Lawsuit says Beaufort County, Hilton Head collected millions of dollars in illegal fees
A Hilton Head Island resident is suing the town and Beaufort County for $227 million because of the governments’ road maintenance fees, citing the S.C. Supreme Court’s recent ruling that a similar fee in Greenville County violated state law.
The resident, Jane Calkins, alleges that the county’s $16.50 fee and the town’s $25 fee have been illegally collected since 2015 and 2016, respectively. She is seeking a jury trial on behalf of all residents who paid the fees.
Calkins wants a judge to award the group an estimated total of $227 million, according to her class-action lawsuit, which was filed in court Thursday.
Beaufort County has collected an estimated $15.8 million in county road maintenance fees since 2015, according to the lawsuit. The county also has collected about $4.9 million in town road usage fees on behalf of Hilton Head since 2016, according to the lawsuit and a previous statement from John Troyer, the town’s finance director. Both governments have used the fees to fund road projects.
“Beaufort County is currently reviewing the complaint and will address the matter during court proceedings,” county spokesman Chris Ophardt said Friday.
A Hilton Head spokeswoman did not immediately respond to a request for comment.
An Upstate man recently filed a similar lawsuit against Greenville County seeking $330 million on behalf of residents there, mirroring other class-action complaints lodged against Charleston and Richland counties.
The state Supreme Court on June 30 ruled that a $25 road maintenance fee and a $14.95 telecommunications fee imposed in Greenville County violated state law and were actually improper taxes.
The county’s road maintenance fee benefited all drivers and not just those paying the fee, meaning it did not meet the 1997 state definition of a “service or user fee,” the court found.
“Local governments, for obvious reasons, want to avoid calling a tax a tax. I am hopeful that today’s decision will deter the politically expedient penchant for imposing taxes disguised as ‘service or user fees,’” wrote Justice John Kittredge.
Since then, Calkins has alleged that the Supreme Court opinion means the Beaufort County and Hilton Head fees are invalid.
“Therefore, all illegally collected fees should be returned and a ten times multiplier should be paid to Plaintiff and each member of the class,” her lawsuit reads.
Hilton Head’s Town Council received legal advice on the town’s annual $25 fee in September and then voted 7-0 to suspend it. The fee, which went into effect in fiscal year 2017, was imposed on every vehicle registered to an address in the town.
The suspension of Hilton Head’s fee was a direct result of the Supreme Court’s ruling in the Greenville County case, said Josh Gruber, deputy town manager, in a previous interview.
“Looking at the factual background of their matter, and then looking at the factual background of the town, and understanding that they’re similar enough, we believed we needed to take action and make sure we didn’t get ourselves in a bad position,” Gruber said.
Town staff members, he said at the time, were reviewing the ramifications of the Greenville County case.
“If council wants to keep the fee in place, what would we need to do,” Gruber asked, to do that lawfully?
Beaufort County has collected the town’s fee via property tax bills, Gruber said.
Calkins, meanwhile, has alleged that Beaufort County still is collecting its own road maintenance fee. The County Council in 2015 voted to increase the fee from $10 to $16.50 per vehicle.
The town of Hilton Head Island, the Town Council, Beaufort County Administrator Eric Greenway, Beaufort County Treasurer Maria Walls, the Beaufort County Council and Beaufort County are named as defendants in Calkins’ lawsuit.
This story was originally published October 29, 2021 at 2:06 PM.
