ORDERS:
ORDER
This matter is before the Administrative Law Judge Division (Division) pursuant to the motion of the Respondents, Dorchester
County Assessor and Dorchester County Auditor, to dismiss this case on the grounds that the Division lacks subject matter
jurisdiction over the issues presented. A hearing on the motion was held on April 14, 1999, at the offices of the Division in
Columbia, South Carolina. For the following reasons, I conclude that the Division has subject matter jurisdiction to hear this case.
Therefore, the Motion to Dismiss must be denied.
STATEMENT OF THE CASE
This case involves the Petitioner's claim for a refund of interest paid by the Petitioner to redeem real property sold at a delinquent
tax sale. The property in question is located on Old Trolley Road in Summerville, Dorchester County, South Carolina, and is
designated as TMS # 153-00-00-041. The owners of the property are Edgar A. Buck and Margaret B. Buck. The Petitioner
leased the property from the Bucks for use as a business.
The property was sold at a delinquent tax sale on November 3, 1997, for payment of the 1996 property taxes in the amount of
$4,728.98. The successful bidder at the tax sale paid $153,000.00 for the property. Thereafter, the Petitioner redeemed the
property on or about December 23, 1997, by paying the 1996 taxes of $4,728.98, along with one year's interest in the amount of
$12,240.00, based upon a calculation of 8% of the amount of the successful bid on the property, pursuant to S.C. Code Ann. §
12-51-90 (Supp. 1998). Petitioner paid the interest under protest, asserting that the interest should be computed on a per diem
basis rather than by calculating one whole year of interest at the rate of 8%. In consideration of the Petitioner's redemption of the
property, the Bucks assigned their cause of action for the return of any excess funds paid to redeem the property to the Petitioner.
Petitioner then filed a claim for a refund of alleged excess interest paid on the redemption of the property from the Dorchester
County Auditor, Assessor, and Treasurer, citing S.C. Code Ann. § 12-60-2560 (Supp. 1998) as authority for its claim. That claim
was denied pursuant to a letter from the Dorchester County Attorney. The Petitioner then appealed to the Dorchester County
Board of Assessment Appeals, which also denied the claim. Thereafter, Petitioner filed its request for a contested case hearing
before the Administrative Law Judge Division.
The Respondents filed a Motion to Dismiss this case on the grounds that the Administrative Law Judge Division does not have
subject matter jurisdiction to hear matters in which a taxpayer is seeking a refund of interest paid on the redemption of property
sold at a delinquent tax sale. Respondents assert that the procedure set forth in S.C. Code Ann. § 12-60-2560 is not the proper
procedure by which to seek such a refund and that the interest paid is not a "disputed revenue liability" within the meaning of the
South Carolina Revenue Procedures Act; that the proper procedure for seeking a refund of the interest is a declaratory judgment
action; and that the Administrative Law Judge Division does not have jurisdiction to hear a declaratory judgment action.
DISCUSSION
S.C. Code Ann. §§ 12-51-40 et seq. (Supp. 1998) provide a procedure for the collection of delinquent property taxes owed to a
county. The procedure includes the sale of the property on which taxes are owed at a delinquent tax sale conducted by the county.
If the property is sold at the tax sale, the defaulting taxpayer has twelve months from the date of the delinquent tax sale in which to
redeem the property. The redemption is accomplished "by paying to the person officially charged with the collection of delinquent
taxes, assessments, penalties, and costs, together with eight percent interest on the whole amount of the delinquent tax sale bid."
S.C. Code Ann. § 12-51-90 (Supp. 1998). The rate of interest is increased to twelve percent if the redemption is made in the last
six months of the redemption period. Id. In the event of redemption, the purchaser of the property at the delinquent tax sale is
refunded the purchase price, plus the "interest provided in Section 12-51-90." S.C. Code Ann. § 12-51-100 (Supp. 1998). In this
case, the Petitioner claims that the county erroneously computed the interest imposed pursuant to Section 12-51-90, and has
requested a refund of the alleged excess interest. The question presented is whether the Administrative Law Judge Division has
jurisdiction to hear the Petitioner's claim.
If the Division has subject matter jurisdiction to hear this action, that jurisdiction must be derived from the South Carolina Revenue
Procedures Act, S.C. Code Ann. §§ 12-60-10 et seq. (Supp. 1998). The Petitioner argues that S.C. Code Ann. § 12-60-2560
(Supp. 1998) provides the mechanism by which the Division is authorized to hear this case. That section provides in pertinent part:
[A] property taxpayer may seek a refund of real property taxes assessed by the county assessor and paid, other than taxes paid on
property the taxpayer claims is exempt, by filing a claim for refund with the county assessor who made the property tax assessment
for the property for which the tax refund is sought.
The assessor, upon receipt of a claim for refund, shall immediately notify the county treasurer and the county auditor for the county
from which the refund is sought. The majority of these three officials shall determine the taxpayer's liability, if any, and shall notify
the taxpayer in writing of their decision.
Within thirty days after the decision is mailed to the taxpayer on the claim for refund, a property taxpayer may appeal the decision
to the county board of assessment appeals. . . .
Within thirty days after the board's decision is mailed to the taxpayer, a property taxpayer or county assessor may appeal the
decision issued by the board by requesting a contested case hearing before the Administrative Law Judge Division. . . .
The Respondents argue that the term "real property taxes" in the first sentence of this section applies only to claims for refund of
property taxes assessed by the County Assessor and does not provide for a claim for a refund of interest paid to redeem property
sold at a delinquent tax sale. However, the cardinal rule of statutory construction is that the court is to ascertain and effectuate the
actual intent of the legislature. In ascertaining this intent, statutes which are part of the same act must be construed together and
each one given effect, if it can be done by any reasonable construction. Burns v. State Farm Mut. Auto. Ins. Co., 297 S.C. 520,
377 S.E.2d 569 (1989); Higgins v. State, 307 S.C. 446, 415 S.E.2d 799 (1992). Therefore, Section 12-60-2560 must not be
read in isolation, but must be considered in conjunction with the entire Revenue Procedures Act. The manifest intent of the General
Assembly in enacting the Revenue Procedures Act was "to provide the people of this State with a straightforward procedure to
determine any disputed revenue liability.(1) The South Carolina Revenue Procedures Act must be interpreted and construed in
accordance with, and in furtherance of, that intent." S.C. Code Ann. § 12-60-20 (Supp. 1998). Moreover, S.C. Code Ann. §
12-60-80 (Supp. 1998) provides that "[t]here is no other remedy other than those provided in this chapter in any case involving the
illegal or wrongful collection of taxes, or attempt to collect taxes." (Emphasis added). Pursuant to S.C. Code Ann. § 12-60-30(27)
(Supp. 1998), "taxes" is defined as "all taxes, licenses, permits, fees, or other amounts, including interest and penalties, imposed by
this title. . . ." (Emphasis added). The interest imposed when a property is redeemed from a delinquent tax sale is pursuant to
Section 12-51-90 and therefore is "interest. . . imposed by this title [Title 12]." Accordingly, the sole remedy for the wrongful
collection of such interest must be found within the Revenue Procedures Act. To conclude otherwise, as the Respondents urge,
would contradict the manifest intent of the General Assembly as expressed in the aforementioned statutes.
As previously mentioned, the Revenue Procedures Act provides a procedure in S.C. Code Ann. § 12-60-2560 for refunds of "real property taxes."
Pursuant to this section, an aggrieved taxpayer must first file a claim for refund with the county assessor. The assessor immediately notifies the
county treasurer and auditor of the claim, and the majority of those three officers determines whether a refund shall be issued. Further review of
refund claims is made by the county board of assessment appeals. Thereafter, a taxpayer or assessor may appeal the board's decision by requesting
a contested case hearing before the Division. § 12-60-2560(C). In light of the intent of the General Assembly in enacting the Revenue Procedures act
as expressed in the statutes discussed previously, as well as the statutory definition of "taxes" expressed in Section 12-60-30(27), which applies
throughout the Revenue Procedures Act and which includes the interest complained of here, I conclude that the term "real property taxes"
contained in Section 12-60-2560(A) must necessarily include interest erroneously assessed pursuant to Section 12-51-90. Therefore, since a taxpayer
may seek a refund of such interest pursuant to Section 12-60-2560, the Administrative Law Judge Division has jurisdiction to conduct contested
case hearings to review decisions of county officials concerning those refunds. Having found that the Revenue Procedures Act grants the Division
jurisdiction to hear this case, I decline to consider Respondents' arguments concerning the Division's jurisdiction to hear actions for declaratory
judgment.
ORDER
For all the foregoing reasons, the Respondents' Motion to Dismiss is hereby denied.
AND IT IS SO ORDERED.
___________________________________
Ralph King Anderson, III
Administrative Law Judge
July 29, 1999
Columbia, South Carolina
1. The Respondents argue that a claim for refund of interest paid to redeem property sold at a delinquent tax sale is not a "disputed revenue
liability" within the meaning of this section. I disagree. Although the interest paid pursuant to Section 12-51-90 is eventually remitted to the
successful bidder at the tax sale rather than to the county itself, the payment of interest is an integral part of the statutory mechanism by which a
county collects delinquent property taxes. A delinquent taxpayer cannot redeem his property without paying both the delinquent taxes and the
interest imposed by Section 12-51-90. The two are inextricably intertwined. I thus conclude that a claim for a refund of interest imposed pursuant to
Section 12-51-90 is a "disputed revenue liability" for purposes of Section 12-60-20. |
