SC Administrative Law Court Decisions

This is a contested case brought by the Petitioner, Wynn S. Phillips, concerning a valuation of property at 131 Lawand Drive for the 1993, 1994, 1995, 1996, and 1997 tax years. The Petitioners exhausted their prehearing remedies with the Assessor and the Richland County Board of Assessment Appeals (Board) and are now seeking a contested case hearing before the Administrative Law Judge Division. A hearing was held at the office of the Administrative Law Judge Division (ALJD) April 8, 1998.

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion by the Parties, I make the following Findings of Fact by a preponderance of evidence:

1. The property involved in this case is situated in Richland County at 131 Lawand Drive.

2. The Petitioner requested a review of his 1993, 1994, 1995, 1996, and 1997 Notices of Classification, Appraisal and Assessment of Real Estate (Notices). The Respondent determined that the request for 1993, 1994, 1995, and 1996 Notices were untimely. However, the Respondent determined that the request for review of the 1997 Notice was timely.

3. The Petitioner utilizes 131 Lawand Drive as rental property. There are two buildings -- a one-story and a two-story building -- located upon the property. The one-story building is dilapidated and, for all practical purposes, worthless. The two-story building is approximately 2,000 square feet. It contains three suites - Suites "A," "B" and "C." Suite A is located downstairs and contains approximately 2,000 square feet in 7 rooms. Suites B and C are in the upstairs portion of the building. Suite B is 1,100 square feet consisting of 5 rooms. Suite C is 900 square feet consisting of 3 rooms.

4. The Petitioner leased either all or a portion of his property to Jack Sutherland d/b/a Divex as Sutherland's administrative offices in 1993. Mr. Sutherland performed contract work for the United States Government and other Governments which utilized a wide array of explosive devices, explosive compounds, radioactive materials, poisons and various gases. Mr. Sutherland was unfortunately killed in an explosion September 6, 1993. After Mr. Sutherland's death, the U.S. Environmental Protection Agency (EPA) inspected the Petitioner's property and determined to conduct a "clean-up" operation of the Lawand site, as well as other sites used by Sutherland. To that end, the EPA seized the Petitioner's property. The EPA thereafter posted a security guard twenty-four hours a day upon the property and constructed an eight-foot wooden fence around the property.

Afterwards, the EPA sought to impose a lien upon the Petitioner's property to recover the "clean up" cost pursuant to Section 107 (1) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9607(1). It was never established whether that lien was filed or, if filed, whether it has been satisfied or removed.

5. The Petitioner objects to the imposition of property taxes upon his property while access to his property was denied by the EPA and South Carolina Department of Health and Environmental Control (DHEC). The "clean up" activities apparently ended on November 15, 1996. However, the Petitioner never filed a request with the Assessor to review the valuation of the property for tax years 1993, 1994, 1995, and 1996. The Petitioner did send correspondence to the Richland County Treasurer's Office informing that office that he had filed for protection under the U.S. Bankruptcy Code in April of 1994. That filing did not prohibit the levying of taxes upon the Petitioner's property, but rather stayed the collection and invocation of a legal action by Richland County due to taxes that were assessed.

6. The Respondent originally denied the Petitioner's review of his property for tax year 1997 because the request was untimely. However, Assessor Cloyd explained at the hearing into this case that the appeal was timely. After reviewing the Petitioner's property, the Assessor determined that the one-story building was dilapidated. Since the property was not specifically exempt from taxation, he gave the building a nominal value of Five Hundred ($500.00) Dollars. Additionally, the Assessor determined that the two-story building located upon the property was a functioning office building and therefore determined to maintain the original assessed value for that building.

The Petitioner contends that the taxes levied upon his property are unjust. He supported his contention that the two-story building is overvalued by the fact that only part of the building has been rented since he reacquired the possession of his property. Specifically, Suites A and C remain vacant.

The only evidence of the current value of the Petitioner's property is the 1997 Notice, which set forth the market value of $223,600.00. The Assessor offered no evidence, whatsoever, supporting his appraised valuation of the two-story building. In fact, neither the Petitioner nor the Assessor offered any evidence to indicate the value the Assessor placed upon the two-story building during his appraisal of the property.

Based upon the above findings of fact, I conclude as a matter of law the following:

1. S.C. Code Ann. §12-60-2540 (Supp. 1995) authorizes the Division to hear this contested case pursuant to Chapter 23 of Title I of the 1976 Code of Laws, as amended. The taxable status of real property for a given year is to be determined as of December 31 of the preceding tax year. S.C. Code Ann. §12-37-900 (1976); Atkinson Dredging Company v. Thomas, 266 S.C. 361, 232 S.E.2d 592 (1976).

2. In S.C. Code Ann. § 12-37-930 (Supp. 1997) the Legislature set forth how real property must be valued:

All real property shall be valued for taxation at its true value in money which in all cases shall be held to be the price which the property would bring following reasonable exposure to the market, where both the seller and buyer are willing, are not acting under compulsion, and are reasonably well informed as to the uses and purposes of which it is adapted and for which it is capable of being used.

3. An assessor's valuation is presumed correct with the burden being on the property owner to disprove the assessor's determination. 84 C.J.S. Taxation § 410 (1954). It is the burden of the taxpayer contesting an assessment to show that the valuation of the taxing authority is incorrect. Ordinarily, this would be done by proving the actual value of the property. The taxpayer may, however, show by other evidence that the assessing authority's valuation is incorrect. If he does so,

the presumption of correctness is removed and the taxpayer is entitled to appropriate relief. Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (Ct. App. 1988).

4. South Carolina Code Ann. Section 12-60-2510(3) (Supp. 1997) provides as follows:

In years when there is a notice of property tax assessment, the property taxpayer must, within thirty days after the assessor mails the property tax assessment notice, give the assessor written notice of objection to one or more of the following: the fair market value, the special use value, the assessment ratio, and the property tax assessment. (Emphasis added.)

5. The Petitioner recognizes that his filing of Bankruptcy did not stay the levy of tax upon his property. However, he contends that the filing of Bankruptcy should have stayed the requirement that he appeal the Assessor's determination of value. The applicable section of the Bankruptcy Code, 11 U.S.C. § 362 (1998), provides that the filing of a bankruptcy petition does not operate as a stay of "the making of an assessment for any tax and issuance of a notice and demand for payment of such an assessment," but that no tax lien resulting from such an assessment will take effect except under special circumstances. 11 U.S.C. § 362(b)(9)(D). However, there is no provision in the Bankruptcy Code for the stay of an appeal of a tax assessment by the debtor, nor is there any provision tolling the statute of limitations for the perfecting of such an appeal. Petitioner's contention, therefore, is without merit.

Based upon the Findings of Fact and Conclusions of Law, it is hereby:

ORDERED that the Respondent's denial of the Petitioner's appeals be affirmed, and that the taxpayer's Petition therefore be dismissed.

Columbia, South Carolina

September 4, 1998