Horry County, Myrtle Beach leaders talk hospitality fee settlement. Here is the latest.

While Myrtle Beach officials approved the outline of a settlement over the collection of the hospitality tax, Horry County leaders say the decision on the settlement will be up to the court.

Following a nearly three-hour executive session on Tuesday, Myrtle Beach officials approved the settlement agreement in principle. The vote essentially offers written consent for a settlement to be executed by the county and the municipalities named in the lawsuit. Those governments include Aynor, Conway, Surfside Beach and North Myrtle Beach.

Last year, Myrtle Beach sued Horry County over the collection of the hospitality fee. That sparked an 18-month legal dispute between the groups.

“A lot of hard work and effort went into this,” Mayor Brenda Bethune said of the possible settlement. “I want to thank Horry County Council for working with us to make this happen. It’s a good night.”

Bethune said a resolution came after several “very lengthy” and “very productive” meetings with county officials. She said meeting face-to-face resulted in open and honest discussions that enabled both entities to work collaboratively to draft a proposed settlement agreement.

That announcement happened about an hour after Horry County Council emerged from executive session to say a settlement was still being finalized and the panel voted for a measure that would see both Horry County and Myrtle Beach submit proposals to a judge on how the money will be dispersed.

“I feel very confident, I feel very positive,” Horry County Council Chair Johnny Gardner said about reaching a deal. He declined to talk details of the negotiations.

Both the city and county are set to argue part of the case before the Supreme Court on Wednesday morning.

Months-long fight

Myrtle Beach sued Horry County in March 2019 over collection of the hospitality tax. Myrtle Beach officials argued in the initial filing that since 2017 the county “wrongfully imposed, collected, retained and used revenues derived from the 1.5 percent hospitality fee.”

The fee is collected from hotels and other accommodations.

The lawsuit stated the 1.5 percent hospitality tax stemmed from a 1996 program to help short- and long-term transportation needs. As part of that program, a tax would apply to Horry County municipalities called a hospitality fee, the filing states. The money funded a road improvement program throughout the county.

In 2018, the Horry County Council approved $30 million from the fee towards the construction of I-73.

However, city leaders argued they did not agree to the plan nor taxes being collected after 2017.

The lawsuit did not specifically name other Horry County municipalities - such as Surfside Beach, Conway and North Myrtle Beach - as plaintiffs, but grouped them together as similarly situated plaintiffs.

That lawsuit sparked a months-long legal fight, often in public, between city and county leaders.

In June 2019, a judge appointed to oversee the case sided with Myrtle Beach and barred Horry County from collecting the fee inside of municipality limits. However, the cities could not spend the money collected.

The county appealed that decision to the state’s Supreme Court which was set to hear oral arguments on Wednesday.

At one point, Horry County and Myrtle Beach officials met behind closed doors for hours and announced they had reached a settlement in the case. However, concerns over using the hospitality tax to cover Myrtle Beach’s $6 million tax bill led to the deal falling apart.

This story was originally published August 18, 2020 at 8:03 PM.