Fee dispute best solved by SC Supreme Court

Businesses and municipalities will benefit from high court's ruling on business-license fees.

info@islandpacket.comJanuary 16, 2014 

It's good news for businesses and local governments alike that the state's highest court will rule on whether the Town of Hilton Head Island may collect more in business-license fees from a company with primarily out-of-state sales.

The town sued laser-component maker, Kigre, in 2006 after the company challenged the town's right to collect the fees based on the company's gross receipts. The company had been paying the minimum fee of $62 per year, and argued it was not required to pay more because most of its sales occur outside of South Carolina.

Town officials have defended their practice, citing previous state court rulings that affirmed municipalities can impose the fees -- no matter where the sales occur.

Obviously, clarity is needed. The town has already spent nearly $79,000 in legal fees, defending the way it issues the fee. A decision by the S.C. Supreme Court will likely settle the matter once and for all and end public money funding the legal dispute.

A ruling will also benefit Beaufort County Council, which is considering altering or eliminating its business-license fee. It will give county leaders a clearer picture on the amount of money they will be leaving on the table if they eliminate the revenue source.

And local governments around the state will be helped too, many of which have long-collected business-license fees.

Some have increased reliance on such fees since the General Assembly passed Act 388 in 2006 that, among other things, capped local jurisdictions' ability to increase millage. Fees have proven to be an effective way for local governments to improve their bottom lines.

They'll need to do some refiguring if their fees are ruled inappropriate in some instances.

But S.C. businesses stand to gain the most. They are becoming increasingly tech savvy, using websites and social media to broaden their reach and bag more out-of-state sales.

Clarification on fees associated with this burgeoning source of revenue is vital.

As South Carolina continues its charge into the 21st century, government and the private sector need to know the rules of the game.

The S.C. Supreme Court is the right entity to provide them.

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