SC Administrative Law Court Decisions

This matter came before me pursuant to S.C. Code Ann. § 12-60-2940 (2000) for a contested case hearing requested by the Petitioner against the Lancaster County Auditor (Auditor), seeking a pro rata refund of property taxes paid on a 2002 Ford Explorer. A hearing was held before me at the offices of the Administrative Law Judge Division (Division) in Columbia, South Carolina on December 6, 2001.

Having carefully considered all testimony, exhibits and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following findings of fact by a preponderance of evidence:

1. This Division has procedural and subject matter jurisdiction over this case.

2. The parties have exhausted their prehearing remedies. Furthermore, notice of the date, time, place and nature of the hearing was timely given to all parties.

3. The Petitioner purchased a 2002 Ford Explorer XLT in June 2001 for $28,380.00. After the Petitioner applied for new tags on July 6, 2001, the Auditor valued his vehicle at $27,780.00. The Auditor's valuation was based upon a new car cost guide provided by the South Carolina Department of Revenue (Department).

The Petitioner contends that the Auditor's valuation of his vehicle is improperly based upon a new car value. He argues that once he purchased the vehicle, it was worth less than a new car sold from a dealership and that the Auditor must factor that consideration into the valuation of his vehicle. The Petitioner also contends that the cost guide is flawed because it originates from another area of the country. He proposed a valuation of $21,000.00. The Petitioner supported that valuation based upon three appraisals. The Petitioner submitted an appraisal of $21,000.00 from Young Ford. However, that appraisal was not based on the fair market value of his vehicle but rather the wholesale price of a "program vehicle." The Petitioner also testified that he was informed that State Farm Insurance Company would pay him $23,000.00 if his car was totaled. Finally, the Petitioner testified that he called a Ford dealership in Cheraw, South Carolina, and was informed that his SUV was worth approximately $23,900.00.

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

1. S.C. Code Ann. § 1-23-600 (1986 & Supp.2000) grants jurisdiction to the Division to hear contested cases under the Administrative Procedures Act. S.C. Code Ann. §§12-60-2540(A) (2000) and 12-60-2920 (2000) authorize the South Carolina Administrative Law Judge Division to conduct contested case hearings concerning property tax assessment decisions made by the county boards of assessment.

2. S.C. Code Ann. § 12-37-210 (2000) defines property which is taxable in South Carolina as follows:

All real and personal property in this State, personal property of residents of this State which may be kept or used temporarily out of the State, with the intention of bringing it into the State, or which has been sent out of the State for sale and not yet sold, and all moneys, credits and investments in bonds, stocks, joint-stock companies or otherwise of persons resident in this State shall be subject to taxation.

3. An assessor's valuation of property is presumed correct. 84 C.J.S. Taxation § 410 (1954). Therefore, a taxpayer contesting an assessment has the burden of showing the taxing authority's valuation is incorrect. While the taxpayer ordinarily would meet this burden by proving the actual value of the property, the taxpayer may show by other evidence that the valuation is incorrect. If the taxpayer proves the valuation is incorrect, the presumption of correctness is revoked and the taxpayer is entitled to appropriate relief. Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (Ct. App. 1988).

4. Pursuant to S.C. Code Ann. § 12-39-340 (2000), the county auditor is responsible for "ascertaining that all personal property subject to the ad valorem tax by the Constitution or general law is listed and assessed according to manuals, guidelines and rules and regulations promulgated by the department." Furthermore, S.C. Code Ann. § 12-39-350 (2000) provides that the county auditor "shall adopt valuations of the assessor and the department."

5. S.C. Code Ann. § 12-37-930 (2000) provides that:

All property must be valued for taxation at its true value in money which in all cases is the price which 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 of the uses and purposes for which it is adapted and for which it is capable of being used. The fair market value for . . . must be based on values derived from a nationally recognized publication of vehicle valuations. . . .

The Department is required to publish guides or manuals setting forth the assessed value of vehicles and to provide those guides to county auditors. S.C. Code Ann. §12-37-2680 (2000) provides that:

The assessed values must be published in guides or manuals by the South Carolina Department of Revenue and provided to the auditor of each county as often as may be necessary to provide for current values. When the value of any vehicle is not set forth in the guide or manual the auditor shall determine the value from other available information.

27 S.C. Code Ann. Regs. 117-119 (1976) further provides that "[t]he assessment guides must be used exactly as furnished, except in unusual and extenuating circumstances. . . ."

Here, the Department provided a new car cost guide to the Lancaster County Auditor. Though the guide was not published in a manual prepared by the Department, it was nonetheless "furnished" by the Department "to provide for current values" of vehicles in South Carolina. I therefore find that the guide complies with Section 12-37-2680. Furthermore, the circumstances of this case are not "unusual and extenuating." Accordingly, departing from the assessment guide provided by the Department would be improper.

6. The Administrative Law Judge, as fact-finder, bases his decision on the on the evidence presented at the contested case hearing. See Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E. 2d 633 (1991).

7. " 'Hearsay' is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." Rule 801(c),

SCRE. The testimony of the Petitioner concerning the value given in all of his appraisals was hearsay for which he lacks personal knowledge. However, no party objected to this evidence. Therefore, it is competent evidence. See Toyota of Florence, Inc. v. Lynch, 314 S.C. 257, 442 S.E.2d 611 (1994). Nevertheless, when hearsay evidence is admitted, its "probative force" is a matter for the fact-finder to decide. State v. White, 215 S.C. 450, 55 S.E.2d 785 (1949). Moreover, the South Carolina Supreme Court held in Richards v. City of Columbia, 227 S.C. 538, 88 S.E.2d 683 (1955) (quoting 42 Am. Jur. 652, Public Administrative Law, § 218) that:

Most authorities agree that there must be some evidence which is competent and legal, as tested by the usual rules for producing evidence in any legal proceeding, to sustain the findings. If founded only on hearsay or other improper evidence, the decision will not be sustained, even though the statute authorizing judicial review may provide that findings of fact by a board acting within its powers shall in the absence of fraud be conclusive, or that rules of evidence prevailing in courts of law or equity shall not be controlling in an administrative proceeding.

Here, the Petitioner's case was based entirely on hearsay evidence. Since the testimony presented by the Petitioner lacks the corroboration of an oath or affirmation and has no natural tendency to induce belief, I do not find it to be persuasive.

Based upon the above Findings of Fact and Conclusions of Law:

IT IS HEREBY ORDERED that the Lancaster County Auditor shall value the property identified as a 2002 Ford Explorer XLT owned by Kevin O. Anderson at a value of $27,780.00 for the 2001 tax year.

AND IT IS SO ORDERED.

Ralph King Anderson, III

Administrative Law Judge

March 1, 2002

Columbia, South Carolina