South Carolina Lawmakers Weighed Tourism Tax Changes
Hospitality operators should watch for potential shifts in how Myrtle Beach and other tourism-heavy hubs fund long-term infrastructure.
Updated on Oct. 6, 2026 in Hospitality
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South Carolina officials have explored expanding authority for a 1 percent tourism development fee to counties like Horry and Charleston. This shift aims to update a 2009-era law that currently limits the tax to Myrtle Beach while complicating the bonding of large-scale construction projects.
Why it matters
The proposal addresses a bottleneck where the current 10-year re-approval cycle makes it difficult for municipalities to finance long-term infrastructure. By extending the window and allowing cities to retain a higher share of revenue, the state aims to pivot funds from marketing toward capital projects.
The 1 percent sales tax generated $45.5 million last year, with officials now proposing to double the tax's re-approval window to 20 years. Local leaders also seek to shift the revenue split to retain 40 percent of funds for construction, up from the current 20 percent.
The players
Bill Herberksman
A South Carolina State Representative leading legislative efforts to modify state tourism tax distribution laws.
Myrtle Beach
A major South Carolina tourism hub and the only municipality currently authorized to utilize the state's tourism development fee.
Horry County
The administrative region currently exploring the expansion of tourism tax authority alongside municipal leaders.
The details
Under current law established in 2009, the tax is restricted to municipalities within counties generating over $14 million in accommodations taxes, with Myrtle Beach being the sole user. The proposed legislative revisions would allow for a 20-year approval cycle, providing the financial stability required for municipal bonding of construction projects. Myrtle Beach officials are currently coordinating with the Horry County legislative delegation and Lowcountry peers to present a finalized plan to state lawmakers.
Timeline
2009: The tourism development fee was originally created.
January 2026: Representative Herberksman introduced TDF legislation.
September 15, 2026: City officials met with the Horry County legislative delegation.
October 2026: City and chamber officials expect to finalize tax plans.
Market Landscape
The proposed legislative update marks a departure from the 2009 South Carolina Tourism Development Fee Act by extending the tax's re-approval window to support long-term capital construction. This follows a broader trend where municipalities are seeking to move away from strictly marketing-focused tourism funding toward direct infrastructure reinvestment.
Operators in the tourism sector should monitor the shift from marketing-heavy funding to construction-based projects, as this may alter future local capital investment plans. If passed, the expanded authorization could create new infrastructure development opportunities in jurisdictions currently barred from using this fee.
The takeaway
The move to extend tax approval windows from 10 to 20 years represents a critical shift toward enabling long-term debt financing for municipal tourism projects. Business owners should track these legislative discussions, as they signal a change in the priority of local tourism tax spending from advertising to physical infrastructure.
What happens next
City and chamber officials are expected to finalize their formal tax proposal by mid-October 2026 for submission to the state legislature.
Further reading
For more on industry-specific tax trends, see our coverage of Hospitality.
Source note: This article includes information reported by Post and Courier.
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