I-73 funding depends on local municipalities working through tax allocations
People visiting restaurants and tourist attractions in Myrtle Beach will soon see a drop in their taxes when paying their bill.
City officials sent out an email on Monday alerting people of the change in taxes starting July 1. The email followed a judge’s ruling last week in an ongoing lawsuit that prevents the county from collecting hospitality and accommodation tax in Myrtle Beach.
On Tuesday, county leaders called the change in tax collection “temporary.” The county also filed court paperwork asking the judge to reconsider his decision.
Myrtle Beach sued Horry County earlier this year over the hospitality taxes. The fee started more than two decades ago and was designed to go to road projects. The deadline to collect the tax was twice extended by county officials and leaders recently approved using some of the money for the proposed Interstate 73.
In the city’s lawsuit, it said the deadline extension was without its approval.
Myrtle Beach also passed an ordinance that paved the way for its own hospitality tax. North Myrtle Beach and Surfside Beach passed similar laws. Last week, Judge Williams Seals issued an order that allowed Myrtle Beach to collect its own and stopped the county from collecting hospitality fees inside the city limits.
It’s unclear if the judge’s ruling applies to North Myrtle Beach and Surfside Beach.
Horry County Director of Public Information Kelly Moore said while it was not certain, folks in municipalities outside of Myrtle Beach could hypothetically pay an increased hospitality fee if both governments collect on July 1.
“It’s possible if the municipalities that are not the City of Myrtle Beach also collect, we both will be collecting,” she said.
In response, North Myrtle Beach stated that only it has the ability to collect taxes in its borders and “Horry County has absolutely no authority to do so and is in clear violation of law.”
North Myrtle Beach officials say it will seek “immediate” legal recourse.
July 1 collection
Myrtle Beach merchants and retailers will now charge patrons a 3 percent accommodations tax that relates to short-term rentals such as hotels, a 2 percent hospitality tax on food and beverages, and a 1 percent admissions tax levied on tourist attractions that cost admission such as the SkyWheel.
State law caps the tax rates going to a singular municipality, so consumers will end up paying . 5 percent less in the hospitality tax and 1.5 percent less in the admission tax.
The revenue from the taxes will now go entirely to the city instead of being split between the county and Myrtle Beach.
City officials have previously said the revenue increase from both accommodations and hospitality taxes, which amounts to roughly $13.5 million, will be used to finance operations and maintenance, including police and fire services. The revenue will also provide local funding for highways, roads, streets and bridges.
Also on Tuesday, Horry County asked the judge to reconsider its decision and noted the county “has been collecting lawfully a hospitality fee” for decades. The county stated it believed the judge did not properly look at its arguments on why it should be allowed to collect the tax.
The county continued to argue it could set aside the disputed money collected during the lawsuit. If the city wins, Myrtle Beach could easily be given the questioned funds, Horry County argues.
Finally, the county continued to argue city approval was not needed to extend the tax collection deadline.
Reporters Alex Lang and Tyler Fleming contributed to the report