South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
Mark A. Barnes, Long Hair RX, LLC vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
Mark A. Barnes, Long Hair RX, LLC

Respondents:
South Carolina Department of Revenue
 
DOCKET NUMBER:
07-ALJ-17-0605-CC

APPEARANCES:
n/a
 

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[1] 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. [2] 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,[3] 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



[1] The Respondent filed a Notice and Motion for Summary Judgment on February 4, 2008. In response, on February 11, 2008, the Petitioner filed a document entitled “Petitioner’s Affidavit and Opposition to Respondent’s Motion for Summary Judgment, Notice and Motion for Summary Judgment and Amendment to Petition.” The Respondent filed a reply memorandum on February 28, 2008.

[2] Moreover, the second clause of regulation 7-200.1(J) directly contradicts the language § 61-6-1810(A) stating that the application fee is nonrefundable.

[3] This court can make no ruling on Barnes’s argument that regulation 700.1(J) is unconstitutionally vague, as it has no power to adjudicate a challenge to the constitutionality of a statute or regulation on its face. Ward v. State, 356 S.C. 449, 590 S.E.2d 30 (2003). However, the court would note that its finding that the language is ambiguous does not necessitate a finding that the language is unconstitutionally vague. In any event, such a determination must be left for a court of the judicial branch.


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