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He also is suing it.
According to court records, a 2006 town audit of the laser manufacturing business Myers and his family own and operate, Kigre Inc., determined it had not paid all of its business license fees and has owed the town more than $40,000 since 2002.
Kigre paid the fees and then filed suit against the town, claiming the way the town levies the tax -- based on a classification system developed in 1987 -- is outdated, unfair and violates both the Interstate Commerce Clause of the U.S. Constitution and the Equal Protection Clause of the 14th Amendment.
At issue is whether the town has the right to levy the tax on Kigre, which does the bulk of its business outside the state, according to Kigre's attorney, Tom Taylor.
The Constitution says the federal government has the ability to regulate commerce among the states.
It's not that simple, according to Eric Budds, executive director of the Municipal Association of South Carolina.
Regulation of interstate commerce is "one of the most complicated issues in terms of business license administration," he said.
The U.S. Supreme Court ruled in 1977 that local license fees on organizations engaging in interstate commerce are constitutional, as long as they meet a four-pronged standard of reasonableness, Budds said.
The standard says a fee must be fairly apportioned, must apply to a business that does substantial activity in the town, must not discriminate against interstate commerce and must be related to the services the town provides for the business.
"Even that test is difficult to apply," he said.
Kigre's suit also says the Town of Hilton Head Island discriminates against the business, the only laser manufacturer in town, because it is unfairly lumped in with businesses unlike it in the town's classification system. Other uses in its class include fishing and trapping, security and commodity brokers and mining, according to the town's code.
The classification system, more than 20 years old, is so outdated that its categories no longer are appropriate, Taylor said.
While the town isn't required to update its license fee ordinance, it has considered reviewing it, said town finance director Susan Simmons.
Nearby, the town of Bluffton and the city of Beaufort both have newer business license fee ordinances, according to their codes.
Even though the classification system is old, it is not unreasonable, according to a motion filed by Hilton Head.
That's the test a law has to go through in order to be considered fair under the Equal Protection Clause, town attorney Gregory Alford said.
Alford argues the town's application of its business license code is "constitutional and appropriate."
"I'm not seeing the efficacy of (Kigre's) arguments, but I've been wrong before," he said.
Judge Marvin Dukes is scheduled to hear the case in early August, Taylor said.
Myers, 50, declined to comment on the case but said he is running for mayor on a platform to "make the island more business-friendly."
"The town has been pretty steadily driving business off the island since I've moved here," he said, adding, "I'm just trying to look out for the little guy."
