Duke Power Co. v. South Carolina Tax Com'n

• Decision Date: 20 October 1986
• Docket Number: No. 22701,22701
• Court: South Carolina Supreme Court
• Parties: DUKE POWER COMPANY, Respondent, v. SOUTH CAROLINA TAX COMMISSION, Appellant. . Heard

Page 902

354 S.E.2d 902

292 S.C. 64

DUKE POWER COMPANY, Respondent, v. SOUTH CAROLINA TAX COMMISSION, Appellant.

No. 22701.

Supreme Court of South Carolina.

Heard Oct. 20, 1986.

Decided April 13, 1987.

T. Travis Medlock, Atty. Gen., Joe L. Allen, Jr., Chief Deputy Atty. Gen., Ronald W. Urban, Asst. Atty. Gen., Columbia, for appellant.

William E. Booth, III, Columbia, for respondent.

LITTLEJOHN, Acting Associate Justice:

Respondent Duke Power Company (Duke) brought an action under S.C.Code Ann. § 12-47-440 (1976) for the recovery of corporate license fee taxes paid under protest. The circuit court ordered appellant South Carolina Tax Commission (Commission) to refund $1,143,863 to Duke plus interest and costs. The Commission alleges error. We reverse.

In 1981 Duke sold a portion of an unfinished nuclear power plant known as the Catawba Nuclear Station. The gross receipts attributable to the sale of real property and improvements situated in South Carolina were $295,205,499.

On its 1982 corporate license fee tax return, Duke reported its gross receipts from customer charges for the furnishing of electrical power. Duke did not include the proceeds from the sale of the nuclear station in its tax base for purposes of computing its 1982 corporate license tax liability under S.C.Code Ann. § 12-19-110 (1976). The Commission audited Duke and assessed it an additional license tax including interest of $1,143,863 based on the gross receipts from the sale of the nuclear station. Duke paid the additional assessment. Duke then requested a conference so the Commission could consider Duke's objections to the additional assessment. The Commission held the conference and issued its finding affirming the additional assessment.

On June 14, 1985, Duke filed an application under S.C.Code Ann. § 12-47-440 (1976) for refund of the additional assessment. On August 27, 1985, the Commission notified Duke that its application for refund had been denied in its entirety. Duke brought this action in the circuit court.

The circuit court held that S.C.Code Ann. § 12-19-110 (1976) limited the imposition of license fees to only receipts from customer charges. Accordingly, the court determined that the receipts from the sale of the nuclear facility should not be included in Duke's license tax base.

The Commission appeals submitting in its Brief three issues quoted as follows:

I. The Lower Court Erred In Limiting The Application Of § 12-19-110 Solely To Customer Charges And Thereby Precluding From Taxation The Receipts Derived From The Sale Of The Nuclear Facility.

II. Section 12-19-110, As Applied To The Respondent, Does Not Violate The Equal Protection Clauses Of The South Carolina And United States Constitutions.

III. The Lower Court Erred In Awarding Costs To The Respondent.

The second question is argued by the Commission by reason of Duke's additional sustaining ground. In light of the counterstatement submitted in Duke's Brief and in light of Duke's failure to argue numbers II and III, this Court treats only question I set forth above.

Chapter 19 of Title 12 of the Code of Laws of South Carolina, 1976, imposes an annual license fee upon certain corporations that are organized under South Carolina law or that are qualified to do business in South Carolina. In the instant situation, § 12-19-110 levies the license fee that gives rise to the issue we must decide. The relevant portion of the applicable statute states:

In addition to the license fee provided by § 12-19-100 and any and all other license taxes and fees or taxes of whatever kind, there is hereby levied an annual license fee of three mills upon the entire gross receipts from business within this State during the calendar year next preceding by every ... Power Company....

The above language clearly states that the license fee on power companies, such as Duke, is based on entire gross receipts and not just receipts from customer charges. Where a statute is clear and unambiguous, there is no room for construction and the terms of the statute must be given their literal meaning. Southeastern Fire Ins. Co. v. South Carolina Tax Commission, 253 S.C. 407, 171 S.E.2d 355 (1969) and Green v. Zimmerman, 269 S.C. 535, 238 S.E.2d 323 (1977).

The circuit court erred in construing the statute so as to limit the imposition of the license fee tax to only receipts from customer charges in Duke's regulated business.

The fact that the statute was subsequently amended is of no comfort to Duke. The Commission correctly applied the law applicable at the time of sale.

We hold that the Commission is not required to refund payments made by Duke. The action is hereby dismissed.

REVERSED.

NESS, C.J., and FINNEY, J., concur.

HARWELL, J., dissents.

CHANDLER, J., not participating.

HARWELL, Justice (dissenting):

I respectfully dissent and would affirm the order of the circuit court with one modification.

An electrical utility must pay an annual license fee of one mill on each dollar of the fair market value of its property. S.C.Code...