Judge hears arguments in Horry County, Myrtle Beach hospitality tax lawsuit

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HORRY COUNTY, SC (WBTW) – A circuit court judge heard arguments from lawyers from both sides of a long time Horry County, Myrtle Beach hospitality tax lawsuit.

The judge is taking arguments from both sides under advisement. The settlement agreement will need the judge’s approval before becoming finalized.

The lawyers from both sides now have 30 days to submit proposed orders, before the judge makes a ruling.

In March 2019, the City of Myrtle Beach filed a lawsuit against Horry County, claiming the county has been illegally collecting “tens of millions of dollars per year” through the hospitality fee.

On August 19, leaders in both governments took action before a South Carolina Supreme Court hearing.

The lawsuit, led by the City of Myrtle Beach, argues cities and towns should have control of hospitality tax revenue generated within its own borders.

The city and county reached an agreement on September 4, where past money and unspent money will be distributed equitably, the county said.

The agreement provides:

  • That the municipalities retroactively consent to the County’s Hospitality Fee and resumption of collections within those municipalities;
  • That Hospitality Fee monies collected within the municipalities will be distributed to the municipalities from where they were collected on a monthly basis, minus a one percent administration fee;
  • That the municipalities agree to pay any new Hospitality/Accommodations Taxes/Fees that were imposed after Jan. 1, 2019, effective on the date collection of the Hospitality Fee within the municipalities resumes;
  • That the municipalities may reimpose these new taxes/fees if the County stops collecting the Hospitality Fee in those municipalities at any time in the future;
  • That after deduction for costs, fees, expenses, and claims, 50% of what remains of the $19 million (primarily from monies collected within the municipalities between Jan. 1, 2017 and the effective date of the preliminary injunction) is proportionately distributed back to the municipalities from where the Fee was collected; and
  • That distribution of the remaining 50% will be determined by the court

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