In a recent government meeting, significant discussions emerged regarding the legality of using nonprofit chambers as Destination Marketing Organizations (DMOs) in South Carolina. A key point raised was the interpretation of IRS 501(c)(6) tax codes, which prohibit the taxation of nonprofit chambers for this purpose. It was asserted that the current South Carolina tax codes are improperly drafted and must align with federal regulations, emphasizing that only for-profit entities should be eligible to serve as DMOs.

The meeting highlighted that any advertising and promotional funds allocated for tourism must be managed by either one or two selected for-profit DMOs, which must demonstrate an existing tourism promotion program or the capability to develop one. If no suitable for-profit bidders are available, municipalities or counties are advised to manage DMOs in-house, utilizing existing staff or hiring external agencies through a procurement process.

Concerns were raised about a $40 million contract with a nonprofit chamber, which participants argued should be canceled immediately due to its illegality. The discussion also touched on the evolving landscape of tourism marketing, noting that technology and social media have significantly reduced the need for traditional DMO models. The speaker emphasized the importance of proven performance metrics for any DMO and suggested that advancements in artificial intelligence could enhance future operations.

Additionally, the speaker announced a personal initiative to donate websites related to Hilton Head Island to the new DMO, reinforcing a commitment to improving local tourism marketing efforts. The meeting underscored the necessity for transparency and compliance with tax regulations in the management of tourism promotion funds.