‘Improper taxation’: Rental company suing North Myrtle Beach to prevent new fees
A new fee being imposed on commercial businesses in North Myrtle Beach amounts to “improper taxation,” according to a longtime kayak tour company trying to prevent new regulations from taking effect.
Wyatt Todd, co-owner of Kokopelli Surf Camp, Paddleboard and Kayak Tours, told The Sun News that his business — as one of just two or three larger kayak tour companies — is specifically being targeted with these regulations because they’re going to have to scale back services in addition to paying more than the smaller companies.
City officials are on the cusp of approving changes to its definition of public parks within zoning ordinances that would allow it to impose fees and limits on commercial businesses operating on public grounds.
The changes would go into effect after Monday’s city council second reading, if approved, and will apply to every city park. The impetus for the change appears to be an attempt to address complaints of overcrowding at the popular Cherry Grove Park and Boat Landing.
The city’s amendment was first read and approved with no public comment at a March 22 planning commission meeting, but Todd said he didn’t receive details on the actual regulations until the April 4 city council meeting, long after his business had booked a busy summer of tours and invested in additional equipment to account for a growing customer base.
Contracts
As part of the implementation, the city offered contracts to six kayak tour businesses that will require those companies to pay the city 10% of its gross sales for all operations conducted at the park and limit them to a maximum use of 24 “non-motorized vessels” at a time.
Kokopelli Surf Camp, one of the six companies offered a contract, filed for a permanent injunction Friday against the city in hopes the court will stop the new rules before they get started. North Myrtle Beach officials declined to comment on the issue, as city spokesman Donald Graham said the city does not comment on pending litigation.
Kokopelli Surf Camp was then given less than a month to sign the city’s contract. Todd said he considered not signing the contract, but he ended up signing, worried that not doing so would mean having to cancel contracts with paying customers and firing employees.
He hasn’t raised prices related to the city’s additional fee yet — hopeful that his injunction will be successful — but admits he’ll likely have to do so in the future if it’s implemented.
The company, which touts five-star ratings on various social media platforms, alleges the city’s gross revenue fee amounts to a new tax unauthorized by state law, which prohibits local governments from imposing taxes unless they are property taxes or specifically authorized by the General Assembly.
The new fee also wouldn’t fall under a permissible “service of user fee,” which is permissible by local governments, because this isn’t a government service or program that the company is specifically benefiting from, Kokopelli Surf Camp alleges in the complaint.
“ ... (I)nstead this is (the city) strongarming (our business) into paying 10% of its profits for utilization of a public boat ramp which any member of the public can currently use with no 10% tax, and a ramp which Plaintiff has been using for the past decade without paying a tax and without incident,” the suit states.
New boat ramp
As part of the city’s contracts with the kayak companies, it is building a new boat ramp specifically for their use, but Todd noted that the boat ramp hasn’t been built yet despite the proposal to implement fees immediately.
The total cost of the boat ramp — estimated by the city to be about $40,000 — could be covered in two years just by collecting the proposed fee from Kokopelli Surf Camp, Todd added.
That’s in addition to a recently imposed $2 per hour parking fee at the park. Those fees are being collected to help fund a planned $400,000 park renovation that will feature construction of a larger parking lot.
Todd alleged that the city’s ultimate goal of reducing congestion on the waterway won’t be met because the improvements will likely just increase the park’s popularity, while the area’s population continues to grow.
This story was originally published May 2, 2022 at 1:58 PM.
