How Horry County’s latest decision is keeping hospitality taxes in NMB, Surfside in limbo

Horry County Council has decided: It will continue to collect the hospitality fee come Monday.

On Saturday afternoon, council decided to continue collections on the fee levied on any hospitality services such as restaurants or hotels in the cities of North Myrtle Beach and Surfside Beach after getting legal advice in regard to a judge’s ruling in relation to a lawsuit that is allowing the City of Myrtle Beach to solely collect such fees for the time being.

“We held the meeting today to get legal advice on the lawsuit,” Horry County Council Chairman Johnny Gardner said. “We got the legal advice from our lawyers in executive session and based on that we’re staying the course.”

Council members Tyler Servant, Harold Worley and Cam Crawford were unable to attend Saturday’s meeting.

The decision was made through inaction when council said it would not be voting on any changes to the current stance regarding a judge’s decision from two weeks ago.

North Myrtle Beach Spokesperson Pat Dowling on Saturday called it a “poor decision” and said the county is not interpreting a judge’s ruling correctly.

Horry County Spokesperson Kelly Moore said on Tuesday when Horry County originally announced it would still be collecting the fees that while it was not certain, folks in municipalities outside of Myrtle Beach could hypothetically pay an increased hospitality fee if both governments begin collecting on funds that will be due toward the end of August.

“It’s possible if the municipalities that are not the City of Myrtle Beach also collect, we both will be collecting,” she said.

Earlier this year, Myrtle Beach, Surfside Beach and North Myrtle Beach passed an ordinance saying they would collect the hospitality fee starting on July 1.

Two weeks ago, a judge gave a temporary ruling in favor of Myrtle Beach regarding a lawsuit it filed against Horry County in March. The judge said until the whole affair is settled, Horry County could not continue levying the tax in Myrtle Beach.

Horry County Government sent out a news release the following week that said while it would stop collecting the fee in Myrtle Beach, it would continue collecting it in the other two municipalities. North Myrtle Beach quickly thereafter sent out a following news release saying Horry County would be violating the judge’s orders.

Most of the discussion at Saturday’s meeting took place in executive session behind closed doors as council received legal advice. The question Horry County Council asked its lawyer on Saturday was whether it’s legal for the county to collect the taxes in the municipalities that are not Myrtle Beach.

In a news release last week, North Myrtle Beach said it believed that it was included when the judge ruled in favor of the “City of Myrtle Beach, For Itself and a Class of Similarly Situated Plaintiffs.”

“We still think it’s a poor decision on the part of Horry County Council,” Dowling said Saturday.

Dowling said his city sent out a letter to businesses informing them that North Myrtle Beach would be collecting the fee for itself. He believes other municipalities have also sent out similar letters.

For Dowling and North Myrtle Beach, the judge’s ruling is clear that the county needs the consent of the municipalities before it collects the fee within city limits. Dowling said that whomever is advising the county needs to read the judge’s ruling more closely.

Gardner said it is the county’s belief that the judge’s order does not keep Horry County from collecting the fee in North Myrtle Beach and Surfside Beach because they are not explicitly plaintiffs in the case. If that were to change through a new decision later on, Horry County will reconsider its policy, Gardner said.

Council member Johnny Vaught said the outside lawyer, Henrietta Golding, briefed council and said it was her professional opinion that the judge’s order does not apply to North Myrtle Beach and Surfside Beach.

“Basically, we decided the best thing for right now is to take no action and leave it as status quo because we’re not being illegal, the judge only ruled on Myrtle Beach,” Vaught said. “We will not be held in contempt of the judge’s order.”

He said the ball is now in North Myrtle Beach and Surfside beach’s court if they want to join a lawsuit and seek exemption from Horry County’s collection of the fee.

Businesses will not have to pay the fee to Horry County until near the end of August, Horry County Treasurer Angie Jones said.

Looking forward, Gardner said there is nothing stopping North Myrtle Beach and Surfside Beach from collecting a fee in addition to the one Horry County will be.

“There is no court order telling Surfside what they can do or not do. There is no court order telling the county what it can do or cannot do in North Myrtle Beach,” Gardner said. “We’ve been doing it for years and will continue to do it until further ordered by the court.”

This story was originally published June 29, 2019 at 7:22 PM.