South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
Albert F. Stevens vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
Albert F. Stevens

Respondents:
South Carolina Department of Revenue
 
DOCKET NUMBER:
96-ALJ-17-0063-CC

APPEARANCES:
n/a
 

ORDERS:

ORDER AND DECISION

This is a contested case brought by Petitioner Albert F. Stevens. Petitioner seeks a pro rata refund of license fees on two (2) Class III video poker machines pursuant to S.C. Code Ann. § 12-21-2806 (Supp. 1995). Jurisdiction is granted to this tribunal by S.C. Code Ann. § 12-4-30(D) (Supp. 1995). The South Carolina Department of Revenue ("Department") denied the refund request as it contends that Mr. Stevens improperly applied for the licenses and is not entitled to a refund, as he was not a resident of South Carolina for two (2) years at the time of making application.

This matter was heard on April 12, 1996.

FINDINGS OF FACT

1. Albert F. Stevens is a life-long resident of Augusta, Georgia.

2. Mr. Stevens applied for two (2) Class III machine licenses on May 30, 1995 and remitted $7,000 to the Department therefor.

3. The Department issued the Class III machine licenses to Mr. Stevens for Aiken District #7.

4. William Crouch, a resident of South Carolina, operated the machines for Mr. Stevens.

5. In specifying his address on his license application, Mr. Stevens indicated the following:

6. It was readily apparent from his application that Mr. Stevens was not a South Carolina resident, but a resident of Augusta, Georgia.

7. Mr. Stevens signed the Coin Operated Device Application attesting the following: I hereby certify that the owner/operator, whether individual, partnership, or corporation, has been a resident of this state for two years, that all licenses are for machines legal to operate in this state and that the information given in the application is true and correct to the best of my knowledge and belief.

8. At the time Mr. Stevens applied for the licenses, the qualified voters of Aiken County voted in the 1994 general election to terminate cash payoffs for credits earned on coin-operated devices. However, this vote was subject to an appeal. The appeal of the vote subsequently failed.

9. As a result of the referendum being upheld prohibiting Class III machines from operating in Aiken County, Mr. Stevens applied for a refund on July 24, 1995. Until this time, he had held the licenses for approximately one month.

10. The Department determined that Mr. Stevens was not a South Carolina resident after he filed for a refund, and refused to issue a refund. On or about December 14, 1995, the Department revoked the two (2) Class III machine licenses issued to Mr. Stevens.

11. Based on his testimony and demeanor, it is evident to this tribunal that Mr. Stevens filed his application in good faith, and merely lacked an understanding of the residency requirements regarding Class III machines. This is further evidenced because he had purchased licenses for other coin-operated machines and previously held two Class III licenses for two years.

12. The Department issued documentation to licensees, including Mr. Stevens, on the General Requirements of the Video Poker Act. The residency section indicated the following, in pertinent part:

No owner, operator, or marketer may be issued Class III machine licenses unless the owner, operator, or marketer has been a resident of South Carolina for two years. The Class III machine license application now contains a statement of residency to be completed by the applicant.
Persons applying for a Class III machine license should be aware of the following:
1. The Department will verify an applicant's residency by checking to see if the applicant has filed a State resident income tax return for the last two years. If such returns have not been filed, then the Class III machine licenses will not be issued until the applicant can prove residency for the last two years and files all required tax returns and pays all taxes due. (emphasis added)


CONCLUSIONS OF LAW AND DISCUSSION

A.

1. S.C. Code Ann. § 12-21-2804(D) provides:
No owner, operator or marketer may be issued a permit by the commission for machines pursuant to Section 12-21-2720(A)(3) unless the owner, operator, or marketer has been a resident of the State for two years. The commission shall require a statement of residency to be filed with the commission as part of the application process for permits issued under Section 12-21-2720(A)(3) on forms and in a manner the commission considers appropriate. (emphasis added).
2. S.C. Code Ann. § 12-21-2806 provides, in pertinent part:
If a majority of the qualified electors within a county vote to terminate cash payoffs for credits earned on coin-operated devices after July 1, 1995, the Tax Commission shall refund to any person holding a license for the operation of coin-operated devices, on a pro-rata basis, the portion of any license fees previously paid the commission for licenses which extend beyond July 1, 1995. . . .


B.

South Carolina Code Ann. § 12-21-2804(D) states that the Department may not issue a license if residential requirements are not met. The responsibility and control of such licensure rests with the Department. Mr. Stevens did not attempt to deceive, as his place of residence was clearly discernable from his application. He merely did not understand the law. Furthermore, the Department's own policy statement indicated that it would verify an applicant's residency and until such residency was established, the licenses would not be issued. Hence, in the instant case, the Department improvidently issued the licenses in contravention of S.C. Code Ann. § 12-21-2804(D) (Supp. 1995). The Department simply made a mistake in issuing the licenses to Mr. Stevens.

S.C. Code Ann. § 12-21-2806 (Supp. 1995) requires that Mr. Stevens' license fees be returned on a pro rata basis. There is nothing in the record to justify the revocation of the licenses, especially given that the referendum made holding such licenses a legal impossibility. Further, the Department only sought revocation after the licensee, Mr. Stevens, relinquished or attempted to relinquish the licenses and sought a refund.

IT IS THEREFORE ORDERED that the Department shall refund to Mr. Stevens the fees he paid on May 30, 1995 on a pro rata basis to reflect the one month he held the licenses.

AND IT IS SO ORDERED.



______________________________

JOHN D. GEATHERS

ADMINISTRATIVE LAW JUDGE

Edgar A. Brown Building

1205 Pendleton Street

Columbia, South Carolina 29201

April 25, 1996

Columbia, South Carolina


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