SC Administrative Law Court Decisions

This matter is before the Administrative Law Judge Division (Division) pursuant to the request of the Petitioner, The Liberty Corporation, pursuant to S.C. Code Ann. § 12-60-2560 (Supp. 1996), for a refund of penalties assessed on its property taxes for tax year 1995 pursuant to S.C. Code Ann. § 12-45-180 (Supp. 1996). A hearing in this matter was held on November 10, 1997, at the offices of the Division in Columbia, South Carolina. For the following reasons, I conclude that the penalties were properly assessed and are not refundable under the circumstances of this case.

Any issues raised in the proceedings or hearing of this case but not addressed in this Final Order and Decision are deemed denied. ALJD Rule 29(B).

Petitioner owns certain real and personal property located in Greenville County, South Carolina. On October 31, 1995, the property tax notices concerning those properties were mailed to Petitioner. The Petitioner contends that it processed and mailed the payments for those property taxes in early January, 1996, prior to the January 15, 1996 deadline. However, the Respondent never received those payments. Petitioner was unaware that the checks had not been cashed until early in April 1996, during a review of its outstanding checks. Upon making this discovery, Petitioner immediately mailed another set of checks for the taxes due, plus penalties in the amount of $28,890.06, on April 12, 1996. Petitioner then filed a request for a refund of the penalties paid. This request was denied by the Greenville County Auditor, Tax Collector, and Assessor on July 19, 1996. Petitioner then appealed the denial to the Greenville County Board of Assessment Appeals (Board). The Board denied Petitioner's request for refund by letter dated October 7, 1996. Petitioner then requested a contested case hearing before the Division. On February 27, 1997, this matter was remanded to the Board to afford the Petitioner the opportunity to exhaust its prehearing remedies pursuant to S.C. Code Ann. § 12-60-2560(B)(Supp. 1996). On June 12, 1997, the Board held a hearing and again denied Petitioner's refund request. Subsequently, Petitioner again filed a request for a contested case hearing before the Division.

After consideration and review of all the evidence and testimony and having judged the credibility of the witnesses, by a preponderance of the evidence, I make the following findings:

1. Notice of the date, time, place and nature of the hearing was timely given to all parties.

2. Petitioner is the owner of certain real and personal property located in Greenville County, South Carolina.

3. On October 31, 1995, the County mailed the property tax notices concerning those properties to the Petitioner.

4. On or about January 5, 1996, Petitioner issued checks for the payment of the property taxes. Petitioner's Accounting Clerk, Shirley Mays, delivered the payments to the Petitioner's mail service for mailing to the County. She did not deposit the payments directly into the United States mail.

5. The County never received the checks issued by the Petitioner in January of 1996. Petitioner was unaware that the checks had not been received by the County until April of 1996, during a routine review of its outstanding checks. Upon discovering that the checks had not been cashed, Petitioner immediately mailed another set of checks, including penalties in the amount of $28,890.06, on or about April 12, 1996. The County received these checks on April 17 or 18, 1996.

6. There is no United States postmark in evidence to determine when the checks issued by the Petitioner in January of 1996 were mailed.

Based upon the foregoing Findings of Fact, I conclude, as a matter of law, the following:

1. S.C. Code Ann. § 1-23-600 (Supp. 1997) grants jurisdiction to the Administrative Law Judge Division to hear contested cases under the Administrative Procedures Act.

2. S.C. Code Ann. § 12-60-2560 (Supp. 1997) grants jurisdiction to the Administrative Law Judge Division to conduct contested case hearings pertaining to a taxpayer's request for a refund of real property taxes.

3. S.C. Code Ann. § 12-45-180 (Supp. 1996), which governs the assessment and waiver of penalties for late payment of property taxes, provides:

When the taxes and assessments or any portion of the taxes and assessments charged against any property or person on the duplicate for the current fiscal year are not paid before the sixteenth day of January or thirty days after the mailing of tax notices, whichever occurs later, the county auditor shall add a penalty of three percent on the county duplicate and the county treasurer shall collect the penalty. If the taxes, assessments, and penalties are not paid before the second day of the next February, an additional penalty of seven percent must be added by the county auditor on the county duplicate and collected by the county treasurer. If the taxes, assessments, and penalties are not paid before the seventeenth day of the next March, an additional penalty of five percent must be added by the county auditor on the county duplicate and collected by the county treasurer. If the taxes, assessments, and penalties are not paid before the seventeenth day of March, the county treasurer shall issue his tax execution to the officer authorized and directed to collect delinquent taxes, assessments, penalties, and costs for their collection as provided in Chapter 51 of this title and they must be collected as required by that chapter. The United States postmark is the determining date for mailed payments. If the county treasurer determines by proper evidence that the mailing of a tax payment was improperly postmarked, and such error results in the imposition of a penalty provided herein, then such penalty imposed herein may be waived by the county treasurer.

(Emphasis added.)

4. In Greenville County, the duties of the county treasurer relating to the collection of current and delinquent taxes are vested in the Greenville County Tax Collector. See Greenville

County Ordinance No. 1098 (April 5, 1983), incorporating Section 65-2421, 1962 South Carolina Code of Laws.

5. A refund of taxes is solely a matter of governmental grace, and any person seeking a refund must bring himself clearly within the terms of the authorizing statute. Asmer v. Livingston, 225 S.C. 341, 82 S.E.2d 465 (1954); Guaranty Bank & Trust Co. v. S.C. Tax Comm'n, 254 S.C. 82, 173 S.E.2d 367 (1970).

6. In interpreting a statute, its words must be given their plain and ordinary meaning without resorting to subtle or forced construction to limit or expand the statute's operation. Gilstrap v. S.C. Budget & Control Bd., 310 S.C. 210, 423 S.E.2d 101 (1992). In this instance, the words of S.C. Code Ann. § 12-45-180 clearly limit a taxpayer's right to a refund of penalties imposed for late payment to those instances in which "the county treasurer [in Greenville County, the Tax Collector] determines by proper evidence that the mailing of a tax payment was incorrectly postmarked," and further state that "[t]he United States postmark is the determining date for mailed payments." The statute provides no other exceptions to the imposition of penalties, and there is no provision for payments which are mailed but never received by the county. Under the principle of expressio unius est exclusio alterius, exceptions made in a statute give rise to a strong inference that no other exceptions were intended. Pennsylvania Nat. Mut. Cas. Ins. Co. v. Parker, 282 S.C. 546, 320 S.E.2d 458 (Ct. App. 1984). Accordingly, Section 12-45-180 cannot be construed so as to allow a refund of penalties in this case.

7. The taxpayer argues that Section 12-45-180 is not the sole provision granting county officials the authority to waive penalties, and that this matter should be governed by the pertinent provisions of the Revenue Procedures Act, specifically S.C. Code Ann. § 12-60-2510, et seq. The Revenue Procedures Act is a procedural statute which was designed "to provide the people of this State with a straightforward procedure to determine any disputed revenue liability." S.C. Code Ann. § 12-60-20 (Supp. 1997). It includes a procedure for filing claims for refunds of property taxes, including penalties. S.C. Code Ann. §§ 12-60-2560; 12-60-30(27) (Supp. 1997)("tax" as used in the Act includes interest and penalties). However, the existence of a procedure for filing a claim for refund does not automatically grant the legal right to a refund. The taxpayer's right to a refund must be determined by reference to the applicable statute which provides for a refund (in this case, Section 12-45-180), and the taxpayer must "bring himself clearly within the terms of the [authorizing] statute." Asmer v. Livingston, supra, at 466. In the absence of any evidence that Petitioner's tax payment was improperly postmarked, no refund of the penalties imposed may be made. Accordingly, I conclude that the penalties in the amount of $28,890.06 were correctly added by the Greenville County Auditor and collected by the Greenville County Tax Collector in accordance with Section 12-45-180.

For all the foregoing reasons, it is hereby ORDERED that the Petitioner is liable for the payment of penalties in the amount of $28,890.06 for late payment of property taxes.

AND IT IS SO ORDERED.

_________________________________

Marvin F. Kittrell

Chief Judge

Columbia, South Carolina

April 23, 1998