The collection of accommodations taxes, generally paid by nonresident visitors, has become a well-accepted means of raising tax revenues in tourism communities. This article looks at small communities and counties across the State of South Carolina to determine categories of use that may provide local governments their best return on their expenditure of these funds. The findings, decidedly exploratory in nature, suggest that the use of accommodation tax funds for the promotion of the arts, cultural events, and other tourism-related events is a successful strategy, enabling tourism growth (as measured by growth in the accommodations sector) while hopefully fueling a virtuous cycle that yields still greater tourism dollars for the community.

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This article investigates local governments’ spending of accommodations tax revenues in the state of South Carolina. Although these revenues are partially earmarked for tourism promotion, results show that local governments engage in illegal fiscal substitution. This fiscal substitution can be explained by the local government's financial flexibility and the proportion of accommodations taxes relative to its overall budget.

This paper examines the process by which firms are selected for a sales tax audit and the determinants of subsequent firm compliance behavior, focusing upon the Gross Receipts Tax in New Mexico. A two-stage selection model is used to estimate the State's audit selection rule and, conditional upon audit selection, the firm's compliance choice. The first-stage estimation results indicate that auditors select returns based upon a systematic, even if informal, audit rule. The second-stage results show that firms that exhibit greater variation in deductions, provide services, miss filing deadlines, and have an out-of-state mailing address have a lower compliance rate.