As lawmakers in Columbia scrambled Wednesday to lighten the property tax burden on South Carolina homeowners, the state's tourism industry worried that politicians would drive down business by shifting some of the financial load onto tourists.

The House approved legislation late Wednesday that would add 2 cents to the current state sales tax of 5 cents on the dollar to compensate for reduced property tax collections.

South Carolina business groups, including the state Chamber of Commerce, have criticized these plans for weighing on businesses without offering tax breaks to commercial property owners in return.

Under most of the new tax schemes, hotels, restaurants and rental car companies would pay the same government fees on their bricks and mortar, while their product - one of the state's biggest money-makers - would become more expensive. Hospitality promoters said visits to the state would suffer if that happens. Those who sell South Carolina venues to meeting planners are particularly concerned.

"We could shoot ourselves in the foot here," said Ed Riggs, director of sales at the Charleston Area Convention Center Complex. "Meeting plannners will look at it and say, 'Well, I can save $10,000 if I go to this other city.'?"

Guests in Charleston County hotels currently pay a total rate of 12.5 percent in local and state taxes - already more than guests pay in a lot of competing cities, including Myrtle Beach and Orlando, Fla. If Charleston hotel fees jumped to 14.5percent, its visitors would be taxed at a higher rate than in many big-city convention hubs, such as Atlanta and San Francisco.

In the most recent fiscal year, the state collected $36.8 million from the 2 percent accommodations tax; 22 percent of that money came from lodgings in the Charleston metro area. Counties and municipalities also reaped windfalls with their own hotel taxes, but industry observers note there is a point of diminishing returns.

For example, New York City hotels started losing business in 1990 when their taxes hit 19.25 percent. After watching big conventions settle in other cities for four years, New York politicians ticked rates down to 13.25 percent.

Tom Sponseller, executive director of the Hospitality Association of South Carolina, said he is concerned about what higher sales taxes might mean for both hotels and restaurants. He is meeting with association members this week to establish a stance on the different proposals.

"If you add 2 percent to the whole bill ... you will literally chase business someplace else," he said.

The leading proposal in the Statehouse, a bill sponsored by House Speaker Bobby Harrell, R-Charleston, would exempt accommodations from the proposed 2-cent increase.

In an interview with The Post and Courier on Tuesday, Gov. Mark Sanford said he would look closely at how the tourism industry would be affected by any property tax reform bill that makes it to his desk. In his State of the State address, he urged lawmakers to consider cutting unnecessary exemptions and make sure property tax proposals don't cloud the business climate.

"I think most (convention and visitors bureaus) have said they are concerned about this, and that's one of the reasons why we're trying to broaden the debate," Sanford said. "I think we're still at the front end of the sausage-making process here."

Reach Kyle Stock at 937-5763 or kstock@postandcourier.com.