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Horry County, Myrtle Beach hospitality fee lawsuit now awaits final court approval

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Horry County and Myrtle Beach are closed than ever to settling the hospitality fee lawsuit. Tyler Fleming/Staff

HORRY COUNTY — All of the municipalities and Horry County have approved the entirety of a hospitality fee settlement agreement, clearing the way for the South Carolina Circuit Court to bring the years-long legal battle to an end.

The key difference between the new agreement and the old one is how it divides up a $19 million common fund established by the agreement. Originally, Myrtle Beach wanted $9 million to go to the South Carolina Bar Association, but Horry County protested that amount, which prevented the matter from coming to an end sooner.

On March 20, it’ll be two years since Myrtle Beach sued Horry County over the collection of a 1.5 percent fee on hospitality and lodging services within municipal borders.

The lawsuit has taken numerous court appearances, hours of mediation and dozens of court filings to reach this point. Past attempts to settle the matter out of court failed first due to lack of support and then a second try failed when the SC Supreme Court ruled the agreement incomplete since the two parties couldn’t agree on all the details.

Earlier this month, Myrtle Beach and Horry County came to terms on the new agreement. All municipalities in Horry County, from Aynor to North Myrtle Beach, also approved the agreement over the last week. Horry County released the agreement’s details on Friday.

With the exception of the common fund issue, the latest agreement is largely similar to the agreement approved in September 2020, with Horry County ultimately continuing to collect the fee within municipal borders.

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Myrtle Beach will still take the lion share of the winnings from the lawsuit since it will be allowed to keep the fee revenue collected within the city. The other municipalities will be allowed to file a claim for 100 percent of the revenue collected within their respective borders, but Myrtle Beach will be entitled to most of the money reflecting how much area lodging happens within the city.

Horry County will keep the revenue from the fee collected in the unincorporated areas plus an extra amount for administrative fees.

If the latest proposal is approved, 50 percent of the established $19 million common fund will go to tourism-related infrastructure projects within municipal borders. Then 25 percent will go to the Bar Association as a donation to its charity, with the final 25 percent being held in trust for 3 years to pay for any potential future legal claims related to the fee.

Once the 3 years is up, the trust account will open and the money can be used by the municipalities for tourism-related expenses.

This settlement agreement still needs approval from the courts before it can become official. The final hearing on the matter is expected to be held on April 16 of this year.

Then, without any last-minute court objections, the hospitality fee lawsuit could finally come to a close.

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