Patrick should have told town about business license bill

info@islandpacket.comJune 20, 2013 

It is no secret that laser component manufacturer Kigre Inc. and the Town of Hilton Head Island have been in a legal dispute over business license fees for the past seven years.

So it is odd that town officials weren't consulted about a bill state Rep. Andy Patrick of Hilton Head introduced in February that would relieve Kigre of the very business license fees the company says it shouldn't have to pay.

Patrick's bill would exempt from the fees income generated from out-of-state or international manufacturing sales.

Given the number and kind of manufacturing operations in his district, Patrick's bill seems aimed at Kigre. It targets the very issue Kigre has been fighting the town over.

Patrick should have talked with Hilton Head officials about his plans to file the bill and at the very least explained his reasons for introducing it. He should have heard them out on the idea -- good, bad or indifferent.

Patrick, whose district isn't exactly known for its industrial base, says he filed the bill to encourage exports and because it would be "good for all businesses throughout the state, not just a company like Kigre on Hilton Head."

It makes you wonder why legislators from other parts of the state, where major manufacturers such as Boeing and BMW are located, haven't signed on as sponsors. His name is the only one on the bill, which stalled in committee this legislative session.

They might sign on if they figure out they can offer tax relief to big businesses with no impact on state revenue.

The timing of the bill's filing also is worth noting. It came Feb. 21, a week after Patrick scheduled a Feb. 14 event at Kigre during his campaign for the 1st Congressional District seat and three days after company COO Jeff Myers told this newspaper he planned to move Kigre's sales office to Savannah due to the town's business license fees. Six days after the bill was filed, company principal John Myers donated $1,000 to Patrick's congressional campaign.

Kigre argues that the bulk of its sales are to customers in other countries and states and contends it should pay fees based only on in-state sales. Until 2004, it paid the town's minimum fee of $62. When the town examined which businesses were paying the minimum fee, it found Kigre among them and sued the company in 2006.

We won't go into all the legal and procedural issues associated with this case, but in February 2012, Beaufort County Master in Equity Marvin Dukes upheld the legality of the town's business license ordinance, ruling against Kigre's claim that the ordinance was illegal. The company is appealing that decision.

Kigre paid $318,500 in fees and penalties for the tax years 2007 to 2012, but says it was overcharged and appealed May 17. Town Council ordered the Finance Department to reassess the bill after Kigre presented tax documents.

Patrick said he wasn't trying to choose sides in the dispute, but he did. He shouldn't forget he represents the town, too.

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