The South Carolina Supreme Court is siding with the state's tax agency over the Richland County Penny Tax, saying the funding must only be used for transportation projects.
The opinion came down Wednesday.
The South Carolina Department of Revenue has said for some time the county unlawfully used part of the tax, which was approved by voters in 2012 and put in place in 2013.
SCDOR says the state law only allows for the these kinds of tax to be used on transportation projects and administrative costs. But an audit by the DOR found penny tax money was being used for two outside public relations firms and by the county's small local business enterprise program for software and legal services that weren't transportation related.
The DOR wanted to withhold penny tax funds collected from being distributed back to the county until it could be proven the money was being spent properly. The Supreme Court, however, says the department legally can't stop giving the money to the county.
However, the justices agreed the revenue agency had a right to tell the county how the money could be spent.
The Supreme Court left open the possibility that a lower court could force the county to pay back some of the money spent on non transportation projects.