Beaufort County considers local ATAX distribution policy, proposes advisory committee

Beaufort County staff presented a draft local accommodations and hospitality tax (A&H/ATAX) distribution policy at a Finance Committee workshop, proposing a committee-driven grant process and eligibility criteria intended to align spending with where county ATAX revenues are generated.

The policy draft would prioritize funding projects in unincorporated Beaufort County (a 75% goal) while reserving approximately 25% of county-promoted funds for incorporated municipalities (City of Beaufort, Bluffton, Port Royal, Hilton Head Island, Yamasee) that sponsor projects benefiting county tourism. Chair and council members said the draft should explicitly use the term "unincorporated Beaufort County" so residents understand which areas generate county-collected ATAX.

Why it matters: The policy determines which organizations and events are eligible for locally generated A&H revenue and how the county awards grants. Council asked staff to define "tourist" in the policy: a council member said, and staff agreed to include, a 50-mile rule to distinguish nonresidents from local 'staycation' visitors. "A tourist is considered somebody who lives 50 miles or farther away," the chair said.

Gated communities and public-access constraints were a key topic. Members raised that gated private developments (Fripp Island, parts of Hilton Head) can generate substantial ATAX revenue but may lack public access required for many eligible projects. Staff and councilors discussed options such as funding nonprofit-hosted public events or regional facilities that provide access to gated-community residents while complying with public-access rules.

Advisory committee and application process: Robinson proposed creating an A&H advisory committee modeled on the state ATAX committee to evaluate applications, recommend awards and improve transparency. Staff suggested committee membership include a Finance Committee council member, a Finance Department staffer, a state ATAX committee representative (or advisor), an executive designee and at least one public member; councilors recommended expanding membership to seven to avoid quorum issues and to ensure geographic balance. Staff also proposed applicant training and an application window (applications open early January, deadline end of May) and acknowledged the first year may require flexibility so recurring festivals and one-off events can adapt.

Accountability: The draft includes reporting and reimbursement rules: grantees must submit quarterly progress reports, final reports and proof of expenditure for each drawdown; "Funds will not be provided upfront nor without proper documentation," Robinson said. Grantees must acknowledge county funding in materials and follow compliance and reporting expectations.

Next steps: Staff will refine the policy language (including the 50-mile tourist definition and member appointment process), research potential dual-office conflicts for state committee members serving locally, and return a revised draft for Finance Committee consideration. The draft will accompany ordinance and budget items scheduled for future council readings and budget actions.