Option To Renew The Penny Sales Tax

The Sales Tax Act became law on June 12, 2008, to provide an additional option for funding capital projects of South Carolina school districts with certain restrictions. The Sales Tax Act authorizes the school district and other qualifying South Carolina school districts to impose the sales tax if approved by the voters. The 1% sales tax has been imposed in several other qualifying South Carolina school districts.

South Carolina's Constitution authorizes school districts to issue bonds to fund capital projects (construction of new schools and improvements to existing schools) but limits those bonds to 8% of the total assessed property values within the school district. The debt service on these bonds is paid from property taxes. In 2008, Horry County Schools’ debt service millage was 28 mills. Today it is 10 mills.

The current amount of the sales tax will not change.

The 1% sales tax would be effective for 15 years (until 2039) to cover the school district's identified capital needs. Those needs include additions and renovations to existing facilities, construction of new facilities, land acquisition, technology, safety & security, and telecommunications.

• It would be used to fund capital needs as specifically identified in the referendum ballot question approved by the voters.
• Revenue from the 1% sales tax would support the construction of new facilities and renovations to existing schools. It also would address the facility needs of Coastal Carolina University and Horry-Georgetown Technical College.
• Revenue from the sales tax cannot be used to fund the general operations of Horry County Schools, Coastal Carolina University or Horry-Georgetown Technical College for items such as salaries, instructional materials, supplies, or other day-to-day costs.

No. Additional personnel or other operating costs can only be funded with additional state funding or additional operating millage. The 1% sales tax can only be used for capital projects.

Based on historical collections, the penny sales tax is expected to generate more than $1.9 billion dollars ($1,938,448,129) over a 15-year period. This number assumes a four percent annual increase in sales tax collections. Horry County Schools will receive 80 percent, or $1,550,758,503. Coastal Carolina University will receive 13.3 percent while Horry-Georgetown Technical College will receive 6.7 percent of the total.

The combination of the revenue raised by the 1% sales tax, the increase in the value of a mill, the issuance of bonds, and the retirement of existing debt will provide what will be needed to pay for Referendum projects. The projections for the revenue from the 1% sales tax have been based on extremely conservative assumptions.

A typical family in Horry County pays an additional $99 a year in sales taxes. This amount is based on IRS sales tax tables for a typical household with the county's median annual income of $51,570.

• Last year, the 1% sales tax generated over $93 million for the school district. To generate that same revenue, debt service millage would have to be raised by an additional 36 mills.  Each mill of taxes is $4 per $100,000 of assessed value for all owner-occupied property and $6 for every $100,000 of assessed value of business property (excluding manufacturing), second homes, and vehicles.
• At this time, the school district cannot predict what the increase in debt service millage will be but, without access to the 1% sales tax revenues, the school district will need to fund capital projects using general obligation bonds which will require an increase in the millage levied for debt service.
• Capital needs of the school district, including projects related to growth, maintenance and renovation of existing facilities, will have to be prioritized and some projects could be delayed if the 1% sales tax is not reimposed.

Yes. Property taxes are assessed based on the value of the property you own, while sales taxes are generated from the purchase of goods and certain services. The renewal of the 1% sales tax will allow non-property owners, as well as those traveling to the county who shop or make purchases, to help share the burden of funding local school projects and construction costs.

• Some purchases would be exempt from the sales tax, meaning that the sales tax would not be collected. Unprepared foods are exempt from the sales tax. The sales tax would not be collected on food intended to be eaten at home, including snacks, beverages, cold items such as salads and sandwiches, and seeds or plants intended to grow food.
• Some items would not be exempt. The sales tax would apply and be collected on purchases like paper products, soap, pet food, alcoholic beverages, ready-to-drink beverages, ready-to-eat hot foods, foods designed to be heated in stores, prepared hot or cold foods to be eaten in or near stores, vitamins, and certain medicines (any medication exempt from state sales and use taxes would also be exempt from the local sales tax).
• There are other items that would be exempt (not sales taxed). If interested, please see Sections 12-36-2110, 12-36-2120, and 12-36-2130 of the Code of Laws of South Carolina 1976, as amended.

• Pursuant to the Sales Tax Act, the revenue generated from the 1% sales tax can only be used for the purposes set forth in the referendum ballot question.
• All revenue generated from the 1% sales tax will be deposited in a fund separate from all other funds of the school district.  All expenditures of those funds for new construction and improvements to existing schools will be monitored and accounted for.
• External auditors perform annual audits on the school district’s financial statements and will include an audit of the sales tax fund.
• A copy of Horry County Schools' Annual Comprehensive Financial Report (ACFR) is posted on the school district's website (https://www.horrycountyschools.net) upon completion of each annual audit. In addition, quarterly capital expenditure reports are posted on the school district's website.