Carolina Department of Revenue Ruling No. 98-22

(1998 WL 34058107 (October 27, 1998, eff. December 1, 1998)) regarding State Accommodations Taxes (S.C. Code Ann. §§ 6-4-10 et seq.. 12-36-920, 12-36-2630) directly contradicts the statutes regarding the use of the Local Accommodations Tax funds (S.C. Code Ann. § 6-1-530 et seq.J and Local Hospitality Tax funds (S.C. Code Ann. § 6-1-730 et seq. J. this Office believes a court will determine it is neither binding, nor should it be followed for the allocation of Local Accommodations Tax funds and Local Hospitality Tax funds.

However, this Office is only issuing a legal opinion based on the current law at

this time and the information as provided to us.
pending litigation or criminal proceeding.

This opinion is not an attempt to comment on any

Until a court or the General Assembly specifically addresses

the issues presented in your letter, this is only an opinion on how this Office believes a court would

Mr. David L. Tedder, Esquire
Page 8
January 9, 201 8

interpret the law in the matter. This opinion only addresses some of the sources in the subject area, but we can address other authority or additional questions in a follow-up opinion. Additionally, you may also

petition the court for a declaratory judgment, as only a court of law can interpret statutes and make such determinations. See S.C. Code § 15-53-20.

If it is later determined otherwise, or if you have any

additional questions or issues, please let us know.

Sincerely,
J

Jcua,

Anita (Mardi) S. Fair

Assistant Attorney General
REVIEWED AND APPROVED BY:

Robert D. Cook

Solicitor General