ORDERS:
ORDER AND DECISION
This matter comes before me on the citation issued by the Department of Revenue and
Taxation against the Rainbow Inn & Deli for failing to display a license on a Class III video poker
machine in violation of S.C. Code Ann. § 12-21-2720. After notice to the parties, a hearing was
conducted on October 31, 1995. Based upon the evidence presented, no violation occurred.
STIPULATED FACTS
The parties stipulated to the following facts at the beginning of the hearing:
1. Rainbow Inn & Deli is located on 10127 North Kings Highway in Myrtle Beach,
South Carolina.
2. On June 9, 1995 there was a Class III video poker machine located in the Rainbow
Inn & Deli.
3. The machine was properly licensed pursuant to law. The license was attached to the
side of the machine at the top.
4. A citation was written for failing to properly display the license.
FINDINGS OF FACT
I make the following findings of fact, taking into consideration the burden on the parties to
establish their respective cases by a preponderance of the evidence and taking into account the
credibility of the witnesses:
1. The video poker machine for which the citation was issued had been moved from
Charleston to Myrtle Beach to be placed in operation.
2. The license was displayed on the front corner edge on the left side of the machine.
3. The Department's revenue agent in Charleston had seen the license displayed as
indicated and did not issue any citation.
4. In May 1994, a revenue agent in Myrtle Beach requested the Rainbow Inn & Deli to
place all licenses on the face of the machine.
5. According to the revenue officer testifying at the hearing, when the video poker
industry was first regulated licenses for machines were displayed by hanging them on the wall
immediately behind the machine. The law was subsequently amended and decal stickers were
produced to be affixed to each machine.
6. Agents of the department were instructed that the licenses had to be displayed on the
front of the machine. The Department subsequently initiated more specific instructions that all
licenses must displayed on the face of the machine.
7. The Department never issued any written directives or policy statements, or
promulgated any regulations for circulation to the coin operated machines industry and licensees
regarding the proper placement of license decals. Any information about the placement of license
decals has been circulated by word of mouth.
CONCLUSIONS OF LAW
1. The Administrative Law Judge Division has jurisdiction over matters previously
determined by the Tax Commission pursuant to S.C. Code Ann. § 12-4-30 (Supp. 1994).
2. S.C. Code Ann. § 12-21-2720(A)(3) (Supp. 1994) requires the licensing of video
poker machines.
3. S.C. Code Ann. § 12-21-2726 (Supp. 1994) requires "[e]very person who maintains
for use or permits the use of, on a place or premises occupied by him, a machine subject to the license
imposed by this article by way of proof of licensing must have a current license displayed
conspicuously on the front of the machine."
4. Pursuant to S.C. Code Ann. § 12-21-2738 (Supp. 1994), a "person who fails,
neglects, or refuses to comply with the terms and provisions of this article or who fails to attach the
required license to any machine, . . . as herein required, is subject to a penalty.... If the violation
under this section relates to a machine licensed pursuant to Section 12-21-2720(A)(3), the applicable
penalty amount is two thousand five hundred dollars, no part of which may be suspended...."
5. Although there is no legislative history on the enactment of the statute, the primary
rule of statutory construction is to ascertain and effectuate the intent of the legislature. Jackson v.
Charleston Cty. School District, ___ S.C. ___, 447 S.E.2d 859 (1994). It can be determined from
the language of the statute that the goal in enacting it was to provide an easy method of determining
whether a machine was properly licensed. The statute requires that the license be displayed
conspicuously on the front of the machine to enable the revenue agent to determine, with ease,
whether the machine is licensed. Any ambiguity in a statute should be resolved in favor of a just,
equitable, beneficial operation of the law. Bennett v. Sullivan's Island Bd. of Adjustment, _____
S.C. ____, 438 S.E.2d 273 (Ct. App. 1993).
6. According to Merriam Webster's Collegiate Dictionary 10th ed., "front" means "the
forward part or surface".
7. Based upon the evidence in this case, the Rainbow Inn & Deli has complied with the
provisions of the law. The license on the machine was conspicuous and enabled the revenue agent
to determine that the machine was properly licensed. There was no evidence to the contrary and the
fact that the revenue agent issued a citation for not properly displaying the license is further evidence
that he was able to determine pursuant to the statute that the machine was licensed. Video game
machines must be registered and licensed by the Department under the procedures and guidelines
issued by the Department. S.C. Code Ann. § 21-21-2776(A) (Supp. 1994). Further, the Department
shall promulgate rules and regulations pertaining to video game machines. S.C. Code Ann. § 12-21-2798 (Supp. 1994). If the Department seeks enforcement of specific requirements relating to
licenses, then it must promulgate procedures, policies, rules or regulations under the due process
requirements of the Federal and State Constitutions. The Department must provide adequate notice
to the public by a uniform and reliable method. To implement a change in policy and then circulate
the information by word of mouth does not provide a person seeking to comply with the law adequate
notice of what is expected.
8. As long as the license is displayed conspicuously on the front of the machine, it is in
compliance with the provisions of the statute.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby
ORDERED, that no violation be issued against the Rainbow Inn & Deli located at 10127
North Kings Highway in Myrtle Beach, South Carolina and the citation issued by the South Carolina
Department of Revenue and Taxation is dismissed.
AND IT IS SO ORDERED.
_________________________________
ALISON RENEE LEE
Administrative Law Judge
December _____, 1995
Columbia, South Carolina |