ORDERS:
FINAL ORDER AND DECISION
I. Introduction
The Oconee County Assessor (Assessor) determined that property owned by Dare B. Ward (Ward) was taxable for the tax
year 2001. Ward disagreed and brought this contested case under S.C. Code Ann. § 12- 60-2540(A) challenging the
Assessor's determination. Under the facts of this case, the structure on Ward's property is not taxable for the 2001 tax year.
II. Issue
Is the structure on Ward's property located at Lot 7 Oakmont Subdivision completed and fit for the use for which it is
intended so as to be taxable for the tax year 2001?
III. Analysis
Taxability of Property
1. Positions of Parties
Ward argues the structure in question was not complete to any meaningful degree for tax year 2001. For example, he
argues that heating and air conditioning had not been installed and plumbing connections and fixtures were not operable.
The Assessor disagrees. Rather, the Assessor argues that his visual inspection from the exterior of the building
demonstrated the structure was complete for its intended use as a residence.
2. Findings of Fact
I find by a preponderance of the evidence the following facts:
Ward's business is that of identifying houses suitable for removal to and refurbishing at a new location with the goal of
offering the newly renovated house for sale to the public. In pursuit of this objective in 1997, Ward purchased a house,
removed it from its foundation, relocated it to Lot 7, Oakmont Subdivision in Oconee County, and began the process of
refurbishing the structure. The refurbishing process took several years.
After attaching the removed house to a new foundation at Lot 7, Oakmont Subdivision, Ward installed a septic tank system
on the new property in October 1997. However, none of the plumbing fixtures were in place inside the structure. Also in
1997, vinyl siding was installed and shingles for a new roof were in place. In 1998, a driveway was added and in 1999, a
deck was added to the structure. Thus, by December 2000, the exterior was essentially complete.
On the interior, walls within the house established a three bedroom, two bath configuration. Further, all ceilings were in
place but were in need of repair. In addition, the doors to the structure were all in place but also in need of repair.
However, no heating and air conditioning was in place, no plumbing and drain lines were connected to the structure, and no
bathroom or kitchen plumbing fixtures were in place. In addition, not all light fixtures were in place. Power was available
to the structure but such was available from an outside utility pole.
Extensive changes were made to the structure in 2001 and 2002. In March 2001, sheetrocked walls were replaced. During
April 2001, the heating and air conditioning was installed. In July 2001, drain lines were installed. By August 1, 2001, a
new subfloor had been installed to cure defects in the kitchen and bathrooms. Further, ceiling repairs were made. At some
point in the latter portion of 2001, but no later than January 2002, water lines were connected to the house and kitchen
plumbing fixtures and bathroom fixtures were installed. In addition, the floors were refinished and carpet installed.
Ultimately, the house was sold to individuals who assumed residence in the house during 2002.
The Assessor did not enter the interior of the house during late 2000 or early 2001. Rather, while standing on the exterior
of the structure, the Assessor viewed the interior by peeking through an unopened window. From his view, he could see
the structure needed paint, wallpaper, and refinishing floors. However, he otherwise concluded the structure was complete
for the intended purpose of a residence.
Accordingly, the Assessor concluded the structure was taxable for the 2001 tax year. Ward disagreed with the Assessor
which presented the current dispute and resulted in this contested case.
3. Conclusions of Law
"No new structure shall be listed or assessed until it is completed and fit for the use for which it is intended." S.C. Code
Ann. § 12-37-670 (Supp. 2001). Since no South Carolina appellate decisions have construed this language, the task here is
to carry out the intention of the legislature with that intention best achieved by applying the words of the statute in their
ordinary meaning. See Smith v. Wallace, 295 S.C. 448, 369 S.E.2d 659 (1988); Hughes v. Edwards, 265 S.C. 529, 220
S.E.2d 231 (1975).
In applying the ordinary meaning of the term "completed," the few authorities in South Carolina that have addressed the
meaning of the word have not reached consistent conclusions. For example, an opinion of the Attorney General states the
following:
Where a building is completed by a contractor who constructed the same for sale and the same is otherwise complete on the
tax date except for fixtures or minor additions, . . . such building is deemed to be completed for the use intended and should
be listed and returned for ad valorem taxation.
1969-70 Op. S.C. Att'y Gen. No. 2854 at 90.
On the other hand, a decision of the Charleston County Court of Common Pleas rejected the Attorney General's
interpretation of S.C. Code Ann. § 12-37-670 on the basis that the opinion has the result of adding property to the tax rolls
when the property becomes "substantially completed." The circuit court rejected the "contention that the word
'substantially' be interpolated therein to modify the word 'complete'." Charleston County Board of Assessment Control,
et al. v. S.C. Tax Comm'n, et al., 78-CP-10-1543 (February 22, 1979).
In the instant case, I need not decide whether the meaning of "completed" is broad enough to include a "substantially
completed" building. Rather, the structure here under review on the taxing date of December 31, 2000 (1) does not reach
even the lower standard of substantially completed. Thus, no need exists to determine if the structure meets any alleged
higher standard of "completed."
On December 31, 2000, no heating and air conditioning was in place, no plumbing and drain lines were connected to the
structure, and no bathroom or kitchen plumbing fixtures were in place. In addition, not all light fixtures were in place.
While a source of power was available to the structure, such could be obtained only from an outside utility pole. Under
these facts, the structure was not substantially complete for the intended purpose of providing a habitable residence.
Indeed, necessary additions to make the structure habitable were not added until well into 2001. For example, not until
April 2001 was the heating and air conditioning installed. In July 2001, drain lines were installed, in August 2001, a new
subfloor was installed to cure defects in the kitchen and bathrooms, and at some point in the latter portion of 2001 to early
January 2002, water lines were connected to the house with kitchen plumbing fixtures and bathroom fixtures installed.
Thus, the structure on December 31, 2000 was not "completed and fit for the use for which it is intended." S.C. Code Ann.
§ 12-37-670 (Supp. 2001). Accordingly, the structure is not subject to taxation for the tax year 2001.
IV. Order
The structure located on Dare Ward's property of Lot 7 Oakmont Subdivision in Oconee County is not taxable for the tax
year 2001 since on the taxation date of December 31, 2000, the structure was not complete and fit for the use for which it
was intended. The Assessor shall promptly take such action as is necessary to reflect the non-taxability of the structure for
the tax year 2001.
AND IT IS SO ORDERED
RAY N. STEVENS
Administrative Law Judge
Dated: May 21, 2002
Columbia, South Carolina
1. For real property, December 31 of the year preceding the tax year under review is the taxation date both as to liability
and valuation. S.C. Code Ann. § 12-37-900; Lindsey v. South Carolina Tax Com'n, 302 S.C. 274, 395 S.E.2d 184 (1990);
1968 S.C. Op. Atty. Gen. No. 2508, September 12, 1968. |
