SC Administrative Law Court Decisions

This matter is before the Administrative Law Court (“ALC” or “Court”) pursuant to a request for a contested case hearing filed by Blackbaud, Inc. (“Blackbaud”) challenging the South Carolina Department of Revenue’s (“Department”) final agency determination (“Determination”) dated June 15, 2007. In its Determination, the Department found that Blackbaud was not entitled to claim job development credits (“JDCs”) pursuant to the South Carolina Enterprise Zone Act of 1995 (the “EZA”) for new jobs it created after the “cut-off date” established by the Revitalization Agreement (the “RVA”) between Blackbaud and the Advisory Coordinating Council for Economic Development for the State of South Carolina (“Council” or “CCED”).

After notice to the parties, a hearing was held on January 31, 2008 at the offices of the Court in Columbia, South Carolina. Both parties appeared at the hearing, introduced evidence, and provided testimony. After careful consideration of the evidence, the Court finds and concludes that Blackbaud correctly calculated the number of jobs eligible for the JDCs.

Any motions or issues raised in the proceedings, but not addressed in this Order are deemed denied pursuant to ALC Rule 29(C).

FINDINGS OF FACT

General and Historical Background

1. Blackbaud is an “S” corporation, incorporated under the laws of the State of

South Carolina. It develops fundraising and financial computer software and provides additional services to non-profit organizations, such as the Red Cross, and various colleges and universities. At some time it moved its headquarters from the state of New York to Mount Pleasant, Charleston County, South Carolina.

2. Blackbaud filed an application with the Council on October 7, 1997 asking for approval to participate in the South Carolina Enterprise Zone Program (the “EZP”). It sought certification to qualify for enterprise zone incentives and receive JDCs.[1] The application was filed in conformity with the Enterprise Zone Guidelines adopted by the Council on December 12, 1996.

3. As part of the application process, Blackbaud negotiated the terms for the RVA with the Council; the RVA – as agreed to by both parties – was delivered to the Council on October 6, 1997. The RVA provides that:

a. it was received by the Council on October 7, 1997 and became effective on October 22, 1997;

b. the term “Job Development Credit” or “JDC” means “the credit claimed by the Company against employee withholding from Company employees pursuant to this Agreement and the Code”;

c. the “cut-off date” for Blackbaud to qualify for JDCs was October 22, 2002, the fifth year anniversary of its effective date (date of approval of the initial application by the Council);

d. Blackbaud would create a minimum of 300 new jobs at its new facility to be constructed on Daniel Island, Berkeley County;[2]

e. Blackbaud would provide a benefits package to full-time employees that would include heath care;

f. Blackbaud would invest a minimum of $29,600,000 in the project before the cut-off date;

g. Blackbaud would not be eligible to retain JDCs until a final RVA had been negotiated and executed by both Blackbaud and the Council;

h. “New Job” has the same meaning as defined in S.C. Code Ann. § 12-6-3360 “except that it shall be deemed to include only such jobs as are created at the Project between the first day of the Company’s taxable year in which it enters into this RVA and the Cut-off Date”;[3]

i. the term “Minimum Job Requirement” means the minimum number of New Jobs the Company has agreed to create, prior to the cut-off date, and maintain before claiming any JDCs. Once it meets the Minimum Job Requirement, the Company could fall below the Minimum Job Requirement by 15 percent or exceed the Minimum Job Requirement by 50 percent and remain eligible to claim JDCs.

j. Blackbaud could not claim JDCs in excess of 100% of the amount of the project costs listed in the RVA.

4. At the time Blackbaud entered into the RVA and became eligible to claim JDCs, the Guidelines issued and approved by the Council (on December 12, 1996) were consistent with the RVA’s definition of “Minimum Job Requirement” which contained what is referred to as the 85%/150% rule.[4]

5. The Council gave preliminary approval for Blackbaud’s participation in the EZP on October 24, 1997.

6. Blackbaud created 398 jobs and met the investment requirements between the first day of the year in which it entered into the RVA and the cut-off date (October 22, 2002). On the South Carolina Quarterly Withholding Returns (“WH returns”)[5] it filed with the Department, it claimed JDCs in excess of those attributable to 398 jobs.

7. Leise Ross (“Ms. Ross”) was employed by the South Carolina Department of Commerce (“Department of Commerce”) for approximately 15 years. She worked with the enterprise zone program (“EZ program”) and was its manager for approximately three to four years. Her title was “Program Director, Global Business Finance Division.” She testified at the hearing that once a business had filed an application for participation in the EZ program and it had been approved by Council, it had five years to create the minimum number of new jobs and make the capital investment, as stated in its RVA, to qualify for JDCs.

On September 30, 2001, Ms. Ross mailed a letter to Blackbaud stating that once Blackbaud certified in writing to the Council that the minimum jobs had been created and the minimum capital investment had been made, it could begin claiming JDCs through the refund/rebate method. Further, she stated in the letter that:

Your Agreement states that a minimum of 300 jobs will be created at the Project prior to October 22, 2002 (the Cut-Off Date). The Company must provide proof that this minimum number of full-time jobs has been created, and that health care benefits are available, prior to the Cut-off Date and prior to making its first claim.

Once the Company has met and certified its job minimum, the Council will allow the Company to fall below the minimum by 15 percent (255 jobs), or exceed the minimum by up to 50 percent (450 jobs), and still remain eligible to claim Job Development Credits.

Your Agreement also states that the Company must make a minimum capital investment of $29,664,000, prior to the Cut-Off Date. When certifying that the minimum capital investment has been made, statements from contractors or invoices evidencing the purchase of equipment, or annual state property tax returns, are acceptable.

Finally, the Company must provide our office with its South Carolina Employee Withholding Number and its Federal Employer Identification Number.

(Emphasis added).

Ms. Ross explained the 85%/150% rule at the hearing, stated that it was applicable to Blackbaud, and stated that its repeal by the Council in 2004 applied only to applications submitted after February 2004. Attached to this letter was an exhibit entitled “Exhibit C—Quarter Report.” It was a blank form which contained the following provision:

Job Fluctuation Allowed for Collection of JDCs:

Low:__________ High_________

(15% under min.) (50% over min.)

8. On September 30, 2001, Ms. Ross sent another letter to Blackbaud. In it she stated the following: (1) Blackbaud had created the minimum jobs required and had completed the minimum capital investment required at its Berkeley County facility; (2) Blackbaud could “begin calculating JDCs effective October 1, 2001”; (3) JDCs could “not be claimed more than once per quarter”; (4) JDCs could not “be claimed for more than 15 years”; (5) the Department would be notified of the certification by the Council; (6) the 15-year window for claiming JDCs would begin with Blackbaud’s first request for a refund; (7) since the project was in a “Least Developed” county, Blackbaud was eligible for a refund of “100% of the total, maximum Job Development Credit.” On the same date, Ms. Ross, as Director of the Council, signed the RVA
and gave it final approval.[6]

9. Lori Regalski (“Ms. Regalski”) worked in the Human Resources Department at Blackbaud from approximately 1999 to 2004, serving as its Enterprise Program Administrator. She computed the number of newly created jobs that Blackbaud asserted it qualified for under the EZP, submitted the WH returns to the Department, and submitted the South Carolina Annual Withholding Reports to the Council (which reflected the number of these new jobs). Ms. Regalski testified that the Council never communicated to her in any form during her employment with Blackbaud that the reports she filed with the Council were inaccurate or improperly completed.

10. LeAnn Logue (“Ms. Logue”) was employed by Blackbaud in 2004 as its manager of Human Resources. She is currently employed with Blackbaud as its Director of Human Resources. Since beginning employment with Blackbaud, she has been responsible for and has submitted its quarterly WH returns and annual withholding reports to the Department and the Council, respectively, which reflected the number of new jobs claimed. The Council has never communicated to her in any form that the WH returns or the annual withholding reports Blackbaud submitted were inaccurate or improperly completed.

11. John Swearingen (“Mr. Swearingen”) is the supervisor of employees at the Department who audit WH returns from which JDCs are claimed. He testified that the Department has conducted approximately 500 audits of the 250 taxpayer-companies and that the Department of Commerce sends to the Department each month a list of the companies it has certified under the EZP.

12. Jerilyn Van Story (“Ms. Van Story”), an employee with the Department for the last 14 years, serves as a liaison between the Department and the Department of Commerce on matters concerning the enterprise zone incentives. She participated in the drafting of the Department’s publication on annual tax incentives (pursuant to the EZP) and testified that a company may only receive the tax incentives for the number of new jobs it creates prior to the cut-off date. Her interpretation is based on the Council’s 1996 guidelines.

Audit, Proposed Assessment and Request for hearing

13. The Department audited Blackbaud’s WH returns in 2003 for the 2002 year. It did not raise any concerns to Blackbaud although Blackbaud listed more than 398 newly created jobs for each quarter and claimed JDCs for the jobs in excess of 398. The Department did not audit Blackbaud again until after the Department of Commerce deleted the 85%/150% rule in 2004. In 2005, the Department audited Blackbaud’s WH returns for the periods January 1, 2003 through December 31, 2005. The audit revealed that Blackbaud claimed credits (in the WH returns) for newly created jobs after October 22, 2002 (the cut-off date). Further, it determined that Blackbaud had claimed credits on its WH returns for new jobs created after the cut-off date which exceeded the cut-off date maximum of 398 jobs. Blackbaud claimed an amount up to 450 jobs on each of the applicable WH returns. The number of jobs it claimed exceeded the cut-off date number (398 jobs). The schedule below reflects the jobs Blackbaud reported as qualifying for the JDCs for the applicable quarters and the number of jobs the Department disallowed:

14. The Department issued a proposed assessment to Blackbaud on August 9, 2006 (“Proposed Assessment”). It disallowed JDCs for all new jobs created after October 22, 2003 that were in excess of 398. The Proposed Assessment proposed to recoup Two Hundred Eighty Four Thousand Two Hundred Forty Six and no/100 ($284,246.00) Dollars of the JDCs which Blackbaud had previously received, together with interest. Blackbaud disputed Two Hundred Eighty One Thousand Two Hundred Sixty Four and No/100 ($281,264.00) Dollars (“Disputed Amount”). The difference between the Proposed Assessment and the Disputed Amount equals Two Thousand Nine Hundred Eighty Two and No/100 ($2,982.00) Dollars, the amount of JDCs that Blackbaud claimed for severance pay. Blackbaud does not protest the amount included in the Proposed Assessment allocated to JDCs taken for severance pay and agrees to pay this amount to the Department, together with applicable interest.

15 On October 26, 2006, Blackbaud filed a timely protest to the Proposed Assessment.

16. On June 15, 2007, the Department issued its final agency determination in which it denied the JDCs, as described in the table below, together with interest:

17. Blackbaud timely requested a contested case hearing with this Court to review the Department’s final agency determination.

18. The issue in this case is whether Blackbaud may, pursuant to the provisions of the RVA and the Guidelines (in effect when the RVA was initially filed, approved, and when the RVA became final with the Department of Commerce), claim JDCs for newly created jobs up to 150% of the minimum required by the cut-off date (150% of 300 or 450).

CONCLUSIONS OF LAW

Based on the foregoing Findings of Fact, I conclude as a matter of law:

1.                          The ALC has jurisdiction of this matter pursuant to S.C. Code Ann. § 12-60-460 (Supp. 2007).

2.                          The standard of proof in administrative proceedings is a preponderance of the evidence. Anonymous v. State Bd. of Med. Exam’rs, 329 S.C. 371, 496 S.E.2d 17 (1988).

3.                          In South Carolina, the right to recover taxes paid to the state is statutory in nature. C.W. Matthews v. S.C. Tax Comm’n, 267 S.C. 548, 230 S.E.2d 223 (1976). Any person seeking a refund of taxes must file the claim pursuant to the appropriate refund statute. Guaranty Bank & Trust v. S.C. Tax Comm’n, 254 S.C. 82, 173 S.E.2d 367 (1970). Since a refund of taxes is solely a matter of legislative grace, any party seeking such must bring themselves squarely within the authorizing statute. Asmer v. Livingston, 225 S.C. 341, 82 S.E.2d 465 (1954).

4.                          The trier of fact must weigh and pass upon the credibility of the evidence presented. See S.C. Cable Television Ass’n v. Southern Bell Tel. And Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1998). Further, the trial judge who observes a witness is in the best position to judge the witness’s demeanor and veracity and evaluate his testimony. See, e.g., McAlister v. Patterson, 278 S.C. 481, 299 S.E.2d 322 (1982).

5.                          The cardinal rule of statutory interpretation is to ascertain the intent of the legislature set forth in the terms of a statute. State v. Scott, 351 S.C. 584, 588, 571 S.E.2d 700, 702 (2002). A statute should be given a reasonable and practical construction consistent with the purpose and policy expressed in the statute. Davis v. Nations Credit Fin. Servs. Corp., 326 S.C. 83, 484 S.E.2d 471 (1997). All rules of statutory construction are subservient to the one that legislative intent must prevail if it can be reasonably discovered in the language used, and that language must be construed in the light of the intended purpose of the statute. McClanahan v. Richland County Council, 350 S.C. 433, 567 S.E.2d 240 (2002). The determination of legislative intent is a matter of law. Charleston County Parks & Recreation Comm’n v. Somers, 319 S.C. 65, 459 S.E.2d 841(1995).

The EZA

6.                          In 1995, the General Assembly enacted the EZA. S.C. Code Ann. § 12-10-10 et. seq. The EZA authorized qualifying businesses to receive various tax benefits for creating and maintaining certain levels of expenditures, such as for training costs and facilities, acquiring and improving real estate whether constructed or acquired by purchase, or in cases approved by Council, acquired by lease or otherwise, and for creating jobs.

The Advisory Coordinating Council for Economic Development for the State of South Carolina, also known as the South Carolina Coordinating Council for Economic Development, was created pursuant to the EZA; it is a body or division within the South Carolina Department of Commerce. The General Assembly delegated authority to it to enter into revitalization agreements with businesses in South Carolina that qualified for the tax incentives, tasked it with the job of determining the available incentives that were appropriate for each project, required it to certify the total benefits for each project, required it to establish criteria for the determination and selection of qualifying businesses, required it to include in its criteria requirements relating to the capital costs of and the projected employment to be produced by the project, and required it to ensure that the business fulfills the requirements of Title 12, Chapter 10.

7. The General Assembly provided in S.C. Code Ann. § 12-10-110 that Chapter 10 must be liberally construed in conformity with the findings provided in S.C. Code Ann. § 12-10-20 thereof.

8.                          In § 12-10-20, the General Assembly stated its intent in enacting the EZA in Chapter 10:

(1) the economic well-being of the citizens of the State is enhanced by the increased development and growth of industry within the State, and that it is in the best interests of the State to induce the location or expansion of manufacturing, processing, services, distribution, warehousing, research and development, corporate offices, technology intensive, and certain tourism projects within the State to promote the public purpose of creating new jobs within the State;

(2) the inducement provided in this chapter will encourage the creation of jobs which would not otherwise exist and will create sources of tax revenues for the State and its political subdivisions;

(3) the powers to be granted to the Advisory Coordinating Council for Economic Development by this chapter and the purposes to be accomplished are proper governmental and public purposes and that the inducement of the location or expansion of manufacturing, processing, services, distribution, warehousing, research and development, corporate offices, and certain tourism facilities within the State is of paramount importance.

(4) The state’s per capita income has not reached the United States average and certain rural, less developed counties have not experienced capital investment, per capita income, and job growth at a level equal to the state’s average. The economic well-being of these areas will not be sustained without significant incentive to induce capital investment and job creation.

§ 12-10-20 (Emphasis added).

It is apparent that the General Assembly intended by enacting this statute to provide tax incentives for businesses to locate or expand manufacturing, as well as other businesses in this state, especially in certain rural areas. For instance, a qualifying business was authorized to claim a higher percentage of the claimed JDCs (100%) if the expenditures were made in counties that were “least developed.” § 12-10-80(D)(1)(a). Blackbaud hired new employees and invested a large sum of capital in a rural, less developed county in conformity with the EZA.

9. The South Carolina General Assembly codified the meaning of various applicable terms and provisions in S.C. Code Ann. § 12-10-30 (Supp. 1997):

(1) “Council” means the Advisory Coordination Council for Economic Development;

(2) “Employee” means an employee of the qualifying business who works full time within the enterprise zone;

(3) “Qualifying business” means an employer that meets the requirements of Section 12-10-50 and other applicable requirements of this chapter and, where required under Section 12-10-50, enters into a revitalization agreement with the council to undertake a project under the provisions of this chapter;

(4) “Project” means an investment for one or more purposes in Section 12-1-80(B) needed for a qualifying business to locate, remain, or expand in an enterprise zone and otherwise fulfill the requirements of this chapter;

(5) “Withholding” means employee withholding under Chapter 9 of this title.[7]

10. The General Assembly provided in S.C. Code Ann. § 12-10-50 (Supp. 1997) that a business must meet the following criteria, in order to qualify for the tax incentive benefits provided in Chapter 10, Title 12:

(1) be primarily engaged in a business of the type identified in Section 12-6-3360;[8]

(2) provide a benefits package to full-time employees which include health care;

(3) enter into a revitalization agreement which is approved by the Council, except that no revitalization agreement is required for a qualifying business with respect to Section 12-10-80(D).

Further, it provided in § 12-10-50 that the Council would determine if the available incentives were appropriate for the project, would certify that the total benefits of the project exceeded the costs to the public, and that the business otherwise fulfills the requirements of Chapter 10.

11. The General Assembly provided in S.C. Code Ann. 12-10-60 (Supp. 1997) that Council could enter into an RVA with each qualifying business with respect to the project and that the terms and provisions of each RVA must be determined by negotiations between the Council and the qualifying business. Further, it provided that the RVA must set a date by which the business will have completed the project.

12. The General Assembly provided in S.C. Code Ann. § 12-10-80(A) (Supp. 1997) that if the business qualified for the tax benefits (by meeting the minimum job requirements and minimum capital investment provided for in its RVA), it could claim JDCs against its withholding tax liability on its quarterly state withholding tax return (by retaining an amount of the employee withholdings).

13. The General Assembly provided in § 12-10-80(A) that a business may claim JDCs if it has met the minimum job requirement and minimum capital investment provided for in the final RVA. Further, it provided that the qualifying business would thereafter be authorized to claim its JDCs against its withholding on its quarterly state withholding tax return for the amount of the JDCs allowable under § 12-10-80.

Regulations and Guidelines

14. The General Assembly provided in S.C. Code Ann. § 12-10-100(E) that the Council could promulgate regulations to implement the provisions of Chapter 10 after the effective date of the EZA (April 4, 1995). Further, it provided that any regulations promulgated would remain in effect until the convening of the General Assembly at its 1996 session, at which time the Council “shall comply with the requirements of Chapter 23 of Title 1.”[9] The Council has never promulgated any regulations.

In lieu of promulgating regulations, the Council issued Guidelines to assist it and taxpayers in determining eligibility for JDCs.[10] It adopted Guidelines on December 12, 1996. These Guidelines were effective when the initial RVA was signed in 1997 between the Council and Blackbaud and when the RVA received final approval in 2002.

The Guidelines contained a definition of “Minimum Job Requirement” which incorporated the “85%/150%” rule:

The [Council] will allow a company, once it meets the minimum job requirement, to fall below the minimum job requirement by 15% and remain eligible to retain and withdraw Job Development Fees. If the Company exceeds the minimum job requirement, the Company may retain and withdraw Job Development Fees on the excess jobs up to 50% of the minimum job requirement within the five year time period beginning upon the date of approval.

(Emphasis added).

The definition of “Minimum Job Requirement” in the RVA provides for the following:

[T]he minimum number of New Jobs the Company has agreed to create, prior to the Cut-Off Date, and maintain before claiming any Job Development Credits. Once it meets the Minimum Job Requirement, the Company may fall below the Minimum Job Requirement by 15 percent or exceed the Minimum, Job Requirement by 50 percent and remain eligible to claim Job Development Credits.

Negotiations and Audits

15. The process began with negotiations between the Council and Blackbaud. The initial RVA was executed on October 22, 1997 which provided that Blackbaud had to create a minimum of 300 new jobs prior to October 22, 2002. On October 22, 2002, Blackbaud gave notice to the Council that it had created 398 new jobs, which was 98 more than the minimum required. Also, it notified the Council that it had made the required capital investment. The Council immediately certified to the Department that Blackbaud was eligible to claim JDCs and Blackbaud began filing WH returns with the Department and claimed JDCs. Sections 12-10-80(A)(9) and 12-54-100 provided that the WH returns of a qualifying business had to be audited by an independent certified public accountant, and the audit had to be filed with the Council and the Department.[11]

16. The Department did not conduct an official audit of Blackbaud’s WH returns until after the Department of Commerce deleted the “85%/150%” rule in 2004. In its 2004 amendment, the Council stated that “[j]obs created in excess of the ‘Minimum Job Requirement’ shall be deemed to include only such ‘New Jobs’ as are created at the ‘Project’ prior to the ‘Cut-off Date’ as those terms are defined in the final [Revitalization Agreement].” This Guideline repealed the “85%/150%” rule effective February 21, 2004.

On its WH returns beginning with the quarter ending on March 31, 2003 through the quarter ending on December 31, 2005, Blackbaud reported and claimed tax incentives between 422 and 450 new employees each quarter. In its audit conducted in 2005 and 2006, the Department disallowed on each WH return the reported new employees in excess of 398. The issue is whether Blackbaud should be able to claim the excess of 398 new employees as reported on each of the WH returns filed during this time.

Parties’ Arguments

17. The Department maintains that the Guidelines defining “Minimum Job Requirement” (that was effective at the time the RVA received final approval) provided that Blackbaud could only qualify for JDCs based upon the number of new jobs it had created on the date the RVA received final approval. It asserts that the words “within the five-year period beginning upon the date of approval” refers only to jobs that had been created on the date of final approval. It opines that any newly created jobs in excess of the 398 in existence on the date of final approval cannot qualify Blackbaud for additional JDCs. In support of this argument, it opines that “New Job” is delineated in the RVA to have the same meaning as contained in § 12-6-3360 of the Code, i.e., be deemed to include only such jobs as are created at the Project between the first day of Blackbaud’s taxable year in which it enters into this Agreement and the Cut-off Date.

18. Blackbaud and the Council negotiated this RVA. The “85%/150%” rule was in effect when the initial and the final RVA were executed. Blackbaud maintains that the “85%/150%” rule authorized it to claim JDCs attributable to all newly created jobs up to 150% of the minimum job requirement of 300, or 450, for five years after its obtained final approval. It asserts that the Department commenced the instant audit only after the Council amended its Guidelines in 2004 which deleted the “85%/150%” rule. Further, it asserts that when the RVA was approved by the Council, it qualified for and remained qualified to claim JDCs pursuant to the RVA for up to 450 newly hired employees for five years. Its position is supported by the Department of Commerce, the agency charged with overseeing the EZP and for certifying to the Department the JDCs each qualifying business is entitled to claim.[12] Further, the director of the EZP for the Department of Commerce testified that it was the Council’s interpretation that the 150% rule was not modified or extinguished by the cut off date and that Blackbaud’s interpretation of the maximum number of new jobs for which it could claim JDCs was correct.

For the quarters audited, Blackbaud entered employment numbers between 422 and 450, which was in the High category. Each of the reports which contained these numbers were filed with the Council and reviewed by it. The Council stamped these reports as being in compliance, and the Council never determined Blackbaud to be out of compliance with its RVA.

19. It is clear to this Court that the language in the Guidelines labeled “Minimum Job Requirement” provides that a company, after it meets the minimum requirement (in this instance it was 300) to obtain final approval of its RVA, is eligible for and may claim JDCs on newly created jobs in an amount not to exceed 150% of the Mimimum Job Requirement (450 in this case), for a five-year period commencing on the date the RVA received final approval by the Department of Commerce. If the Court were to adopt the Department’s position, it would be required to treat the five-year period stated in the Guidelines as that period occurring between the date of the RVA’s initial approval and its final approval. This Court does not believe that the General Assembly intended to authorize an unqualified business to claim JDCs prior to final approval of its RVA.

20. Blackbaud timely filed its WH returns with the Department. Further, Blackbaud timely filed its reports with the Department of Commerce. The Department of Commerce certified to the Department that Blackbaud had met the requirements of the RVA and was eligible to receive JDCs for the jobs it created after the cut-off date for up to 150% (those jobs listed in its WH returns). Since Blackbaud has complied with all the provisions contained in the RVA and is in good standing with the Department of Commerce, the Court finds that it is eligible to claim the JDCs listed in its WH returns. Blackbaud’s interpretation complies with all the instructions and assertions required by the Council. Courts give great weight to long standing agency interpretations. Cf. Buist v. Huggins, 367 S.C. 268, 276, 625 S.E.2d 636, 640 (2006) (“The construction of a statute by the agency charged with its administration will be accorded the most respectful consideration and will not be overruled absent compelling reasons.); Georgia-Carolina Bail Bonds, Inc. v. County of Aiken, 354 S.C. 18, 26, 579 S.E.2d 334, 338 (Ct. App. 2003) (“Although not binding or controlling, this court gives deference to the opinion of a state agency charged with the duty and responsibility of enforcing a state statute.”).

Further, as required by the Administrative Procedures Act, this Court accords much credibility to the Council’s specialized knowledge in managing the EZP and its interpretations of its own Guidelines in this important area of economic development incentives. See § 1-23-330(4).

21. The General Assembly’s purpose for adopting this incentive was to foster and promote new employment and it mandated that the EZA be interpreted liberally. The Court finds that Blackbaud is entitled to claim the JDCs as shown on its WH returns for the quarters subject to the instant audit by the Department.

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law,

IT IS HEREBY ORDERED that Blackbaud is entitled to claim the JDCs as shown on its WH returns for the quarters subject to the instant audit by the Department.

AND IT IS SO ORDERED.

_________________________________

Marvin F. Kittrell

May 15, 2008 Chief Administrative Law Judge

Columbia, South Carolina