Kigre, Hilton Head settle business-fee dispute

A 10-year legal battle between the Town of Hilton Head Island and a laser-component manufacturer that made its way to the S.C. Supreme Court has ended.

Town Council approved a settlement Tuesday with Kigre Inc. over business-license fees the company has claimed were unconstitutional and unfair. Kigre has 48 employees at its headquarters on Marshland Road.

Town manager Steve Riley said Wednesday the town will refund some of the fees Kigre has paid and all of the company’s penalties and interest the town has charged since 2007. Riley said the town determined through recent mediation that it had misclassified the company, putting it in a higher business-license category than it should be in. It will refund the difference between its new classification and the old one for the past nine years, which will be about $21,000, Riley said. About $55,000 in penalties will also be refunded.

“There was a lack of understanding of what the business was engaged in,” Riley said.

Tom Taylor, Kigre’s attorney, said the town classified it with companies that make heart monitors and other such medical devices, but it is a manufacturer of laser and laser components.

Taylor said the company’s fee for 2016 will drop 34 percent from $6,931 to $4,622.

“We are glad that we were able to resolve the issue,” Taylor said.

The town sued Kigre in 2006 over business fees for tax years 2002 through 2005. Kigre counterclaimed that the fee violated the Constitution’s interstate commerce clause because it was based partly on revenue for sales outside of South Carolina. Kigre lost the constitutional claim after the S.C. Supreme Court upheld the town’s fee in 2014. The U.S. Supreme Court declined to hear the case.

Kigre continued its fight in federal and state court on the allegation it was unfairly classified by the town for its business license and it had been charged too much. The federal court dismissed the case, saying it lacked jurisdiction. The state court ordered the two sides into mediation this year, and they reached an agreement Feb. 24.

Both sides said the settlement ends all lawsuits and claims between Kigre and the town.

Taylor added that Kigre now has no immediate plans to leave Hilton Head, which it had threatened to do during the thick of the legal fight.

“We are appreciative of the town,” he said, calling the settlement “a very fair resolution.”

This story was originally published March 2, 2016 at 10:28 AM with the headline "Kigre, Hilton Head settle business-fee dispute."