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North Myrtle Beach City Hall. Chloe Johnson / Staff

NORTH MYRTLE BEACH — City Council greenlit a referendum on a new sales tax Monday night, setting the stage for a three-month campaign on a fee that could funnel millions of dollars to the local chamber of commerce for advertising. 

On March 6, 2018, North Myrtle Beach residents will vote on whether they want a Tourism Development Fee, a 1 percent sales tax meant for destination promotion that has only been enacted in one other city: Myrtle Beach. Eighty percent of the tax's revenues is used for out-of-area marketing, and up to 20 percent is used as a property tax credit for year-round residents. 

Discussion of the potential tax has been ongoing between the city, the North Myrtle Beach Chamber of Commerce and residents since early 2016. Councilman Bob Cavanaugh was absent, but all other members of the panel approved the referendum.

"We’ve been dealing with this for the past, almost two years now, and it’s time for us to put this to bed," Councilwoman Nikki Fontana said.

Chamber officials asked the council to hold workshops on the wording of the referendum, and said they supported the issue going to a public vote.

“We anticipate over the next 90 days, if this resolution is passed, a great deal of work will have to be done to educate our voters," said Kenneth Moss, an attorney representing the chamber.

The tax has proved controversial at times in Myrtle Beach, where some political candidates said this fall that some of the money that goes to the Myrtle Beach Area Chamber of Commerce — almost $22 million in total last year — should be used for an expanded police force. But discussing a change to the formula of the tax can prove politically difficult, because some residents are wary that such a negotiation could affect the property tax subsidies they receive.

Tax rebates in Myrtle Beach can amount to hundreds of dollars per household. In North Myrtle Beach, which is considerably smaller and would therefore raise less revenue, city staff said taxes on a $250,000 house would be reduced $51 a year. 

The tax does not have to be passed by referendum, however. Myrtle Beach council members implemented its TDF by a supermajority in 2009. 

North Myrtle Beach City Council declined a request last year from that city's chamber to pass it in the same manner.

Officials were worried about bypassing residents and passing a tax as people around Horry County campaigned for the RIDE III initiative. That sales tax, to fund road projects, was approved by voters in November 2016.

Reach Chloe Johnson at 843-735-9985. Follow her on Twitter @_ChloeAJ.