March 18, 2014

Horry County sees increase in registration, billing of taxes for rental property

Horry County is boasting about its success, so far, in capturing more personal property taxes for vacation properties in the last tax cycle than in previous years and more than $340,000 in additional license plates fees from new residents in 2013 over 2012.

Horry County is boasting about its success, so far, in capturing more personal property taxes for vacation properties in the last tax cycle than in previous years and more than $340,000 in additional license plates fees from new residents in 2013 over 2012.

Auditor Lois Eargle announced the figures Tuesday and credited the work of her staff, the assistance of residents and the support of County Council as the reasons for the success her office has had in identifying property that should be claimed on the county’s tax rolls.

The auditor’s office sent out 82,541 personal property returns for tax year 2014, which is more than 6,500 above the returns for 2013. That number reflects the new rental accounts from people who rent their property out but previously were not paying taxes on the property’s contents or were not paying the taxes on the property as a rental property, which is higher than an owner-occupied home.

“It is yet to be determined what the fiscal impact of these discoveries will be in terms of tax dollars,” Eargle said at a press conference. “The property owners have to file their returns, then we’ll have to determine the extent of taxability, whether it’s from the current year moving forward or if there are back taxes to be billed.”

For the past few years, the county has been cracking down on personal property, such as furniture and other items, inside a residence that is used as a vacation property for more than 14 days a year. It was part of what Horry County Council Chairman Mark Lazarus campaigned on, which was to aggressively find more money for government coffers without raising taxes. Lazarus and the county council agreed at last year’s budget hearing to allow Eargle more resources and money toward cracking down on vacation property owners – which, by law, means renting a property out for more than 14 days per year – by finding them and making them pay for the property inside the rentals.

“We identified a source of income without having to raise taxes on the people of Horry County in tight times, and there’s found money out there,” Lazarus said. “It’s a very collaborative effort and it’s working.”

The county is trying to identify owner-occupied homes, second homes and investment properties that are being rented out but the homeowners aren’t paying the higher tax rate for rental properties. If a property is rented out for more than 14 days, South Carolina assesses the property at 6 percent. If it is an owner-occupied home, the rate is 4 percent.

Sen. Ray Cleary, R-Murrells Inlet, sponsored a bill in the Senate that passed last year to extend the 14-day limit to 72 days, which would impact the county’s revenue generated in this program. Cleary has said, however, more Grand Strand homeowners want to rent their properties during the in-demand summer tourist season while they live in an apartment or with relatives to offset the rising costs of wind and flood insurance. He said the House could hear the bill within the next couple of weeks.

“It has not had a full hearing in the House,” Cleary said in a phone interview Tuesday. “I’m going to start talking to some House members to see if they’ll start working on it as we speak.”

Eargle said it is too early to tell how much Cleary’s bill would impact Horry County.

“It’s still premature,” Eargle said, adding Cleary has not contacted her about the bill or how it might impact the county. “That’s the thing with House Reps and Senators, they will pass a bill and discuss a bill and never ever contact the local offices to see how that will affect us and what we really need.”

Eargle is a former state Representative herself.

When asked whether she will contact House members now that she knows they may consider the issue in the next few weeks, Eargle said she will not.

“No I haven’t [contacted them] because so much of what we do is just within the county,” Eargle said. “It’s very hard to get anything passed in the legislature that would only directly impact Horry County.”

Field Officer Toby Clardy works for the vehicle division of the auditor’s office and has led the force in identifying drivers who plan to be or have been in Horry County for 150 days or more. He, with the cooperation of law enforcement, the school system, Coastal Carolina University and Horry-Georgetown Technical College, has identified out-of-state license plates and contacted registered owners to notify them of South Carolina laws when it comes to registering a vehicle or paying the taxes if a person stays in Horry County 150 accumulative days or more.

Revenue from that effort increased by $342,083 from 2012 to 2013.

“It’s a lot of school lines,” Clardy said. “There are more and more people moving here.”

He said school registration in public schools is constant, and based on when new students move to the area.

“We’re getting more of those now than we usually do at this time of year,” Clardy said.

Two-thirds of the money collected from the license plate registrations goes to the county’s school system while the remaining one-third goes to the county’s general fund.

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