A History Of The Local Option Sales Tax From The Pages Of The Dillon Herald

By Betsy Finklea
The Local Option Sales Tax (L.O.S.T) is back in the forefront almost 22 years after it was passed by the voters of Dillon County on November 7, 1995.
The issue is back on the front-burner because last Friday in the second reading of their budget. In this version, the Dillon County Schools will no longr receive funds from the tax that has been going to them since the tax started being collected in 1996. These funds would become a part of Dillon County’s budget.
The Herald researched the history of the Local Option Sales Tax in Dillon County, and this is what we found in the archives of The Dillon Herald.
The first mention found of a Local Option Sales Tax in Dillon County is in 1990. According to an article which appeared in the October 30, 1990 issue of The Dillon Herald, citizens in all 46 counties in South Carolina would have a chance to vote on whether they wanted to “substitute a local sales tax for a portion of the local property taxes.” It would add one percent to the local sales tax in the county. According to a second article in the October 30, 1990 issue written by R.E. Robinson, Jr., if the Local Option Sales Tax was approved, an estimated $1,260,000 would “be returned the first year to roll back Dillon County property taxes.” “Each of the three municipalities in Dillon County [would] also receive a kickback, 63 percent which [would] be used to roll back municipal ad valorem taxes, the remaining 37 percent may be spent for general operations and high priority expenses.” At least one major employer in Dillon County, South of the Border, openly opposed the local option sales tax measure as evidence in an ad that appeared in an the October 30, 1990 issue. An editorial that appeared in the November 1, 1990 issue called on the voters of Dillon County to “Nix the Local Option Sales Tax.” On November 6, 1990, the voters did just that and voted down the Local Option Sales Tax by 946 votes with 3,440 voting against the tax and 2,494 voting in favor.
In 1995, the county decided to try the Local Option Sales Tax again-this time with 50 percent of their share going to the Dillon County Board of Education.
In an article by R.E. Robinson, Jr., which appeared in the September 7, 1995 issue, “71 percent of the proceeds will be used to roll back county property taxes. The balance of 29 percent would be distributed to the county and municipalities.”
The article clearly states that the Dillon County Council voted to divide the county’s portion with the Dillon County Schools. The article states: “Dillon County will split the share (an estimated $418,000) it would receive from the sales tax bonanza from property in the unincorporated areas with the Dillon County Board of Education. Each entity would receive an estimated $209,000 annually.”
“In agreeing to place the one-cent sales tax increase on the ballot, County Council agreed to use its share of the county portion only for capital improvements such as building or repairing the jail, renovating the courthouse, or school buildings…”
“Council went on record that its share would not be used for growth of government or for administrative costs.”
“The motion to divide the County’s portion of the rollback with the Dillon County schools was made by Councilman Chester Taylor and received a second from Councilman James Webster. It carried with six votes. Councilman Clarence McRae was not present.”
An ad which appeared in some issues prior to the public’s vote stated the facts about the Local Option Sales Tax. The facts, according to the ad, are:
“Fact: In S.C. all taxes are governed by law.”
“Fact: Of all the counties in S.C., only Florence and Horry County are less than Dillon County ordinary and school tax.”
“Fact: Forty-three other counties are higher than Dillon County.”
“Fact: If passed, 71% of the funds collected by the State will be given back in property tax reductions and shown as such right on your tax bill.”
“Fact: 71% is a 1.6 million dollar reduction in Dillon County property tax.”
“Fact: As a receiving county, Dillon County will receive in the distribution $235,000 collected in larger counties.”
“Fact: A jail must be built with or without the passage of the Local Option Sales Tax.”
“Fact: A new jail without the Local Option Sales Tax will increase the County mills about 10 mills (about 15%).”
“Fact: The County part of the distribution will be divided equally between the County and the County School Board with all proceeds being used for building replacement or repair only.”
“Fact: The County and schools will use the funds for buildings only and not for administration or the growth of government!”
“Fact: All of our surrounding/neighboring counties already have the Local Option Sales Tax.”
“Fact: If you are spending any of your money in any of the surrounding counties, you are already paying the 1-cent.”
The ad asks: “Has the time arrived for the Local Option Sales Tax?”
At the bottom of the ad, a notice to taxpayers appears showing the anticipated credit along with a sample ballot stating the referendum question.
On November 7, 1995, the Local Option Sales Tax was approved with a 3-1 margin with 928 votes in favor of the tax and 303 votes against it.
The tax became effective on May 1, 1996.