ORDERS:
ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT
STATEMENT
OF THE CASE
This
matter is before the Administrative Law Court (“ALC”) on cross motions for
summary judgment in a
contested tax case. Based upon their respective motions for summary judgment,
the parties appear to agree that there is no genuine issue of material fact in
this matter and that the case solely hinges on the interpretation of state
statutes and regulations regarding fees for permits to sell beer, wine, and
liquor by the drink.
BACKGROUND
On
January 12, 2006, the Petitioner, Mark A. Barnes (“Barnes”), filed an
application on behalf of Long Hair RX, LLC, d/b/a Pawley’s Pub (“Licensee”) for
the renewal of Licensee’s biennial on-premises permit to sell beer and wine and
license to sell liquor by the drink. Barnes electronically paid $600 for the
renewal of the beer and wine permit and an additional $1,705 for the renewal of
the liquor license using his credit card. On that same date, Respondent South
Carolina Department of Revenue (“Department”) issued the Licensee’s beer and
wine permit. The effective dates of the permit were March 1, 2006 through
February 28, 2008. On January 17, 2006, the Department issued the Licensee’s
liquor license. The effective dates of the license were March 1, 2006 through
February 28, 2008.
On
May 21, 2007, another judge of the ALC held a hearing regarding an application
of Doubloon, LLC (“Doubloon”) for a beer and wine permit and a license to sell
liquor by the drink for the same location as the Licensee’s, 9185 Hwy. 17
(Ocean Boulevard), Pawley’s Island, South Carolina. Barnes testified at the
hearing in opposition to Doubloon’s application. Ultimately, the ALC granted
Doubloon’s requested permit and license for the proposed location based in part
on the parties’ agreement that the Department would rescind Doubloon’s permit
if Barnes won a then-pending appeal of his claim against the proposed
location’s landlord for wrongful eviction.
On
or about June 15, 2007, the Licensee surrendered its permit and license to the
Department. Barnes requested a refund of the biennial license fees that he had
paid on January 12, 2006 for the permit and license. The Department denied
Barnes’s request for a refund; Barnes then initiated the instant contested case
seeking a refund of those fees.
DISCUSSION
1. Summary
Judgment Standard of Review
Summary judgment is appropriate when “there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.” Hansson v. Scalise Builders of S.C., 374 S.C. 352, 355, 650 S.E.2d 68,
70 (2007); see also Gadson v. Hembree, 364 S.C. 316, 613
S.E.2d 533 (2005); Cisson Constr. Inc. v. Reynolds & Assoc. Inc.,
311 S.C. 499, 429 S.E.2d 847 (Ct. App. 1993). In determining whether summary
judgment is proper, “the evidence and all reasonable inferences
must be viewed in the light most favorable to the non-moving party.” Hansson, 374 S.C at 355, 650 S.E.2d at 70; see also Byers
v. Westinghouse Elec. Corp., 310 S.C. 5, 425 S.E.2d 23 (1992). “Summary judgment is not appropriate
where further inquiry into the facts of the case is desirable to clarify the
application of the law.” Gadson,
364 S.C at 320, 613 S.E.2d at 535.
2. Refund
of License and Permit Fee
Section
61-2-130 of the South Carolina Code provides in pertinent part:
If a biennial licensee or
permittee under this title closes the licensed or permitted business for any
reason during the first year of the biennial license or permit period, the
licensee or permittee or his estate must be refunded the amount of the license
or permit fee attributable to the second year of the biennial license or permit
period.
Further, 7-200.1(J)
of the Department’s regulations is entitled “Refund on Permit Applications” and
provides in pertinent part:
When an application for a
permit or license is approved by the Department and is not used, a request for
the refund of the permit or license fee must be received by the Department
within the fiscal year for which the permit was issued, and in no event will a
refund of an application fee be made unless a request is received by the
Department within sixty (60) days of the date the permit was issued. An agent
of the Department or the State Law Enforcement Division must verify in writing
that the permit was not used.
23 S.C. Code
Ann. Regs. 7-200.1(J).
The
Department contends that, pursuant to these provisions, it properly denied the
requested refund because the permit and license were surrendered outside of the
applicable statutory deadlines to obtain a refund for the second year of the
biennial permit and license. By contrast, Barnes argues that § 61-2-130 does
not apply because the Licensee closed the business before the permit and
license period began. He further argues that the sixty-day deadline of
regulation 7.200.1(J) does not apply because he is seeking a refund of his license
and permit fees, not his application fee. Finally he contends that regulation
7.200.1(J) is ambiguous, arguing that “the language of this code section cannot
possibly be reconciled by any reasonable speaker of the English language” and, moreover,
that it is unconstitutionally vague. (Pet’r’s Resp. 4). Accordingly, he
contends, the general statute of limitations for tax refunds found in S.C. Code
Ann. § 12-54-85(F), as provided for by § 12-60-470, applies, and his request is
timely because he filed it within three years.
The
cardinal rule of statutory construction is to give effect to the intent of the
legislature. Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000)
(citing Charleston County Sch. Dist. v. State
Budget and Control Bd., 313 S.C. 1, 437 S.E.2d 6 (1993)).
Legislative intent is first and foremost determined by the language of the
statute. State v. Pittman, 373 S.C. 527, 561, 647 S.E.2d 144, 161 (2007) (citing Whitner v. State, 328 S.C. 1, 6, 492 S.E.2d 777, 779 (1997)). If the statutory language is plain and
unambiguous, then its terms should be applied as written and resort to the
principles of statutory interpretation need not be had. Paschal v. State Election Comm’n, 317 S.C.
434, 454 S.E.2d 890 (1995). The literal language of a statute
should be disregarded only when the result is so plainly absurd that it clearly
could not have been the intent of the legislature. Kiriakides v. United Artists Commc’ns, Inc., 312 S.C. 271, 275, 440 S.E.2d 364, 366 (1994) (citing Stackhouse v. Rowland, 86 S.C. 419, 68 S.E. 561 (1910)). Further, “the
Court generally gives deference to an administrative
agency’s interpretation of an
applicable statute or its own regulation.” Brown
v. Bi-Lo, Inc., 354 S.C. 436, 440, 581
S.E.2d 836, 838 (2003) (citing Brown v. South Carolina Dep’t
of Health & Envtl. Control, 348 S.C. 507, 560 S.E.2d 410 (2002)).
In
South Carolina the right to a refund of taxes paid to the state is solely
statutory. C. W. Matthews
Contracting Co., Inc. v. S.C. Tax Comm’n, 267 S.C. 548, 554, 230 S.E.2d 223, 226 (1976) (stating that “[t]he right to recover taxes from the State was created by
statute” and “is not in the nature of a common law action”). Therefore,
an individual seeking a refund of taxes must do so pursuant to the appropriate refund
statute. Guaranty Bank
& Trust Co. v. S.C. Tax Comm’n, 254 S.C. 82, 173 S.E.2d 367
(1970).
Although
the court agrees in part with Barnes’s position, his reliance on § 12-54-85(F) is
misplaced. The court agrees that § 61-2-130 is not applicable to the situation
at bar. That section by its plain language applies when a licensee or
permittee closes the business during the first year of the biennial license or
permit period. Here, the Licensee closed the business before the permit and
license period began. Accordingly, § 61-2-130 is not applicable.
Similarly,
the second clause of regulation 7-200.1(J) is not controlling here. By its
clear terms, that portion of the regulation applies to refunds for application fees, not license or permit fees such as those sought here. Cf. § 61-6-1810(A) (requiring a nonrefundable fee to accompany the
application) with § 61-6-1810(B) (providing the schedule of fees for
licenses); see also § 61-2-105 (“Notwithstanding
another provision of law, all initial alcoholic liquor and beer and wine
license application fees are increased by one hundred dollars, all biennial
alcoholic liquor and beer and wine beverage fees and licenses are increased by
two hundred dollars, and all local operation permit fees are increased by fifty
dollars.”). Rather, the first clause of regulation 7-200.1(J) governs
the undisputed facts in the case at bar. That section states that, when an
application is approved but the permit and license are not used, a request for
a refund “of the permit or license fee must be received by the Department
within the fiscal year for which the permit was issued.” S.C. Code Ann. Regs.
7-200.1(J). The court agrees with Barnes that this language is ambiguous, as permits and licenses are issued for a two-year period, not “for” a fiscal
year. See § 61-2-120 (assigning biennial expiration dates to permits
and licenses according to the county in which the licensed location is
situated). Nonetheless, it is a well-settled principle of statutory
construction that, when construing ambiguous language, a court must give considerable
deference to an agency’s interpretation of its own regulation. Brown v. Bi-Lo, Inc., 354 S.C. 436, 440, 581 S.E.2d 836, 838 (2003) (noting that an administrative agency’s interpretation of
its own regulation is entitled to deference unless it is contrary to the plain
language of the regulation); see also Daisy Outdoor Adver. Co.,
Inc. v. S.C. Dep’t of Transp., 352
S.C. 113, 120, 572 S.E.2d 462, 466 (Ct. App. 2002) (noting that “an agency’s
interpretation of its own regulation deserves considerable deference”).
This is particularly so where the interpretation is of longstanding practice. Etiwan Fertilizer Co. v. S.C. Tax Comm’n, 217 S.C. 354, 60 S.E.2d 682, 684 (1950) (stating
that “where the construction of the statute has been
uniform for many years in administrative practice, and has been acquiesced in
by the General Assembly for a long period of time, such construction is
entitled to weight, and should not be overruled without cogent reasons”).
The Department has historically interpreted regulation 7.200.1(J) to prohibit a
refund of the permit and license fees allocated to the second year of a
biennial permit when the license and permit are surrendered during the second
year of the biennial period. The court finds that the agency’s construction of
this portion of the regulation is reasonable and does not conflict with the
statutory provisions governing alcohol permit and license fees. Accordingly,
the court finds no compelling reason to reject the agency’s interpretation of
this ambiguous regulation. Cf. Anderson v. Baptist Med. Center, 343 S.C. 487, 495, 541 S.E.2d 526, 529-30 (2001) (“Construction of a statute by an agency charged with its administration will be accorded the most respectful
consideration and will not be overruled absent compelling reasons.”)
Because
it is undisputed that Barnes did not request a refund until well into the
second year of the permit and license period, regulation 7.200.1(J) does not
allow Barnes to obtain a refund in this case. Accordingly, it is
ORDERED that the Department’s determination denying Barnes’s refund request is upheld.
IT IS SO ORDERED.
______________________________________
PAIGE J. GOSSETT
Administrative Law Judge
May 5, 2008
Columbia, South Carolina
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