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 |