Horry County could be restricted from collecting hospitality tax from every municipality within its limits.
Myrtle Beach filed a motion Wednesday asking the court to stop the county from collecting the 1.5 percent hospitality tax in all municipalities within county limits with a lawsuit pending between both entities. 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.
Wednesday’s motion comes after county leaders publicly claimed they would continue to collect the uniform tax in all areas except Myrtle Beach, including North Myrtle Beach and Surfside Beach, which both passed ordinances earlier this year restricting the county from collecting the hospitality tax starting July 1.
“The county is therefore in contempt of the authority of this court,” the motion states.
Horry County Director of Public Information Kelly Moore told The Sun News on Tuesday that 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 the law.” Officials added they would seek “immediate” legal recourse, which both Surfside and North Myrtle Beach did by filing motions Wednesday afternoon.
Earlier this year, Myrtle Beach sued Horry County over the hospitality tax, a uniform tax imposed on sectors of the hospitality industry, including prepared meals, food and beverages sold in or by establishments.
As part of the suit, the city asked the judge to prevent the county from collecting the tax as the lawsuit is heard.
Myrtle Beach said in its lawsuit the 1.5 percent hospitality tax the county collected stemmed from a 1996 program to help short- and long-term transportation needs. As part of the program, a tax would apply to Horry County municipalities called a hospitality fee. The money funded a road-improvement program throughout the county.
With the program expiring in 2017, the city claimed the county extended the tax without city approval and voted to direct funding to I-73 without Myrtle Beach’s consent. Myrtle Beach asked a judge to declare the Horry County ordinance that extended the tax deadline invalid and to prevent the county from collecting the hospitality fee.
According to the judge’s order, the county “unilaterally attempted to extend the hospitality fee for five years and then, just months later, attempted to remove the Sunset Provision altogether.”
“The County knew municipal consent was required as it previously obtained municipal consent, but it nevertheless acted unilaterally to preserve a revenue source,” the order states.
Seals also ruled that granting the city’s request was the only way to protect Myrtle Beach residents as the lawsuit is argued.
However, Seals’ decision does not end the case as the both sides will continue to debate the merits of the lawsuit.