Judge approves hospitality fee settlement between Horry County, municipalities

Judge approves hospitality fee settlement between Horry County, municipalities

HORRY COUNTY, S.C. (WMBF) – The fight surrounding hospitality fees between Horry County and municipalities has been settled.

On Tuesday, Judge Williams Seals filed his approval of the settlement that was brought forward by Horry County and the city of Myrtle Beach.

This case has been going on for nearly two years. Myrtle Beach filed the lawsuit in March 2019 against Horry County, claiming that the county was illegally taking millions of dollars in hospitality fees from the municipalities.

It stems from a resolution passed in 1996 that allowed Horry County to collect a 1.5% hospitality tax. The money was spent on numerous road projects throughout the county.

The resolution was slated to expire in 2017.

But in December 2016, the county passed an ordinance that extended the Sunset Provision on the 1.5% hospitality fee to Jan. 1, 2022. According to Myrtle Beach leaders, the county did not receive their consent.

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All parties involved in the case eventually agreed to a settlement, but the city and county didn’t agree on how to divide up the $19 million that the county was holding in a trust. So, in September, both sides presented their case.

The city of Myrtle Beach wanted to split the money between the municipalities and the South Carolina Bar Foundation 50-50, while Horry County argued that the municipalities would split $18 million, with $1 million set aside for documented claims and none would go to the South Carolina Bar Foundation.

This breakdown shows how much money each municipality will receive under the county's settlement distribution plan.
This breakdown shows how much money each municipality will receive under the county's settlement distribution plan. (Source: Judge Seals' filing)

The judge ruled in favor of Horry County’s settlement distribution proposal.

“The court finds that while the South Carolina Bar Foundation has laudable goals including low cost or no cost legal representation, the Hospitality Fee in this case was paid by tourists, vacationers, and residents alike with the expectation that the moneys would be used only for tourism related purposes,” according to the Seals' court filing.

The judge went to explain that all money from the settlement should be used for tourism-related services. Those projects and services include civic center, coliseums, highways, beach access and beach renourishment.

The court documents go on to state that having 100% of the settlement money going to participating municipalities, such as North Myrtle Beach and Surfside Beach, would create $13.9 million in positive economic impact for the community.

“Thus, providing the money to the Participating Municipalities rather than the South Carolina Bar Foundation would have a significant economic impact in Horry County and would support more jobs, add more payroll, and increase total economic activity and economic benefit for all,” according to the judge’s ruling.

Seals' filing directs the parties to immediately begin implementing the settlement agreement.

Horry County Chairman Johnny Gardner commented on the judge’s ruling to have the money distributed to the municipalities, calling it a win.

“That’s a good win, that’s a big win, even though the county per se doesn’t get any of that money, it goes to the cities but it stays in the county. A rising tide lifts all boats,” Gardner said.

The city of Myrtle Beach can appeal the judge’s ruling on the settlement distribution.

WMBF News has reached out to the city of Myrtle Beach for a comment on the judge’s ruling. We are waiting to hear back.

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