Horry County, Myrtle Beach to enter a third day of hospitality tax mediation
Horry County and Myrtle Beach will hold a third round of mediation this week in hopes of finding a compromise in an ongoing dispute over collections of the hospitality fee in municipal limits.
Horry County Council Chairman Johnny Gardner confirmed that representatives from both governments will meet Thursday at 10 a.m. with Mediator Karl Folkens to once again see if they can find common ground. Myrtle Beach and Horry County spent over 20 hours mediating in August with no resolution reached.
Gardner said the two governments agreed it was worth giving the matter another shot ahead of the South Carolina Supreme Court hearing an appeal of the case.
“I can guarantee you the county is going into it with the best intentions,” Gardner said.
In March, Myrtle Beach sued Horry County over the collection of a hospitality tax on services like food and hotels. Mediation is a required part of a lawsuit in the State of South Carolina before a case can head to trial.
Horry County and Myrtle Beach have already satisfied the required mediation time. Gardner said he is “absolutely hopeful” the two governments can come together this time around.
The discussions inside mediation are private, and the public is not able to sit in on the meeting. Any resolution from the mediation process will become public once it is approved.
If mediation is unsuccessful, the S.C. Supreme Court will hear an appeal filed by Horry County before the main lawsuit can continue.
How we got here
Horry County’s collection of 1.5 percent of the hospitality tax stemmed from a 1996 vote to help short- and long-term transportation needs. As part of the program, the tax called a hospitality fee would apply to Horry County municipalities.
The money funded a road-improvement program throughout the county. With the program originally set to expire in 2017, it was extended in perpetuity by Horry County Council that same year without Myrtle Beach’s renewed consent.
In 2018, county officials voted to dedicate the hospitality funds toward public safety and building I-73. Council’s decision resulted in Myrtle Beach, North Myrtle Beach and Surfside Beach all passing ordinances earlier this year allowing them to collect the tax and barring the county from collecting any hospitality taxes the municipalities collect within their borders starting July 1.
In March, Myrtle Beach, on behalf of itself and the other municipalities, sued Horry County over its collection of the hospitality tax.
As part of the suit, the city claimed the county needed consent from municipal leaders to continue to collect the tax within city limits after the program expired. Myrtle Beach asked the judge to prevent the county from collecting the tax as the lawsuit was heard.
While county officials argued Myrtle Beach was going to destroy any plans to construct I-73, municipal leaders in a May news conference said the purpose of the lawsuit was about home rule and protecting taxpayers, not an attempt to kill I-73.
Since then, both Horry County and Myrtle Beach have continued to file motions to take control of the tax.
In June, Seals ordered Horry County to cease collecting the fee in the municipalities. He allowed the municipalities to collect the fee, but they must keep the revenue in a third-party trust.
Horry County then appealed that decision. The appeals court told the municipalities they could continue collecting the hospitality fee during the lawsuit.
Horry County and Myrtle Beach underwent two days of mediation in attempt to bring an end to the lawsuit. The governments were unable to reach an agreement.
In August, Gardner said he would still like to see a deal reached sooner to avoid a lengthy appeals and trial process.
Reporters David Weissman and Anna Young contributed to this report.
This story was originally published October 28, 2019 at 5:05 PM.
