‘Similarly Situated Plaintiffs’: Myrtle Beach wants Horry County held in contempt over tax
The collection of the 1.5 percent hospitality tax remains in limbo as municipal lawmakers continue to insist Horry County is in contempt of court following a decision made 10 days ago.
For nearly two weeks, municipal and county leaders have sparred over the terms and conditions of a court order preventing the county from collecting the 1.5 percent hospitality tax in Myrtle Beach and “Class of Similarly Situated Plaintiffs” — which some interpret to mean North Myrtle Beach and Surfside Beach — until the lawsuit between the city and county over the tax is resolved.
In March, Myrtle Beach sued Horry County over the hospitality tax, a uniform tax imposed on sectors of the hospitality industry, including prepared meals and 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 called a hospitality fee would apply to Horry County municipalities. The money funded a road-improvement program through the county.
With the program having expired in 2017, the city claimed in the lawsuit the county extended the tax without city approval and voted to direct funding to I-73 — a long-coveted interstate that would serve as a major pipeline to and from Myrtle Beach — without its 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.
Because North Myrtle Beach and Surfside Beach are not explicitly plaintiffs in the lawsuit, county officials announced last week in a news release it would continue collecting the tax in both entities.
North Myrtle Beach City Council held a special meeting Tuesday and retreated into executive session for over an hour to discuss the ongoing litigation and the June 21 order.
While council took no action, city spokesperson Pat Dowling explained that the city is engaged in daily discussions with attorneys representing Myrtle Beach and neighboring municipalities over the tax. With the city’s July hospitality taxes due to both Horry County and North Myrtle Beach by Aug. 20, Dowling said the city hopes to have a resolution in place by August that would protect business owners from paying the double tax.
“We feel we’re making great progress,” Dowling said.
The tax has become a controversial issue in recent months with Myrtle Beach, North Myrtle Beach and Surfside Beach passing ordinances restricting the county from collecting the tax starting July 1.
Despite efforts made by North Myrtle Beach and Surfside Beach to declare the county would be in violation of the court order if the hospitality collection continued after July 1, county officials determined on Saturday in a special meeting it would continue to collect the tax, meaning residents and tourists could be taxed twice on hospitality services.
Myrtle Beach filed a motion on Monday aiming to squash the county’s intention. Myrtle Beach wants Horry County held in contempt and restricted from collecting the tax in every municipality within the county as litigation continues, according to the motion.
In response, Horry County filed a motion Tuesday afternoon defending its side, citing that only Myrtle Beach is a plaintiff in the case, and it is respecting the judge’s ruling to the letter by not collecting in Myrtle Beach.
County Council Chair Johnny Gardner said on Sunday he believes they should follow exactly what the judge writes. The other municipalities are not explicitly plaintiffs, he said, so Horry County will continue collecting the fee outside of Myrtle Beach until it’s told to stop.
“As for the judge’s decision, I am a lawyer and I have always followed what the judge wrote as a good indication of what he thinks. Not what someone might think will happen in the future,” Gardner said Sunday.
With county council determined to continue collecting the fee after meeting with its lawyer on Saturday, emails acquired by The Sun News revealed council members Johnny Vaught and Harold Worley believe Judge William Seals will soon order Horry County to stop collecting the fee, even if the county isn’t in contempt of court.
“I think the intent of the judge’s rule was to include those other municipalities,” Vaught told The Sun News on Sunday.
This story was originally published July 2, 2019 at 5:30 PM.
