Before social distancing, Ron Geris would see 50-60 customers wander through his AutoWorld car lot on S.C. 90 each day.
Now he gets three to five. His service department is in the same situation. A steady, daily stream of 30-40 vehicles had dwindled to six cars on Thursday.
The sudden slowdown forced Geris to reduce his staff to one-third of what it normally would be. He also recently received more unwelcome news — his business license fee increased.
“Just add one other nail as I’m trying to cut expenses,” he said. “To have a business license [fee hike], it’s like, ‘Man, you guys are kidding me.’”
As Horry County business owners find themselves grappling with the economic woes of the coronavirus crisis, many are also learning their business license will be more expensive, and the fees are due in just a few weeks.
Last summer, Horry County Council raised those fees to avoid a more severe tax hike. They were projecting shortfalls in their recreation and waste management programs. Since they had already planned a tax hike to improve public safety services, they assumed raising the business license fees — which are historically lower than the area’s cities — would be more palatable than closing recreation centers or making steeper tax increases. The fee hikes were projected to generate an additional $4 million for the county.
But council members never envisioned the country’s economy being strangled by a global pandemic. And because business license renewal payments are due May 1, the timing is brutal. Some business owners also didn’t realize how much their fees had jumped.
“It was substantially shocking,” said Jasmine Gale-Bazinet, whose family runs Myrtle Beach Chrysler Jeep and Myrtle Beach Kia.
When Gale-Bazinet went over the revenues for the two dealerships at the end of 2019, everything looked normal. As a controller, she’s paid county business license fees for more than a decade. She said the county rates have always been consistent and affordable.
But when another dealer pointed out what county council did last year, Gale-Bazinet crunched the new rates — for her Chrysler Jeep store, they were nearly nine times what she paid the previous year. As someone who budgets carefully, she was suddenly looking at tens of thousands of dollars in unplanned expenses.
“We are selling high ticket items and it’s based off the sale,” she said, referring to the way the rates are calculated. “If I was selling hot dogs, it would be completely different, but I sell high dollar items and it’s the second most expensive thing that people buy. They buy a home and they buy a vehicle.”
A company needs a county license to do business in unincorporated Horry. Under the system approved last year, high-grossing businesses like car dealerships pay the steepest fees. For example, a car dealership that generated $100 million in revenues in 2018 paid a business license fee of $4,750 in 2019. This year, that fee jumped to $53,038.
Gale-Bazinet said some locals dealers have recently been in talks with Horry County Council members Johnny Vaught and Cam Crawford about changing the fees. While she’s thankful the topic is being considered and some leaders have acknowledged the rates are a problem, the uncertainty is difficult, particularly in the midst of the coronavirus slowdown.
“We understand an increase,” she said. “That was just a really incredibly large punch in the gut increase for it to not have been well communicated.”
Although the new rates hit car dealers particularly hard, other small businesses also felt the hike.
Jamie Graham, who runs Absolute Pest Control in the Conway area, said his business license fee tripled.
“It’s not enough break me,” he said. “With me, there’s a principle factor here. … It’s enough to truly irritate you.”
Graham said he’s frustrated with the county’s decision to balance the budget on the backs of business owners. For the 21 years he’s been operating, the county’s business license fees have always been more reasonable than the area’s municipalities. He was surprised when he learned how much his license would cost.
For Graham, business has been difficult in recent years. Between hurricanes and an ice storm, he missed months of work. Hurricane Florence was the worst. Flooding from the Little Pee Dee River claimed the home he’d lived in since 1969. It took his shop, too. He finally sold his property, built another home and started over.
“I couldn’t afford to take any more losses,” he said. “Of course, now we’re dealing with the coronavirus. You talk about five years straight [of] impact. … Oh, and by the way the county’s going to go out here and tag you again.”
As more companies have realized the higher cost of renewing their county business licenses, they have contacted county council members.
“Business people … are just outraged that the tax for the business license went up,” Horry County Council Chairman Johnny Gardner said. “They want to know if there’s any way that they can get it reduced somehow.”
County officials insist they are trying to find a way to relieve some of the financial stress. They don’t plan to extend the May 1 deadline, but Horry County Treasurer Angie Jones said her office does have the authority to waive late penalties.
“We’re not trying to beat these people up and we’re not going to,” said Jones, who oversees the county’s business license and hospitality fee collections. “We’re going to help them.”
She’s encouraging business owners to contact the Business License and Hospitality Fee Office and explain their situations. If the office determines there’s a hardship, the late penalty could be waived, giving businesses more time to pay for their licenses (To contact the Business License and Hospitality Fee Office, call 843-915-5620 or email firstname.lastname@example.org).
“We’re going to work with people,” she said. “We’re going to make sure our business community stays in business.”
The treasurer’s office is taking the same approach with hospitality fees, which are due on the 20th of each month. Those are the fees collected in the unincorporated areas on hotel stays, prepared food and admission tickets.
“Just call us and give us a chance to work with you on whatever your problems are,” Vaught, the county councilman, said. “We’re going to handle it on a case by case basis. … We’re trying to keep the hardship off of everybody we can.”
Apart from the looming fee deadlines, Vaught said he’s trying to address the concerns raised by the car dealers who are struggling with the impact of higher business license fees. County staffers are crafting a proposal for restructuring the fees. Vaught said the existing system disproportionately impacts businesses in the highest tier.
“That’s just not right,” he said.
For many local businesses, the higher county fees aren’t their top concern amid this crisis, but they are yet another blow in a difficult time that doesn’t have an end on the horizon.
The Grand Strand’s job losses are already staggering. Consider that for the first week in March, 99 people filed claims for unemployment benefits in Horry County. The next week, 112 did. Last week, that number soared to 5,258 — the most of any county in South Carolina.
Gale-Bazinet said her family’s stores have avoided layoffs so far. They’ve cut TV ads and other expenses to tighten the belt, but she’s grown concerned as she’s watched the local economy grind to a halt.
Her family's two dealerships employ about 80 workers.
“I don’t want to part with anyone,” she said. “I don’t have 80 employees. I have 80 families. And 80 families, how are they going to make it to the next day?”