MB sunrise

The sun rises on Myrtle Beach. Photo by Janet Morgan/janet.morgan@myhorrynews.com

In another about-face, Horry County officials plan to continue collecting a hospitality fee in local cities.

Despite some leaders saying earlier in the week they misinterpreted a judge’s ruling about where the fee could be collected, county council members took no action following an executive session Saturday afternoon, when a special meeting was held.

The lack of a vote means the county will collect the controversial 1.5 percent hospitality fee in all cities except Myrtle Beach.

On Tuesday, county officials announced plans to do just that. Two days later, some leaders said they misconstrued the ruling and considered limiting the fee to the unincorporated areas.

Chairman Johnny Gardner said county officials believe the judge's ruling only applies to Myrtle Beach. He added North Myrtle Beach and Surfside Beach are not listed as plaintiffs in the lawsuit. 

“We got the legal advice from our lawyers in our executive session,” he said. “Based on that, we are staying the course and moving forward.”

Councilman Johnny Vaught said an attorney representing the county told council members that a vote to stop collection of the fee in all cities would be detrimental to the county's case. He maintains the county is not defying the judge’s ruling.

Surfside Beach Mayor Bob Childs said he was surprised there was no vote Saturday to halt the county from collecting the fee in cities other than Myrtle Beach. 

“I didn’t think there was any other way to interpret the judge’s ruling,” he said. “We’ll talk with our lawyer first thing Monday morning.”

In an email, North Myrtle Beach spokesman Pat Dowling said the municipality Friday mailed a letter to businesses in the city limits that states, “Horry County is not authorized to collect any portion of these taxes within the City of North Myrtle Beach."

Horry County Treasurer Angie Jones has said she received calls from multiple municipal officials who insisted the judge’s recent ruling meant that the county could not collect the fee in any local cities, not just Myrtle Beach, until the lawsuit between the county and the cities is resolved.

Jones previously said she agrees with the cities' interpretation of the judge's order. She was concerned her office could be forced to issue refunds if the court determined the fee collection inside city limits shouldn’t have taken place. 

At issue is the 1.5 percent hospitality fee that is charged on all prepared food, hotel admissions and attraction tickets sold countywide. For more than 20 years, the county has collected this fee. The revenues were used to pay for major road projects, including S.C. 31 and S.C. 22. Once the debt for the highways was paid off, county officials planned to use some of the tax revenues to pay for building I-73. They also expected to use a portion for improving public safety services in unincorporated Horry.

But earlier this year, Myrtle Beach leaders opted to overhaul the hospitality fee structure and install their own tax and fee system. They said they didn’t want to share these revenues with the county. North Myrtle Beach and Surfside Beach officials did the same thing.

The new tax structure is scheduled to take effect July 1. 

In March, Myrtle Beach sued the county, saying in court papers that the county was illegally collecting the hospitality fee because that program was supposed to expire in 2017. The lawsuit didn’t name Surfside Beach or North Myrtle Beach, but it said the case was for “itself and a class of similarly situated plaintiffs.” 

"[That] clearly includes municipalities in Horry County," North Myrtle Beach officials said in a prepared statement Tuesday. 

Earlier this year, Myrtle Beach officials asked a judge to issue a temporary injunction barring the county from collecting the hospitality fee in the city while the lawsuit went through the court system. The judge sided with the city and issued his ruling last week.

But on Tuesday, the county filed a motion asking the court to reconsider the decision. The county also issued a news release saying it planned to continue collecting the fee everywhere except the city of Myrtle Beach.

The lawsuit remains pending.

Check back for updates.

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