HILTON HEAD, SC – Kigre, Incorporated, a Hilton Head Island-based technology company, is suing the town over what it alleges is business-license practice that unfairly and illegally discriminate against it and other companies. The company, which specializes in laser equipment, says the town is unconstitutionally taxing companies that conduct business across state lines.
“What this is essentially, this is a tax grab that’s being done by municipalities,” Kirge’s VP Jeff Myers said. “They’re just using this as a way to increase taxes on the local population without them seeing it.”
The catalyst for the suit occurred when Hilton Head sought over $70,000 in business-license fees and penalties from 2002. According to Kigre, the company has not paid the fee because it believes it’s exempt under the Commerce Clause of the U.S. Constitution, which states that only the feds can regulate interstate commerce.
Kigre manufactures lasers and laser components for the manufacturing, medical, and military industries. High energy lasers for a myriad of uses, infrared glass for military aircraft, and eye-safe laser transmitters for hand-held military rangefinders are some of their products.
According to Myers, all of their business is done outside the boundaries of the town, and by requiring the company to pay another revenue-based fee, the town is unfairly levying an extra sales tax.
The town, however, says it is owed a fee based on all of the company’s gross receipts as reported to the Internal Revenue Service.
“Our position is that they don’t fall within any claimed exemption,” town attorney Gregg Alford said. “Their position is that they do. It’s a civil dispute for which we’ll seek guidance from the court.”
As for right now, it looks like neither side is backing down. The company is willing to take the case all the way to the U.S. Supreme Court, Myers said.
“We’re not stopping,” he said.
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