ORDERS:
FINAL ORDER AND DECISION
STATEMENT
OF THE CASE
This matter is
before the Administrative Law Court (ALC or Court) pursuant to an appeal of the
decision of the Charleston County Board of Assessment Appeals (Board) by the
Petitioner Charleston County Assessor. After discovering an error in the square
footage on record for the house, the Petitioner granted the Respondents a
refund for the tax years 2005 and 2006. Upon appeal, the Board of Assessment
Appeals awarded Respondents refunds for the tax years 2000-2004 in addition to
the two years’ refund awarded by the Charleston County Assessor. The
Petitioner contends that SC Code Ann. §12-54-85, which contains a two
year statute of limitations on claims for a tax refund, applies, and that the Respondents
cannot go back beyond that time period. The Respondents contend that they are
due a refund which compensates them from the time the original error was made.
After notice to the parties, a hearing was held on May 20, 2008, at the offices
of the Administrative Law Court in Columbia, South Carolina.
FINDINGS
OF FACT
Having observed
the testimony of the witnesses and exhibits presented at the hearing and having
closely passed upon their credibility, I make the following Findings of Fact by
a preponderance of the evidence:
1. Notice
of the time, date, place and subject matter of the hearing was given to all
parties.
2. The
property which is the subject of this hearing is identified as TMS #310-07-00-072,
located at 2120 North Dallerton Circle, Charleston, South Carolina.
3. The
subject property was purchased by the Respondents in 1979. At the time of
purchase, the square footage was calculated to be approximately 1,633 square
feet. Respondents claim that the square footage at the time of purchase should
have been 1,622 square feet. This miscalculation was discovered during a
comparative property analysis that was performed in 1985 when the Respondents
refinanced their home.
4. Charleston County conducted a county-wide assessment in 1992, which resulted in the
erroneous square footage of 2,044 being placed on the property. This mistake,
which was inadvertently discovered by the Respondents, arose from a vector
calculation error in which the square footage of the garage was added to the finished
square footage of the home.
5. The
Respondents requested that Petitioner refund their property taxes which were
overpaid from 1979 through 2004. The Respondent chose to go back to 1979
because they claim their property has been overvalued since they purchased it
in 1979.
6. The
County refunded a portion of the Petitioner’s payments for tax years 2005 and
2006, based on the discrepancy in square
footage that arose from the county-wide assessment in 1992.
7. The
Respondents appealed the decision of the County by letter dated April 19, 2007.
On August 22, 2007, the Charleston County Board of Assessment Appeals met to
hear the Respondent’s appeal. By letter dated August 24, 2007, the Board
informed the Parties that they were approving a refund for the tax years 2000,
2001, 2002, 2003, and 2004 in addition to the two (2) years already awarded by
the Charleston County Assessor.
8. The
Charleston County Assessor timely appealed the decision of the Board by
notice filed September 20, 2007.
CONCLUSIONS
OF LAW
1. The
ALC has subject matter jurisdiction over this action pursuant to S.C. Code
Ann. §1-23-600 (Supp. 2007)
and §12-60-2560 (Supp. 2007).
2. Boards
such as the Charleston County Board of Assessment Appeals can act only within
the parameters of state statutory law. South Carolina Tax Commission v.
South Carolina Board of Review, 278 S.C. 556, 299 S.E.2d 489 (1983) holding
that "an order cannot be made by an administrative body which would
materially alter or add to the law.'' Banks v Batesburg Hauling Co., 202
S.C. 273, 24 S.E.2d 496 (1943); Lee v. Michigan Millers Mut. Ins. Co.,
250 S.C. 462, 158 S.E.2d 774 (1968). See also 2 Am Jur. 2d Administrative Law §
188, at 21 (1994 & Supp. 1999) and 84 C.J.S. Taxation §§ 518 & 520
(1954 & Supp. 1999).
3.
S.C. Code Ann. §12‑54‑85(F) (Supp. 2007) provides
that "claims for credit or
refund must be filed within three
years of the time the return was filed or two years from the date of payment,
whichever is later. If no return was filed, a claim must be filed within two
years from the date of payment." Although this section applies to state
taxes collected by the Department of Revenue, S.C. Code Ann. §12‑60‑2560
incorporates these same limits into requests for property tax refunds from the
county.
4. Specifically, S.C. Code Ann. §12‑60‑2560
provides that "[S]ubject to the
limitation in
§12‑60‑1750 and within the limitations of §12‑54‑85(F),
a property taxpayer may seek a refund of real property taxes assessed by the
county assessor and paid . . .by filing a claim for refund with the county
assessor. . . .” This section makes the statutory limitations of §12-54-85(F),
which apply to taxes collected by the Department of Revenue, also applicable to
the property taxes owed to the county and sets the procedure and time limits
for such actions. These statutory limitations also apply to the inverse
situation, where a taxpayer’s home is undervalued.
5.
In this case, as in Milligan, the Taxpayer does not meet the
time limitations set
forth in S.C. Code Ann. §12‑54‑85(F)(1)
(2002). This result may be harsh, but the right to apply for a refund is purely
statutory, and it is incumbent upon those seeking relief to proceed according
to the statute affording such relief. Commonwealth of Virginia v. Cross, 196 Va. 375, 83 S.E.2d 722 (1954). There is no exception provided. As
noted, the Respondent did not pursue their appeal until 2007. Furthermore,
this tribunal has no legislative powers. Its responsibility is to determine and
give effect to the intention of the legislature. To do otherwise is to
legislate, not interpret. The responsibility for the justice or wisdom of laws
rests exclusively with the legislature. Smith v. Wallace, 295 S.C. 448,
369 S.E.2d 657 (Ct. App. 1988).
6.
In enacting S.C. Code Ann. §12‑54‑85, the General
Assembly provided a remedy
for taxpayers whose property has
been erroneously assessed. At the same time, in not providing exceptions for
untimely refund claims, the legislature virtually ensured that the Department,
and by extension the political subdivisions of the State, would not be
inundated with requests for refunds after the expiration of the statutory
period. See Anonymous Taxpayers v. South Carolina Department of Revenue,
00-ALJ-17-0681 (2000).
7. The U.S. Supreme Court has recognized the problem government would
encounter if there were equitable
exceptions to statutorily mandated time limits for requesting refunds of
erroneously paid or assessed taxes:
An "equitable
tolling" . . . could create serious administrative problems by forcing the
IRS to respond to, and perhaps litigate, large numbers of late claims,
accompanied by requests for "equitable tolling" which, upon close
inspection, might turn out to lack sufficient equitable justification. . . .
The nature and potential magnitude of the administrative problem suggest that
Congress decided to pay the price of occasional unfairness in individual cases
(penalizing a taxpayer whose claim is unavoidably delayed) in order to maintain
a more workable tax enforcement system. At the least it tells us that Congress
would likely have wanted to decide explicitly whether, or just where and when, to
expand the statute's limitations periods, rather than delegate to the courts a
generalized power to do so wherever a court concludes that equity so requires. United States v. Brockamp, 519 U.S. 347 (1997).
The same problems could be
encountered by the county in its power to levy and collect property taxes.
While this situation is unfortunate for the Respondents and other taxpayers,
the State and its counties must be able to carry out their duties and bring
closure to these matters.
8.
The language of the statute is not ambiguous and is susceptible to only
one
meaning: The refund is limited to
the two‑year period, which the Petitioner has already received. Thus,
the decision of the Board of Assessment Appeals is reversed, and the original
decision of the Charleston County Assessor is affirmed.
AND IT IS SO ORDERED.
___________________________________
CAROLYN C. MATTHEWS
Administrative Law Judge
July 11, 2008
Columbia, South Carolina
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