Why did South Carolina Revenue Ruling 18-16 withdraw the Department's earlier guidance on spending 2% local accommodations-tax funds?

Plain-English summary

South Carolina Revenue Ruling 18-16 formally withdrew Revenue Ruling 98-22, the Department of Revenue's earlier guidance on how revenue from the 2% local accommodations tax could be used and handled.

The withdrawal was about authority, not a stated rejection of every conclusion in the old ruling. The General Assembly had once authorized the Department under Section 6-4-30 to serve as a resource for questions about these funds. That provision was repealed in 2003, so the Department no longer had that assigned role and withdrew its ruling.

The Tourism Expenditure Review Committee is the oversight authority for questionable tourism-related expenditures under Section 6-4-35 and became the resource for questions and information about use of the revenue. RR 18-16 says the Committee had indicated it would continue following the analysis and guidelines in RR 98-22 unless a statute, court decision, or later Committee guidance superseded or modified them.

What this means for you

Counties, municipalities, and tourism organizations

Direct questions about permissible uses of 2% local accommodations-tax revenue to the Tourism Expenditure Review Committee, not to RR 98-22 as an active Department revenue ruling. Check the Committee's current guidance and any later law before approving an expenditure.

Accountants and public officials

Do not read the word "withdrawn" as a finding that the old analysis was substantively wrong. RR 18-16 explains that the Department withdrew it because its statutory resource role had been repealed, while the Committee intended to keep using the old analysis unless later authority changed it.

Common questions

Q: What did RR 18-16 withdraw?
A: SC Revenue Ruling #98-22 concerning use of accommodations-tax funds.

Q: Why was it withdrawn?
A: Because Section 6-4-30, which had authorized the Department to answer questions about use and handling of the 2% local accommodations-tax revenue, was repealed in 2003.

Q: Who handles these questions now?
A: The Tourism Expenditure Review Committee, which the ruling identifies as the resource for questions and information and as the oversight authority for questionable tourism-related expenditures.

Q: Did the Committee discard every guideline in RR 98-22?
A: No. RR 18-16 says the Committee indicated it would continue following that analysis and guidance unless later statute, court decision, or Committee guidance changed it.

Citations and references

• S.C. Code Ann. Title 6, Chapter 4 (use and handling of 2% local accommodations-tax revenue)
• S.C. Code Ann. Section 6-4-35 (Tourism Expenditure Review Committee oversight)
• S.C. Code Ann. Section 12-36-2630(3) (2% local accommodations tax)
• Former S.C. Code Ann. Section 6-4-30 (repealed statutory resource role described in the ruling)
• SC Revenue Ruling #98-22 (withdrawn by RR #18-16)

Subject

Use of the 2% Local Accommodations Tax Funds Withdrawal of SC Revenue Ruling #98-22

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR18-16.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 12265, Columbia, South Carolina 29211

SC REVENUE RULING #18-16

SUBJECT:

Use of the 2% Local Accommodations Tax Funds
Withdrawal of SC Revenue Ruling #98-22
(Sales Tax)

DATE:

October 17, 2018

REFERENCES:

Title 6, Chapter 4 (2004, Supp. 2016)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2014)
S.C. Code Ann. Section 1-23-10(4) (2005)
SC Revenue Procedure #09-3

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public. It
is an advisory opinion issued to apply principles of tax law to a set of facts
or general category of taxpayers. It is the Department’s position until
superseded or modified by a change in statute, regulation, court decision,
or another Department advisory opinion.

Chapter 4 of Title 6 of the South Carolina Code of Laws provides a procedure for the use and
handling of revenue from the 2% local accommodations tax provided in Code Section 12-362630(3). It also establishes a Tourism Expenditure Review Committee to “serve as the oversight
authority on all questionable tourism-related expenditures” (Code Section 6-4-35).
At one time, the General Assembly, under Code Section 6-4-30, authorized the Department of
Revenue to serve as a resource in answering questions concerning the use and handling of the
revenue from the 2% local accommodations tax provided in Code Section 12-36-2630(3). As a
result, the Department published SC Revenue Ruling #98-22.
The provisions of Code Section 6-4-30 were subsequently repealed in 2003. As a result of the
repeal of this code section, SC Revenue Ruling #98-22 concerning the “Use of Accommodations
Tax Funds” has been withdrawn.

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Note: The Tourism Expenditure Review Committee now serves as the resource for questions and
information with respect to the use of revenue from the 2% local accommodations tax. The
Committee has indicated that it will continue to follow the analysis and guidelines outlined in SC
Revenue Ruling #98-22, unless such analysis or guidance has been superseded or modified by a
change in statute, court decision, or other guidance published by the committee.

SOUTH CAROLINA DEPARTMENT OF REVENUE

s/W. Hartley Powell
W. Hartley Powell, Director
October 17
, 2018
Columbia, South Carolina

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