ORDERS:
FINAL ORDER AND DECISION
I. Statement of the Case
This contested case results from a disagreement between Albert Santoni (taxpayer or Santoni) and the
Beaufort County Assessor (Assessor) over the value of property owned by the taxpayer for the tax years
1998 and 1999. The parties exhausted the prehearing remedies within the assessor's office and before the
Beaufort County Board of Assessment Appeals and now bring this contested case to the Administrative Law
Judge Division (ALJD). Jurisdiction is in the ALJD under S. C. Code Ann. § 12-60-2540(A) (Supp. 1998)
with this matter having been heard on March 9, 2000 at the hearing held at the Edgar Brown Building,
Columbia, South Carolina. After considering all of the arguments and evidence presented, the property must
be valued at $27,630.
II. Issues
What is the value of the taxpayer's property located at 503 Tarpon Boulevard, Fripp Island, South Carolina,
for tax years 1998 and 1999?
III. Analysis
Valuation
1. Positions of Parties:
The taxpayer asserts his land at 503 Tarpon Boulevard, Fripp Island, South Carolina, should be valued at
$8,700, the price he paid to acquire the property in 1996. He argues that no appreciation has occurred after
that date since the property has an erosion problem offsetting any alleged increase in value from 1996 until
the years here in dispute of 1998 and 1999. Finally, while he admits that a driveway and parking surface on
his lot adds a value of $2,200, he argues that the addition of a dock in June 1996 does not add a value of
$16,730 to his property. Rather, he argues that no value is added since the dock is constructed on public
land owned by the State of South Carolina. Accordingly, the taxpayer asserts a value of $10,900 is proper.
The Assessor argues that the land alone has a value of $10,000 and to that value must be added the value of
the improvements made since the 1996 purchase. The Assessor argues the improvements consist of
constructing a deck and parking surface valued at $3,570 and a dock valued at $16,730. Thus, the value
presented by the Assessor is $30,300.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
Santoni purchased a lot at 503 Tarpon Boulevard, Fripp Island, South Carolina, in 1996 for $8,700. At the
time of purchase, Santoni was aware that a prior owner of the lot had requested a septic tank permit from
the South Carolina Department of Health and Environmental Control and that the permit request had been
denied. Thus, the lot at the time of purchase in 1996 and at the time of valuation in 1998 and 1999 was not
suitable then and is not today suitable for the construction of a dwelling.
While no dwelling can be constructed, other improvements can. In May 1996, Santoni added a driveway and
a deck at a cost of $2,200. Further, in June 1996, Santoni chose to use the lot for recreational purposes by
construction that gave him access to the marsh and waterway of Fripp Canal. Permission to cross the marsh
and locate a dock on the canal was obtained by a permit granted by the South Carolina Department of Health
and Environmental Control, Office of Ocean and Coastal Resource Management. Upon obtaining the
permit, Santoni constructed a 4' x 580' walkway leading to a 10' x 14' fixed pierhead with the pierhead
having a 3' x 24' ramp leading to a 10' x 14' floating dock. The Assessor valued these improvements on a
cost approach at $16,730.
For the tax years 1998 and 1999, the Assessor valued the improvements as part of the lot and seeks now to
impose a value of $30,300. Santoni opposes the value and argues that a value of $10,900 is proper ($8,700
land purchase plus $2,200 cost of deck and driveway).
3. Conclusions of Law
Based on the foregoing Findings of Fact, I conclude the following as a matter of law:
a. General Law of Valuation
All property must be valued for taxation purposes at its true value in money. S.C. Code Ann. §12-37-930
(Supp. 1998). The true value in money is the price the property would bring following reasonable exposure
to the market where both the seller and the buyer are willing, are not acting under compulsion, and are
reasonably well informed as to the uses and purposes for which the property is adapted and for which the
property is capable of being used. Id. Accordingly, the statute's reliance upon market exposure supports the
conclusion that a property's true value for taxation purposes is found by determining the property's fair
market value. Lindsey v. S.C. Tax Comm'n, 302 S.C. 504, 397 S.E.2d 95 (1990).
While fair market value may be determined in a number of ways, the cost approach is acceptable for property
that has been both recently acquired and recently improved. See Reliance Ins. Co. v. Smith, 327 S.C. 528,
489 S.E.2d 674 (Ct. App. 1997). Applying the cost approach requires adding two determinations: the value
of the land based on sales data and the cost of the improvements reduced by depreciation. 84 C.J.S.
Taxation § 411 (1954).
b. Application of Cost Approach to Facts
Here, under the evidence presented, Santoni properly established the value of his land by relying on the sales
price of $8,700, the price he paid for the land in 1996. See Belk Department Stores v. Taylor, 259 S.C.
174, 191 S.E. 2d 144 (1972) (the purchase price of property is evidence of the value of that property).
Given the erosion present in this case, no persuasive evidence establishes a value greater than the $8,700
purchase price.
The second determination is the cost of the construction. The evidence from the taxpayer is that his cost of
construction of the deck and driveway is $2,200. Further, the taxpayer agreed a construction cost of the
facilities to access the waterway would carry a cost value of $16,730. No evidence was presented by either
party on depreciation of the improvements and thus, in the absence of any offsetting factor, the value of the
taxpayer's improvements is $18,930. Therefore, the land value with improvements gives a fair market value
of the property of $27,630.
c. Lack of Reduction Due To Public Property
Santoni argues the $16,730 as the value of the facilities to access the waterway cannot form a part of the
value of his property since the construction is on public property. I cannot agree. I recognize that Santoni's
construction crosses the marsh and accesses a waterway with both the marsh and waterway forming a part of
the public lands owned by the State and held in trust for the people of the State. Hobonny Club, Inc. v.
McEachern, 272 S.C. 392, 252 S.E.2d 133 (1979); State v. Hardee, 259 S.C. 535, 193 S.E.2d 497 (1972).
However, no exemption removes Santoni's private property from taxation merely because the structure
crosses and accesses public property.
Under South Carolina taxation, the owner of the real property is the party liable for the tax generated by that
property. S.C. Code Ann. § 12-37-610 (Supp. 1998). Further, all real property located in this State is
subject to ad valorem taxation unless exempted. S.C. Code Ann. § 12-37-210 (1976). Thus, if Santoni owns
the real property in question, he has the duty of finding an exemption to relieve him of the tax resulting from
his ownership. While not expressely stated, Santoni attempts to meet this duty by implying that the
structures accessing the Fripp Canal are not taxable to him since the property is owned by the public domain
and public domain property is exempt. I disagree.
Admittedly, Santoni is correct that real property owned by the State is normally exempt in that State owned
property used exclusively for a public purpose is not taxable. S.C. Code Ann. § 12-37-220(A)(1) (Supp.
1998). However, such an exemption does not apply to Santoni.
Here, the property under review is private property owned by Santoni. Santoni paid for the construction of
all of the improvements and is the undisputed owner of the lot and its improvements. Rather, to establish a
lack of ownership in the access structures and to establish an ownership in the State, Santoni has the duty to
show that he has dedicated the access structures to the public and must prove that dedication by proof that is
strict, cogent, and convincing. Tupper v. Dorchester County, 326 S.C. 318, 487 S.E.2d 187 (1997).
Indeed, Santoni must express in a positive and an unmistakable manner his intention to dedicate his property
to public use, and that intention must be followed, within a reasonable time, by an express or implied public
acceptance of the property offered for dedication. Helsel v. City of North Myrtle Beach, 307 S.C. 24, 413
S.E.2d 821 (1992). No such intention to dedicate is shown in this case and no acceptance by the public has
been established. Accordingly, Santoni owns the access structures, those structures are not exempt from
taxation, and those structures add taxable value to his property.
IV. Order
Based upon the Findings of Fact and Conclusions of Law, it is hereby ordered:
The value of the taxpayer's property located at 503 Tarpon Boulevard, Fripp Island, South Carolina, for tax
years 1998 and 1999 is $27,630.
AND IT IS SO ORDERED.
____________________________
RAY N. STEVENS
Administrative Law Judge
Dated: March 23, 2000
Columbia, South Carolina |
