ORDERS:
FINAL ORDER AND DECISION
I. Statement of the Case
This contested case results from a disagreement between Eugene F. Young (Taxpayer) and the Charleston County Assessor
(Assessor) over a refund sought for an alleged overpayment of taxes for tax year 1996. The parties exhausted the prehearing
remedies within the Assessor's office and before the Charleston County Board of Assessment Appeals and now bring this
contested case to the Administrative Law Judge Division (ALJD).
Jurisdiction over this matter is in the ALJD under S.C. Code Ann. § 12-60-2540(A) (Supp. 1998) with this matter having
been heard on November 16, 1999. After considering all of the arguments and evidence presented at the hearing held at the
Edgar Brown Building, Columbia, South Carolina, I conclude that the refund must be denied.
II. Issue
Does the Taxpayer meet the statutory requirements for receiving a refund for an alleged overpayment of property taxes for
the tax year 1996?
III. Analysis
1. Positions of Parties
The Taxpayer asserts that the law in effect for the 1996 tax year provided the 4% legal residence assessment ratio and that
his property should not have been assessed at 6%. Accordingly, the Taxpayer contends that he is entitled to a refund of the
difference between the tax at the 6% assessment ratio and the tax at a 4% assessment ratio.
The Assessor argues that the Taxpayer was not eligible for the 4% legal residence assessment ratio for tax year 1996, and
therefore, he is not entitled to any refund.
2. Findings of Fact
I find by a preponderance of the evidence the following facts:
While the Taxpayer is a resident and citizen of North Carolina, he owns real property in Charleston, South Carolina at 174
Tradd Street. For the tax years 1992 through 1996, Taxpayer had received a 4% assessment ratio on the Tradd Street
property. However, on February 7, 1997, the Assessor notified Taxpayer and the Charleston County Auditor that
Taxpayer's property at 174 Tradd Street in Charleston had been improperly granted a 4% assessment ratio. Rather than 4%,
the notice stated that an assessment ratio of 6% should have been imposed for the tax years of 1992 through 1996. In
compliance with the Assessor's notice, the Auditor issued new tax bills for each of the years based upon a 6% assessment
ratio.
Taxpayer disagreed with the new assessment and proceeded upon a bifurcated route to challenge the Assessor's notice. For
tax years 1992, 1993, 1994, and 1995, Taxpayer pursued a route of appeal through the Assessor, the Charleston County
Board of Assessment Appeals, the Administrative Law Judge Division and ultimately to the circuit court. The matter was
ended at the circuit court by a settlement order dated September 8, 1998.
For tax year 1996, Taxpayer chose a different route to challenge the 6% assessment ratio. On October 29, 1998, Taxpayer
paid under protest an "additional tax" of $1,704.08 for the 1996 tax year (the difference between the County's imposed 6%
rate and Taxpayer's allegedly applicable 4% rate). Once having paid, Young requested a refund of the $1,704.08 on
November 9, 1998.
3. Conclusions of Law
The beginning point of the analysis in this case must be the recognition that this matter is an attempt to obtain a refund of
taxes paid. No authority exists to refund taxes except that authority granted by statute. 84 C.J.S. Taxation § 632 (1954).
The party seeking the refund must satisfy the terms of the statutory language before the refund will be granted. Guaranty
Bank & Trust Co. v. S.C. Tax Comm'n, 254 S.C. 82, 173 S.E.2d 367, 370 (1970) ("A refund of taxes is solely a matter of
governmental or legislative grace and any person seeking such relief must bring himself clearly within the terms of the statute
authorizing the same.").
On October 29, 1998, Taxpayer paid the funds for which he now seeks a refund, and, also in 1998, Taxpayer filed his refund
request. Therefore, the 1998 refund statute applies to the instant case:
Notwithstanding any other provision of law, a taxpayer may apply for a refund of property taxes overpaid because the
property was eligible for the legal residence assessment ratio. The application must be made in accordance with Section 12-60-2560. The taxpayer must establish that the property in question was in fact his legal residence and where he was
domiciled.
S.C. Code Ann. § 12-43-220(c)(3) (Supp. 1998).
Thus, under the plain language of section 12-43-220(c)(3), Taxpayer is allowed to seek a refund if he asserts his "property
was eligible for the legal residence assessment ratio." However, to prove his claim, Taxpayer "must establish that the
property in question was in fact his legal residence and where he was domiciled."
Here, while clearly Taxpayer is allowed to seek a refund since he meets the threshold requirement of asserting he is eligible
for the 4% assessment ratio available for a legal residence, Taxpayer's refund claim must be denied since he fails the
domiciliary requirement. North Carolina, not South Carolina, is Taxpayer's domicile. Thus, Taxpayer does not satisfy the
statute and no refund can be granted since Taxpayer has not brought himself clearly within the terms of the statute
authorizing the refund. Guaranty Bank & Trust Co. v. S.C. Tax Comm'n, 254 S.C. 82, 173 S.E.2d 367, 370 (1970).
Taxpayer attempts to avoid the South Carolina domiciliary requirement by arguing a position premised on two assertions.
First, he asserts the 1998 refund statute is not controlling. Instead, Taxpayer argues that the law in effect for the 1996 tax
year applies. Second, based on the law in effect for the 1996 tax year, Taxpayer asserts that such law imposed no South
Carolina domicile requirement. I cannot agree with Taxpayer on his first assertion and thus do not reach the second. Rather,
I conclude that the law in effect for the 1996 tax year is not controlling since the 1998 refund statute is retroactive and
applicable to the 1996 tax year.
All agree that "[t]he cardinal rule in determining whether a statute will have prospective or retroactive application is that the
intent of the legislature controls." Carolina Power & Light Co. v. Town of Pageland, 321 S.C. 538, 543, 471 S.E.2d 137,
140 (1996). Here, the legislative intent of the 1998 refund statute is one of retroactivity. Two considerations establish that
intent.
First, the retroactive intent can be found in the statutory language itself. See Smith v. South Carolina Retirement System,
336 S.C. 505, 520 S.E.2d 339 (Ct. App. 1999) (where the statutory language itself addressed an intent for the retroactive
treatment of a statute concerning qualifying a domestic relations order). Here, the statute is designed to look backward
since the plain language states that the "taxpayer must establish that the property in question was in fact his legal residence
and where he was domiciled." (Emphasis added). Such language supports a view that the domicile requirement applies
retroactively to all tax years for which the taxpayer seeks to invoke the refund statute.
Second, the retroactive intent is confirmed by the normal presumptions that refund statutes are remedial in nature and
generally held to operate retrospectively. See Merchants Mut. Ins. Co. v. South Carolina Second Injury Fund, 277 S.C.
604, 291 S.E.2d 667 (1982); Hercules, Inc. v. South Carolina Tax Comm'n, 274 S.C. 137, 262 S.E.2d 45 (1980) (statutes
affecting the remedy are generally retrospective). Here, the route chosen by Taxpayer to redress the alleged wrong inflicted
by the 6% ratio is that of a refund under S.C. Code Ann. § 12-43-220(c)(3) (Supp. 1998). Having chosen the 1998 refund
route, the presumption follows that the remedial statute looks backward and is applicable to the 1996 tax year.
In conclusion, Taxpayer has not established that the Tradd Street property was his domicile. Because the refund statute of
S.C. Code Ann. 12-43-220(c)(3) (Supp. 1998) must be applied retroactively and because Taxpayer has failed to bring
himself clearly within the terms of the 1998 refund statute, Taxpayer is not entitled to a refund for taxes paid for the 1996 tax
year.
IV. Order
Based upon the Findings of Fact and Conclusions of Law, it is hereby ordered:
No refund under S.C. Code Ann. § 12-43-220(c)(3) can be granted to Eugene F. Young for the 1996 tax year.
AND IT IS SO ORDERED.
RAY N. STEVENS
Administrative Law Judge
Dated: January 28, 2000
Columbia, South Carolina |
