J. R. Cottingham (taxpayer) challenges the Oconee County Assessor's (assessor) determination that Cottingham is liable for property taxes for the 2004 tax year on two lots acquired at a tax sale. After exhausting the administrative review process before Oconee County, Cottingham paid the taxes under protest and brought the current matter before the Administrative Law Court.
Simply stated, the issue is whether Cottingham is liable for the 2004 taxes on the two properties he acquired at the Oconee County tax sale.
The facts are essentially undisputed. At the October 2003 tax sale held by Oconee County, Cottingham purchased two lots. Following the expiration of the one year right of redemption period, Cottingham received in October 2004, deeds from the county to both properties. However, in addition, Cottingham also received notice that he was liable for the property tax on the two properties for the 2004 tax year. Cottingham disagreed and brought this contested case challenging the 2004 taxes.
Liability for property tax is a creature of statute and the legislature is free to select a date or an event creating the liability. 84 C.J.S. Taxation § 60 (1954). By statute, South Carolina sets the event of liability as ownership on a specific date. More precisely "[e]ach person is liable to pay taxes and assessments on the real property that, as of December thirty-first of the year preceding the tax year, he owns in fee, for life, or as trustee, as recorded in the public records for deeds of the county in which the property is located, . . " S.C. Code Ann. Sec. 12-37-610.
Thus, the issue of determining who is liable for the taxes owed for the 2004 tax year is answered by asking who owned the property on December 31, 2003. Under the facts here, Cottingham did not own the properties on December 31, 2003. Rather, his ownership began in October 2004. Accordingly, Cottingham is not personally liable for the 2004 taxes and cannot be made to pay the taxes owed.
However, while dispositive of this case, such a conclusion fails to state the legally obvious. To wit, the lack of personal liability in Cottingham does not mean the property itself is free of liability. On the contrary, since the taxes for the 2004 year were assessed, due, and unpaid as of October 2004, the property came into Cottingham's ownership encumbered by a lien for the unpaid 2004 taxes. See S.C. Code Ann. § 12-39-140 and Town of Myrtle Beach v. Holliday, 203 S.C. 25, 26 S.E.2d 12 (1943) (once the tax books for the county close on September 30 of the tax year the taxes become a fixed charge transforming the inchoate lien created on December 31 of the prior year into an enforceable lien for collection of the unpaid taxes).
Accordingly, as long as the taxes remain unpaid, the lien existing on Cottingham's property authorizes the county to sell the property in due course at a tax sale to collect the unpaid 2004 taxes. See S.C. Code Ann. Sec. 12-45-180 ("If the taxes, assessments, and penalties are not paid before the seventeenth day of March [of the year following the tax year], the county treasurer shall issue his tax execution to the officer authorized and directed to collect delinquent taxes, assessments, penalties, and costs for their collection as provided in Chapter 51 of this title and they must be collected as required by that chapter."). Therefore, while no personal duty existed in Cottingham to pay the 2004 taxes, until payment is made by some party the property remains subject to sale for unpaid taxes.
III. Order
Accordingly, should Cottingham still desire a refund, the county shall refund the taxes paid based on the party's previously agreed upon valuation conclusion. However, if the refund is made, the county may pursue collection for the unpaid taxes in the manner allowed by law.
AND IT IS SO ORDERED
_______________________________
RAY N. STEVENS
Administrative Law Judge
Dated: September 19, 2005
Greenville, South Carolina
