High-tech laser manufacturer threatens to leave Hilton Head

bheffernan@islandpacket.comFebruary 17, 2013 

Saying he's "had it" with the town's treatment of businesses, the chief operating officer of a Hilton Head Island laser-component manufacturer is threatening to move the company's sales operations to Savannah.

Jeff Myers of Kigre, which has operated on Hilton Head since 1986, is ready to relocate the department "within days." He cited a dispute over business-license fees that has stretched nearly six years.

"I've had it," Myers said Thursday.

He said the company should not have to pay island business license fees -- which are assessed according to gross revenues -- on interstate and international sales. About 98 percent of Kigre's sales are outside the state, Myers said.

In Savannah, companies pay business license fees only on business done within the state, according to the city of Savannah's Revenue Department. Moving Kigre's sales office -- Myers declined to give a specific Savannah location -- might not free the company from paying Hilton Head's fees, however. That's because the business would still manufacture and research its products on Hilton Head, according to Myers.

Town attorney Brian Hulbert said businesses manufacturing products on the island but selling them through out-of-state offices still must pay a portion of the product's cost.

'THE SAME RULES'

Town Council will talk this week about forming an economic development corporation to help attract and retain white-collar businesses that don't degrade the environment -- businesses like Kigre, Myers said.

Myers declined to say how many people the company employs. According to several tech-industry and business-directory websites, between 20 and 50 employees work at the company.

"Kigre is certainly the kind of business that we'd like to retain here on Hilton Head, but they've got to play by the same rules as everybody else," Mayor Drew Laughlin said Friday.

"If they're talking about relocating then I'm certainly sorry to hear that. I wouldn't want to see them go," Laughlin added.

He doesn't think the town's business license ordinance or fees are keeping businesses from moving to the island or driving them from it.

Myers disagrees.

"They'll sit there and publicly say how much they like clean industries and how they want that here and they want high-paying jobs and so on, but then they sit there and charge illegal, unconstitutional taxes," Myers said.

THE BACKGROUND

The courts have disagreed.

A Feb. 7 ruling by Beaufort County Master in Equity Marvin Dukes III found the town's business license ordinance, adopted nearly 30 years ago, and the fees were legal. The decision is being appealed by Kigre, according to town staff attorney Gregory Alford.

The town sued Kigre in 2006 to collect more than $41,000 in unpaid fees and penalties for the tax years 2002-05. The company paid under protest, a move that should have triggered a hearing before Town Council. However, the town neglected to hold that hearing, according to town staff, and returned the money to Kigre.

Myers ran unsuccessfully for Town Council last fall on a pledge to reduce the number of town committees and replace town manager Steve Riley with someone "who understands business and economics."

"In more than 10 years of being town attorney, I can recall less than a handful of business license disputes," Alford said.

Follow reporter Brian Heffernan at twitter.com/IPBG_Brian.

Related content:

Kigre's website

Judge rules for town in Hilton Head business-fee suit, Feb. 8, 2012

Trial over Hilton Head's business licenses adjourns without resolution, Dec. 9, 2010

Trial begins in dispute over Hilton Head business fees, Dec, 8, 2010

Bluffton caps most business fees at $50,000, Aug. 10, 2010

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