GREAT GAMES v. SC Dept. of Revenue

• Decision Date: 06 March 2000
• Docket Number: No. 25081.,25081.
• Citation: 529 S.E.2d 6,339 S.C. 79
• Parties: GREAT GAMES, INC., owner/licensee, and Busters, Inc., Appellants, v. SOUTH CAROLINA DEPARTMENT OF REVENUE, Respondent.
• Court: South Carolina Supreme Court

339 S.C. 79

529 S.E.2d 6

GREAT GAMES, INC., owner/licensee, and Busters, Inc., Appellants, v. SOUTH CAROLINA DEPARTMENT OF REVENUE, Respondent.

No. 25081.

Supreme Court of South Carolina.

Heard April 7, 1999.

Decided March 6, 2000.

John G. O'Day and Heath P. Taylor, both of Kirkland, Wilson, Moore, Taylor, O'Day & Thomas, P.A., of West Columbia, for appellants.

Harry T. Cooper, Jr. and Nicholas P. Sipe, both of South Carolina Department of Revenue, of Columbia, for respondent.

FINNEY, Chief Justice:

Respondent (Department) sought to impose sanctions upon appellants (Busters) for alleged violations of a video gaming statute¹ and regulation.² The Administrative Law Judge (ALJ) upheld Department's citation, and Busters appealed to circuit court. The circuit court first held it lacked subject matter jurisdiction over the appeal, and alternatively, that the ALJ's order was supported by substantial evidence. Busters now appeals to this Court. We affirm in part and reverse in part.

Busters operated a video machine mall consisting of a common area from which six separate rooms, each containing five machines, were accessible. On the day the Department's officer inspected Busters, all six rooms were lit and all thirty machines were operational. Two employees were present, both sitting at a table in the common area. Busters was cited for violating a regulatory requirement that each video machine "place or premise" have an employee present during business hours.³

As a result of the citation, Department sought to revoke Busters' thirty licenses for this mall, impose a $5,000 fine, and prohibit Busters from obtaining any new video poker licenses for the mall location for six months. The ALJ revoked the thirty licenses, imposed a $1,500 fine⁴, and prohibited the issuance of licenses. Busters was sanctioned pursuant to S.C.Code Ann. § 12-21-2804(F) (Supp.1998) upon a finding it had violated § 12-21-2804(A) and 27 S.C.Reg. 117-190.

Busters appealed to the circuit court, which held that because Busters failed to pay the $1,500 fine or post a bond before appealing as required by S.C.Code Ann. § 12-60-3370 (Supp.1998), it lacked "subject matter jurisdiction"⁵ over Busters' appeal. Alternatively, the circuit court held the ALJ's order was supported by substantial evidence. We agree with Busters that § 12-60-3370 does not apply to this type of case, but affirm the circuit court's substantial evidence holding.

Section 12-60-3370, a part of the "Revenue Procedures Act" (the Act), provides subject to certain exceptions not applicable here, "a taxpayer shall pay, or post a bond for, all taxes, including interest, penalties and other amounts determined to be due by the [ALJ] ... before appealing the decision to the circuit court." The purpose of the Act is set forth in § 12-60-20:

It is the intent of the General Assembly to provide the people of this State with a straightforward procedure to determine any disputed revenue liability. The South Carolina Revenue Procedures Act must be interpreted and construed in accordance with, and in furtherance of, that intent.

The critical issue here is whether the fine imposed by the ALJ pursuant to S.C.Code Ann. § 12-21-2804(F) is a tax within the meaning of the Act. The circuit court held the language of § 12-60-3370 clearly and unambiguously applied to the fine, citing only this language from the statute: "... a taxpayer shall pay or post a bond for, all ... amounts determined to be due by the [ALJ] ... before appealing the decision to circuit court." The circuit court judge's editing of the statute selectively redacted the statute's relevant language, i.e., the restriction of the bond/payment requirement to "all taxes, including interest, penalties and other amounts."

Turning to the Act's definitional section, it provides that "except when the context clearly indicates a different meaning," tax or taxes is defined as:

All taxes, licenses, permits, fees, or other amounts, including interest and penalties, imposed by this title, or subject to assessment or collection by the department, including property subject to collection pursuant to Chapter 18 of Title 27. § 12-60-30(27) (Supp.1998)

Statutes should be construed in light of their intended purposes, and in ascertaining the intent of the legislature, a court should not focus on any single section or provision but should consider the language of the statute as a whole. Mid-State Auto Auction of Lexington Inc. v. Altman, 324 S.C. 65, 476 S.E.2d 690 (1996). Statutes which are part of the same legislative scheme should be read together. Doe v. Brown, 331 S.C. 491, 489 S.E.2d 917 (1997). The Legislature explained its intent in enacting the Revenue Procedures Act: "[T]o provide the people of this State with a straight forward procedure to determine any disputed revenue liability," § 12-60-20, and in promulgating this Act, it expressly repealed all provisions of Title 12 dealing with "tax appeals." See 1995 Act No. 60, § 41. That the Act concerns only tax appeals is clear from of reading of the Act as a whole, and it is also clear that the fine assessed against Busters for violation of video poker regulations is not a tax within the meaning of the Act, see § 12-60-30(27), supra, nor a tax within the ordinary definition of the term. See, e.g., Powell v. Chapman, 260 S.C. 516, 197 S.E.2d 287 (1973)

:

The essential characteristics of a tax are that it is not a voluntary payment or donation, but an enforced contribution, enacted pursuant to legislative authority, in the exercise of the taxing power, the contribution being of a proportional character, payable in money, and imposed, levied, and collected for the purpose of raising revenue, to be used for public or governmental purposes. 84 C.J.S. Taxation s 1, at page 32. The question of whether a particular contribution, charge, or burden is to be regarded as a tax depends on its real nature and not on its designation.

We reverse the circuit court's holding that § 12-60-3370 applies to a fine imposed pursuant to § 12-21-2804(F).

Before the ALJ, Busters challenged the constitutionality of Reg. 117-190, and the ALJ purported to rule on these issues. We take this opportunity to remind the bench and bar that ALJs are an agency of the executive branch of government⁶, and must follow the law as written until its constitutionally is judicially determined; ALJs have no authority to pass upon the constitutionality of a statute or regulation. See, e.g., Beaufort County Bd. of Educ. v. Lighthouse Charter School C'tee, 335 S.C. 230, 516 S.E.2d 655...