South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Edward D. Sloan, Jr vs Greenville County Auditor

AGENCY:
Greenville County Auditor

PARTIES:
Petitioner:

Respondant:

 
DOCKET NUMBER:
08-ALJ-17-0209-CC

APPEARANCES:
 

ORDERS:

STATEMENT OF THE CASE

            In these consolidated cases the Petitioner Edward D. Sloan, Jr. (“Petitioner”) seeks a refund of personal property taxes paid in 2006 and 2007. The Petitioner claims that the millage rates assessed for those years were excessive. The Respondent Greenville County Auditor (the “Auditor”) has made a Motion to Dismiss these actions based upon the contention that Petitioner has not exhausted his administrative remedies as required by the South Carolina Revenue Procedures Act (the “RPA” or the “Act”), S.C. Code Ann. § 12-60-10, et. seq. For the reasons that follow, the Court agrees with the Assessor’s contention and therefore dismisses the above-captioned cases without prejudice.

FINDINGS OF FACT

On March 1, 2008 Petitioner filed a letter with the Greenville County Auditor protesting personal property taxes on the basis “that the rate levy of 2006 property tax . . . exceeded the rate allowable by law.” Petitioner stated that he was making his claim his claim pursuant to S.C. Code Ann. § 12-60-2910. On March 19, 2008 Petitioner sent virtually the same letter to the Auditor with respect to 2007 personal property taxes. Twenty days later, on April 8, 2008, Petitioner filed Notices of Request for Contested Case Hearing with this Court regarding the 2006 and 2007 tax claims. After Petitioner filed the Notices, the Auditor wrote the Petitioner on May 1, 2008. The Auditor’s letter set forth a summary of the appeal process for personal property taxes under S.C. Code Ann. § 12-60-2910. The letter also stated:

[I]f you wish to protest taxes on your personal property with the Auditor’s Office and you meet the deadlines set forth in step one above, you can begin the appeal process by requesting in writing a conference with my office.  However, please keep in mind that the Auditor has no legal authority to issue a refund of school millage that exceeds legal limits and ultimate resolution of your request would require you to appeal to an Administrative Law Judge after completing the process described above.”

 

Id.  The Petitioner did not seek the conference with the Auditor as set forth in the Auditor’s May 1, 2008 letter, and no one with the County issued a ruling on the Petitioner’s personal property tax claims.

In his brief the Petitioner references an April 21, 2008 letter from the Assessor, Auditor and Treasurer in which they denied a tax refund claim. This letter states:

The Greenville County Assessor, Auditor and Tax Collector met on April 18, 2008 to consider your request for tax refund. SC Revenue Procedures Act Section 12-60-2560 provides that the aforementioned county officials are to consider all requests for tax refunds and notify the taxpayer in writing of their decision. While the Committee believes it has appropriate jurisdiction to consider this request for a refund, they do not have the authority to determine the issue of excess millage levied by a political subdivision.

 

CONCLUSION: 

Request for refund is denied.

 

TAX PAYER MAY CONTINUE APPEAL

SC Code 12-60-2560 (B) provides within thirty days after the decision is mailed to the taxpayer on the claim for refund, a property taxpayer may appeal the decision to the County Board of Assessment Appeals.

 

As the citation to S.C. Code Ann. § 12-60-2560 makes clear, this letter was sent in connection with claims for refunds of real property taxes made by Petitioner. Section 12-60-2560 relates to real property claims, and the letter explains the process that taxpayers are required to follow with respect to their real property tax appeals, including the requirement to appeal to the County Board of Assessment Appeals. This requirement applies only in real property tax appeals. This Court has addressed real property claims made by the Petitioner and discussed the April 21 letter in consolidated cases captioned Edward D. Sloan, Jr., South Carolina Public Interest Foundation, and NOLAS Trading Company, Inc. v. Greenville County Assessor, Docket Nos. 08-ALJ-17-0243-CC, 08-ALJ-17-0244-CC, 08-ALJ-17-0245-CC, 08-ALJ-17-0246-CC, 08-ALJ-17-0247-CC, 08-ALJ-17-0248-CC.

The Auditor, Assessor, and Treasurer made no ruling with respect to the Petitioner’s personal property tax claims.[1] As of the date of this order, no one with the County has ruled upon Petitioner’s claims in these personal property tax cases.

CONCLUSIONS OF LAW

A.        The RPA Procedures for Protesting Personal Property Taxes

When a taxpayer alleges illegal or wrongful collection of personal property taxes, the statutory remedy is for the taxpayer to seek a refund under the procedures described in S.C. Code Ann. § 12-60-2940[2].  In summary those procedures are as follows:

1.         Taxpayer files a refund claim with the County Auditor, id. § 12-60-2940(A); and

 

2.      The County Assessor, County Treasurer and the County Auditor render a decision on the claim, id.

 

It is only after all of these steps are taken and completed that a claim is ripe to be appealed to this Court. See S.C. Code Ann. § 12-60-2940(B) (“A taxpayer may appeal the decision by requesting a contested case hearing before the Administrative Law Judge Division in accordance with its rules within thirty days of the written denial of the claim for refund.”). If a petitioner does not follow these steps, the RPA requires this Court to dismiss the action without prejudice. S.C. Code Ann. § 12-60-2940(C) (“If a taxpayer requests a contested case hearing before the Administrative Law Judge Division without exhausting his prehearing remedy because he failed to file a claim for refund, the Administrative Law Judge shall dismiss the action without prejudice.”).

B.        The Relevant Case Law

The South Carolina Supreme Court has held in two opinions that under the plain language of the RPA, the administrative remedies and procedures provided by that Act are the exclusive remedy for any claim of “illegal or wrongful collection of taxes.”  See Brackenbrook N. Charleston, LP v. Charleston County, 360 S.C. 390, 398-99, 602 S.E.2d 39, 44 (2004) and B&A Develop., Inc. v. Georgetown County, 372 S.C. 261, 265, 641 S.E.2d 888, 890 (2007). As discussed below, those cases also establish that a court must dismiss claims for refunds without prejudice where taxpayers have not exhausted their administrative remedies. Brackenbrook, 360 S.C. at 399, 602 S.E.2d at 44; B&A, 372 S.C. at 266-67, 641 S.E.2d at 891-92.

            In Brackenbrook the taxpayers filed an action against Charleston County seeking a refund of their real property taxes.  The taxpayers in that case, like the Petitioner in these cases, alleged that they were subject to excessive millage.  Brackenbrook, 360 S.C. at 399, 602 S.E.2d at 44. The taxpayers in Brackenbrook filed their action without first exhausting their administrative remedies under the RPA.  The lower court held that taxpayers were not required to exhaust their administrative remedies, but the Supreme Court reversed and remanded for the case to be dismissed without prejudice to the taxpayers’ rights to pursue exhaustion of those remedies.  The Court noted that the purpose of the RPA is “to provide the people of this State with a straight forward procedure to determine any disputed revenue liability.”  Brackenbrook, 360 S.C. at 395, 602 S.E.2d at 42 (quoting S.C. Code Ann. § 12-60-20). See also id. at 398, 602 S.E.2d at 44 (“While the Act contains many specific procedures for taxpayers challenging their PTAs, relief under the Act is not limited to these types of protests.”).  After then recounting the refund procedures established by the Act, and the fact that the taxpayers in Brackenbrook based their claim to a refund on the millage rate, the Court held that the taxpayers’ claim for a refund was subject to the RPA.  Brackenbrook, 360 S.C. at 399, 602 S.E.2d at 44. Accordingly, because the taxpayers failed to exhaust their administrative remedies under the RPA, the Supreme Court remanded the case to the trial court to be dismissed without prejudice.  Brackenbrook, 360 S.C. at 399, 602 S.E.2d at 44.

            In B&A the taxpayers brought an action seeking a refund of real and personal property taxes without first exhausting their administrative remedies under the RPA.  B&A, 372 S.C. at 263, 641 S.E.2d at 889-90.  Just as in Brackenbrook, the taxpayers in B&A “alleged a case of excessive millage.”  B&A, 372 S.C. at 264, 641 S.E.2d at 890.  This time, having had the guidance of Brackenbrook, the lower courts dismissed the taxpayers’ claims for failure to exhaust the RPA processes.  B&A, 372 S.C. at 264, 641 S.E.2d at 890.  In the Supreme Court, the taxpayers made several arguments as to why Brackenbrook was either wrong or should not apply to their case, but to no avail.  The Court reiterated its holding from Brackenbrook and concluded that:

This case is not distinguishable from Brackenbrook, and thus, the Court of Appeals properly affirmed the circuit court’s dismissal of the action pursuant to Section 12-60-3390.[3]  Petitioners allege that Georgetown County collected both real and personal property taxes based upon an excessive millage rate thereby resulting of an overcollection of taxes allocated to the school district.  The RPA provides an administrative remedy in the form of a refund for both real and personal property taxes.  Thus, pursuant to Brackenbrook and the plain language of the RPA, petitioners must exhaust their administrative remedies before proceeding to circuit court.

 

B&A, 372 S.C. at 266-67, 641 S.E.2d at 891-92 (citations omitted).[4]                                                         

Although the requirement to exhaust administrative remedies clearly applies to refund claims based upon arguments of excessive millage, see, e.g., B&A, 372 S.C. at 266, 641 S.E.2d at 891, Petitioners nevertheless argue that they should be relieved of this obligation because it would be futile to comply with the RPA’s required procedures. Specifically, the Petitioners argue that the County Auditor, Assessor and Treasurer have no authority to address allegedly excessive millage, and thus requiring exhaustion of the RPA procedures provides no useful purpose.  This very argument, however, was raised in Brackenbrook, but it failed. Even the dissent in that case made the same argument about alleged futility, but to no avail:  “The county assessor has no authority regarding millage rates and relief under § 12-60-2560 is inappropriate.”  Brackenbrook, 360 S.C. at 402, 602 S.E.2d at 46 (Moore, J., dissenting). Notwithstanding the “futility” concern expressed by the dissent, the majority of the Supreme Court required compliance with the procedures set out in the RPA.  Thus, this futility argument in the context of the RPA is foreclosed and is not a legally viable argument.

C.        Petitioner’s Failure to Follow the RPA Procedures, Thus Necessitating Dismissal

Petitioner also argues he exhausted all administrative remedies. The Court disagrees. As the Appendix attached to this order demonstrates, the Petitioner did not follow the steps required to exhaust administrative remedies, either under S.C. Code Ann. § 12-60-2940, the relevant statute, or S.C. Code Ann. §  12-60-2910, the statute to which both Petitioner and the Auditor referred in their correspondence. Once the Petitioner sent his March 1 and March 19 letters to the Auditor, the next step was to await a decision from the Auditor, Assessor and Treasurer, and then pursue review of that decision with this Court. The Petitioner, however, did not wait on that decision. Instead, only twenty days after sending the March 19 letter, the Petitioner filed Notices of Request for Contested Case on April 8, 2008. The Court takes the time to note here that there is no time limit set forth in the RPA for the Auditor, Assessor and Treasurer to rule on a claim. The Court further notes that, absent any direction in the Statute, it is not reasonable to require a ruling from these officials a mere twenty days after receiving a protest appeal. Moreover, an individual taxpayer does not have the authority to unilaterally impose time restrictions and deadlines under the RPA.

The foregoing analysis does not change because both the Petitioner and Auditor believed that S.C. Code Ann. § 12-60-2910 governed the Petitioner’s claims. First, as stated above, the Petitioner filed Notices of Contested Hearings only twenty days after filing his March 19 claim, and before the Auditor sent his May 1 letter. Second, even if S.C. Code Ann. § 12-60-2910 applied, Petitioner did not exhaust the procedures and remedies that this Statute requires. Specifically, Petitioner did not have a conference with the Auditor as S.C. Code Ann. § 12-60-2910(A) requires, and he did not receive a ruling from the Auditor as S.C. Code Ann. § 12-60-2910(C) requires. See pages two and three of the Appendix attached hereto.

It is thus clear that Petitioner has not exhausted the administrative process and remedies because he did not wait for a ruling from the Auditor, Assessor and Treasurer. The RPA very clearly provides that a decision from these officials is a prerequisite to initiating an appeal in this Court. See S.C. Code Ann. § 12-60-2940(B) (“A taxpayer may appeal the decision by requesting a contested case hearing before the Administrative Law Judge Division in accordance with its rules within thirty days of the written denial of the claim for refund.”). The RPA is equally clear that, where the administrative processes established by the Act have not been followed, the Court must dismiss any cases prematurely filed in this Court:  “If a taxpayer requests a contested case hearing before the Administrative Law Judge Division without exhausting his prehearing remedy because he failed to file a claim for refund, the Administrative Law Judge shall dismiss the action without prejudice.” S.C. Code Ann. § 12-60-2940(C) (emphasis added).

Thus, under the plain language of the RPA and the Supreme Court opinions addressing this language, the Petitioner’s failure to adhere to the procedures set out in the RPA mandates that this Court dismiss these cases without prejudice.

ORDER

            IT IS HEREBY OIRDERED that the above-captioned cases be dismissed without prejudice.

            AND IT IS SO ORDERED.

 

May 18, 2009

Columbia, SC

______________________________________

John D. McLeod, Judge

S.C. Administrative Law Court

 



[1] Petitioner’s counsel claimed at a hearing that this April 21 letter was sent to all taxpayers regarding all tax claims, personal and real. Petitioner has presented no record evidence, however, to support this contention.

 

[2] S.C. Code Ann. § 12-60-2940 provides:

(A) Subject to the limitations in Section 12-60-1750, and within the time limitation of Section 12-54-85(F), a property taxpayer may seek a refund of property taxes assessed by the county auditor and paid, other than taxes paid on property the taxpayer claims is exempt unless the exemption is the homestead exemption, by filing a claim for refund with the county auditor who made the personal property tax assessment on the property for which the tax refund is sought. The auditor upon receipt of a claim for refund shall immediately notify the county treasurer and county assessor. A majority of these three officials shall determine the taxpayer's refund, if any, and shall notify the taxpayer in writing of their decision.

 

(B) A taxpayer may appeal the decision by requesting a contested case hearing before the Administrative Law Judge Division in accordance with its rules within thirty days of the written denial of the claim for refund.

 

(C) If a taxpayer requests a contested case hearing before the Administrative Law Judge Division without exhausting his prehearing remedy because he failed to file a claim for refund, the Administrative Law Judge shall dismiss the action without prejudice.

 

[3]           Section 12-60-3390 mandates dismissals in cases in which cases are prematurely filed in the circuit court prior to exhaustion of administrative remedies under the RPA.  The RPA contains identical provisions requiring dismissal where a taxpayer prematurely initiates a contested case in this Court. See  S.C. Code Ann. § 12-60-2940(C) (personal property tax claims must be dismissed without prejudice if RPA procedures have not been exhausted).

 

[4] Brackenbrook and B&A are consistent with numerous rulings from this Court dismissing tax refund cases for failure to exhaust administrative remedies. Godfrey v. Lexington County Assessor, Docket No. 09-ALJ-17-0055-CC (March 24, 2009); Harward v. Newberry County Assessor, Docket No. 08-ALJ-17-0262-CC (November 13, 2008); Dinwiddie v. Charleston County Assessor, Docket No. 06-ALJ-17-0103-CC (September 11, 2006); Harper v. Charleston County Assessor, Docket No. 06-ALJ-17-0039-CC (September 11, 2006); Ilderton v. Charleston County Assessor, Docket No. 06-ALJ-17-0031-CC (September 11, 2006); Parris v. Beaufort County Assessor, Docket No. 05-ALJ-17-00302-CC (August 22, 2005); B.V. II v. Orangeburg County Assessor, Docket No. 04-ALJ-17-0368-CC (July 27, 2005); L. Williams v. Orangeburg County Assessor, Docket No. 04-ALJ-17-0276-CC (March 9, 2005); J. Williams v. Orangeburg County Assessor, Docket No. 04-ALJ-17-0275-CC (March 9, 2005); Kelley v. Lexington County Assessor, Docket No. 01-ALJ-17-0578-CC (January 18, 2002); Middleton v. Horry County Assessor, Docket No. 00-ALJ-17-0453-CC (September 14, 2000); Professional Drive Associates, LLC v. Horry County Assessor, Docket No. 00-ALJ-17-0482-CC (September 12, 2000); Caldwell v. Horry County Assessor and Horry County Auditor, Docket No. 00-ALJ-17-0386-CC (July 25, 2000); Brookshire v. Horry County Assessor and Horry County Auditor, Docket No. 00-ALJ-17-0365-CC (July 25, 2000); Woodgeard v. Horry County Assessor and Horry County Auditor, Docket No. 00-ALJ-17-0364-CC (July 25, 2000); Stadium Club Partners, LLP v. Richland County Tax Assessor, Docket No. 00-ALJ-17-0227-CC (July 5, 2000).


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