Hospitality tax scofflaws could lose IOP business license

Isle of Palms passed an ordinance Tuesday that would allow the city to suspend the business license of a company selling prepared food if it fails to pay the city’s hospitality tax.

Dodging the city tax man while selling prepared food on the island could cost a business its license.

Council on Tuesday gave unanimous first-reading approval to an ordinance amendment that would allow the city to use that stick to spur compliance.

Annually, the hospitality tax generates about $600,000. It is a 2 percent levy on overall sales of whipped-up food served by restaurants, caterers and grocery stores.

If the tax isn’t paid on a monthly basis, violators may be fined 25 percent of the amount due for the first month and 5 percent for subsequent months up to a maximum penalty of 50 percent.

“Last year we had a provider on the island that did not pay his hospitality tax for a few months and we charged interest. They should just remit it immediately,” said Mayor Dick Cronin.

Currently, there is one business that is behind on hospitality tax payment, said Administrator Linda Tucker. She did not name the business.

“This ordinance amendment will ensure that hospitality taxes are collected and remitted to the City on a timely basis or the business could risk losing its license to operate on the island,” Tucker said.

The ordinance change is a way to tighten up on the city’s cash flow, said Mayor Pro Tem Marty Bettelli.

“This will keep everyone on their toes. You hate to think you have to pass an ordinance to keep people doing what they are doing,” he said.

The change brings IOP into line with laws governing the hospitality levy on Sullivan’s Island and Folly Beach where business licenses can be suspended for failure to pay the levy. The tax offense is described in the codes of all three municipalities as a misdemeanor that could be punished by a fine of up to $500 and up to 30 days in jail.

Council also discussed a need for change its noise ordinance. Some residents complained about music from the Morgan Creek Grill affecting their quality of life. A spokesman for the grill said the business was working with the residents to resolve the problem.

At issue is whether the Council should establish a decibel level for noise complaints or stay with the current definition of nuisance noise as being that which disturbs the quiet and repose of a home.

The city is the landlord for Morgan Creek Grill. The noise ordinance was referred to the Public Safety Committee for further study.

There was also discussion of the city goal of implementing a managed parking plan for the island under which beach daytrippers would be required to purchase a parking pass.

“We’re not where I would like to be at this stage of the game,” said Councilman Michael Loftus.

“Number one on everyone’s agenda is the parking plan,” said Councilwoman Barbara Bergwerf.

Officials have not said whether the city will be able to implement the plan this summer but it has not been shelved for this beach season.

Reach Prentiss Findlay at 937-5711