Richland County Council on Friday said it would comply with a ruling from South Carolina’s highest court, voting after a closed-door meeting to repay roughly $3.6 million in sales tax money which had been flagged as potentially spent illegally.
“The County is prepared to fully comply with the Court’s order,” the county’s administrator released in a statement. “Richland County has a solution to the Court’s ruling that is responsive, responsible and ready to be implemented.”
The vote came two days after the South Carolina’s Supreme Court ruled the state Department of Revenue (SCDOR) has the ability to block it from spending new road funding money. At issue is so-called “Penny Tax” revenue from a one-cent sales tax increase voters approved in 2012. State law only allows the revenue to be spent on transportation projects or the administration related to those projects.
The Department of Revenue in late 2015 challenged $3 million in contracts awarded to a pair of PR firms using the “Penny Tax” revenue, as well as nearly $620,000 for a “Small Local Business Enterprise” program. The agency said the three entities were not directly involved with roadwork. A state circuit judge had ruled the agency does not have the power to block the remittance of tax funds. The Supreme Court agreed with that ruling, but did clarify the lower judge should have issued an injunction against Richland County spending further tax dollars until the issue was resolved.
County Council voted Friday to suspend the SLBE program. The county will repay “Penny Tax” money spent on the program and PR firms. It noted in the release that the disputed amounts total less than 1 percent of the tax money already spent.