SC Administrative Law Court Decisions

This matter comes before me on the renewal application for an on-premises beer and wine permit by James Ransom for James Lounge located in Bamberg, South Carolina. After notice to the parties, a hearing was conducted on April 13, 1995. The parties stipulated that the applicant meets the statutory requirements of S.C. Code Ann. § 61-9-320 (Supp. 1994). The sole issue is whether the applicant has met the requirements of S.C. Code Ann. § 61-3-425 (Supp. 1994) relating to the owing of delinquent state or federal taxes.

I make the following findings of fact, taking into consideration the burden on the parties establish their cases by a preponderance of the evidence ad taking into account the credibility of the witnesses:

1. James A. Ransom is a resident of Bamberg, South Carolina where he has operated James Lounge since 1974 or 1975.

2. Ransom has not been employed since 1988. He does not receive any type of pension, unemployment insurance, disability insurance, or retirement benefits.

3. The Department of Revenue and Taxation conducted a search of income tax records using Ransom's name and social security number. The search did not reveal any income return after 1988.

4. The Internal Revenue Service also conducted a search of federal income tax records using Ransom's name and social security number. The search did not reveal any income tax return after 1988.

5. During the period of 1988 to 1994, Ransom operated James Lounge. The location was open Wednesday through Saturday. It has tables and chairs to accommodate 30 people comfortably. The building can hold at least 100 people. No snacks or food are served in the location. Ransom did not pay any rent only the utilities for the business.

6. He purchases beer from a wholesaler for resale in the business. Every week he purchased approximately eight cases. He sold the beer for $1.50 a can. There is a juke box in the location from which he splits the profits evenly with the owner. Some nights Ransom would make ten or twenty dollars, other nights he would make less. The gross revenue on a weekly basis could be $210.

7. Ransom did not have a sales tax license or any type of retail license. He did not file any sales tax reports. He did pay property taxes on the building. No one else is employed in the business.

1. S.C. Code Ann. § 1-23-600 (Supp. 1994) grants jurisdiction to the Administrative Law Judge Division to hear contested cases under the Administrative Procedures Act.

2. S.C. Code Ann. § 61-1-55 (Supp. 1994) grants to the Division the powers, duties, and responsibilities as a hearing officer in protested and contested matters governing alcoholic beverages, beer and wine.

3. No license under Title 61 may be renewed unless the Department and the Internal Revenue Service determine that the applicant does not owe the state or federal government delinquent taxes, penalties, or interest. S.C. Code Ann. § 61-3-425 (Supp. 1994).

4. Clearly in this case, the evidence demonstrates that there may be federal and state taxes owed. The monthly gross revenue could have been as high as $840. This monthly income may result in income which would require the filing of income tax returns as well as sales tax reports in South Carolina. No tax returns have been filed since 1988. Taxes, penalties and interest may be delinquent. Therefore, pursuant to Section 61-3-425 the license may not be issued.

5. Both the federal and state revenue departments have expressed an interest in working with Ransom to determine his tax liability if any and to establish a payment schedule which would allow Ransom to obtain the renewal of the beer and wine permit. Once a permit is granted on a conditional basis Ransom would have income to enable him to make the appropriate payments on the delinquent taxes if any.

Based upon the foregoing Findings of Fact and Conclusions of Law, there is a potential tax liability outstanding which would prevent the issuance of a beer and wine permit. It is therefore,

ORDERED that James A. Ransom meet with the Department of Revenue and Taxation within thirty days from the date of this Order to determine if there is any tax liability owing to the State of South Carolina and to develop a payment plan, if necessary. Once a payment schedule is developed, if necessary, the Department shall issue a beer and wine permit to James A. Ransom contingent upon the timely payment of taxes pursuant to the schedule. The failure to remit payments in a timely manner shall result in the administrative action against the beer and wine permit.

AND IT IS SO ORDERED.

_______________________

ALISON RENEE LEE

Administrative Law Judge Division

April _____, 1995

Columbia, South Carolina.