Citing “mass confusion” among local business owners, the Horry County Treasurer’s Office on Wednesday asked a judge to clarify his ruling about where the county’s hospitality fee can be charged.
Treasurer Angie Jones also requested that the court force the county and local cities to enter mediation within 30 days to resolve their dispute over the fee.
“This is not about politics,” Jones said of her intervention in the case. “It’s about doing the right thing.”
Last week, Horry County Council announced it would continue collecting the 1.5 percent levy in the unincorporated areas and inside all local cities except Myrtle Beach. That infuriated leaders in other Grand Strand cities who argued that a June 21 decision from a circuit court judge prohibited the county from collecting the fee in all local municipalities, not just Myrtle Beach.
The conflicting positions led numerous business owners to call the Horry County Treasurer’s Office, which collects the fee, about what to do. Store owners must know the appropriate taxes and fees so they can make preparations, including programming cash registers. For several cities, new tax and fee systems were scheduled to begin Monday.
The controversy stems from the 1.5 percent hospitality fee that has traditionally been 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 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.
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 last week.
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 on June 21.
That led to the county filing 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.
That upset leaders in other Grand Strand municipalities.
“I didn’t think there was any other way to interpret the judge’s ruling,” Surfside Mayor Bob Childs has said.
Some county council members questioned the wisdom of continuing to collect the fee inside the city limits.
“It was a screw up pure and simple,” councilman Johnny Vaught said last week.
However, at a special called meeting Saturday, county council opted to stand by its decision.
For the treasurer, the concern goes beyond the lawsuit. The hospitality fee division of the treasurer’s office has 10 employees and the entire division has fewer than 50 workers countywide.
Jones said that if her office misinterprets the judge’s ruling, it could be forced to issue refunds.
There's also a problem with the cities' new taxes and fees. In some instances, they are lower than the 1.5 percent fee charged by the county. So if a Myrtle Beach business charges the new taxes and fees but the county eventually prevails in court, that business would not have collected enough in levies.
“Who is responsible for the lesser amount that’s collected?” Jones asked. “Even the businesses in Myrtle Beach are confused because it’s a lower rate.”
She pointed out that businesses need the clarification for other reasons, too.
By failing to collect hospitality fees or not remitting those fees to the county, a business could face a misdemeanor charge. If convicted, the penalty is a fine of up to $500 and 30 days in jail per offense.
"Currently there is mass confusion about whether or not this Order applies to those municipalities," Jones said in an affidavit filed Wednesday.
In the same affidavit, Jones asks the court multiple questions about how her office should proceed.
"I want to make absolutely clear that I am not taking side in this litigation," she said in court records. "My only and sole interest is representing fairly and honestly all of the taxpayers and businesses in Horry County, whether they be located in the city or the County.”
Reporter Viraj Naik contributed to this report.