Long Cove Home Owners' Ass'n, Inc. v. Beaufort County Tax Equalization Bd., No. 24656

CourtUnited States State Supreme Court of South Carolina
Writing for the CourtBURNETT; FINNEY, C.J., TOAL and WALLER, JJ., and JOHN W. KITTREDGE
Citation327 S.C. 135,488 S.E.2d 857
PartiesLONG COVE HOME OWNERS' ASSOCIATION, INC., Wexford Plantation Home Owners' Association, Inc., Port Royal Plantation Homeowners' Association, Inc., Moss Creek Owners' Association, Inc., and Hilton Head Plantation Property Owners' Association, Inc., Appellants, v. BEAUFORT COUNTY TAX EQUALIZATION BOARD (a/k/a Beaufort County Board of Assessment), and South Carolina Department of Revenue and Taxation, Respondents. . Heard
Decision Date07 January 1997
Docket NumberNo. 24656

Page 857

488 S.E.2d 857
327 S.C. 135
LONG COVE HOME OWNERS' ASSOCIATION, INC., Wexford Plantation
Home Owners' Association, Inc., Port Royal Plantation
Homeowners' Association, Inc., Moss Creek Owners'
Association, Inc., and Hilton Head Plantation Property
Owners' Association, Inc., Appellants,
v.
BEAUFORT COUNTY TAX EQUALIZATION BOARD (a/k/a Beaufort
County Board of Assessment), and South Carolina
Department of Revenue and Taxation, Respondents.
No. 24656.
Supreme Court of South Carolina.
Heard Jan. 7, 1997.
Decided July 28, 1997.

Page 858

[327 S.C. 137] A. Camden Lewis, of Lewis Babcock & Hawkins, LLP, Columbia, for appellants.

Ladson F. Howell and Stephen P. Hughes, both of Howell, Gibson & Hughes, Beaufort, for Respondent Beaufort County.

General Counsel Harry Cooper, Chief Counsel for Revenue Litigation Ronald W. Urban, and Counsel for Revenue Litigation Jeffery M. Nelson, Columbia, for Respondent S.C. Department of Revenue and Taxation.

BURNETT, Justice.

Appellants seek review of the decision of the circuit court affirming the South Carolina Department of Revenue and Taxation's (Department's)

Page 859

decision upholding the separate taxation of the common areas within planned unit developments. We reverse.
FACTS

Taxpayers in this matter are the Wexford Plantation Home Owners' Association, Port Royal Plantation Homeowners' Association, Long Cove Home Owners' Association, Moss Creek Owners' Association and Hilton Head Plantation Property Owners' Association (hereinafter owners' associations).

The properties in question are located in planned unit developments (PUDs) located on Hilton Head Island. The real property varies in character and the parcels include wooded areas, lagoons, open areas, roadways, buildings for maintenance and administrative purposes, golf courses and club houses. These parcels are the common properties of the PUDs and are deeded to the owners' associations which are not-for-profit corporate entities whose members are the residential lot owners of the PUDs. Use of these common areas is restricted to the homeowners and their invited guests. The lots of the individual homeowners in these PUDs are deeded subject to recorded declarations of covenants, conditions and [327 S.C. 138] restrictions, and each homeowner is granted an undivided interest in the common areas, which runs with the land.

Until 1991, the common properties were assessed at a $0.00 or nominal tax value. According to the deposition of Mr. Gay, a former Beaufort County tax assessor, the value of the common areas was reflected in the value placed on the residential lots within the PUDs and thus the common areas were not separately taxed. However, in 1991, the Beaufort County Tax Assessor reassessed some golf courses, club houses and other similar facilities, assigning to them a value many times greater than that of prior years. In 1993, the Tax Assessor assessed all the other common properties with substantial increases in value. On June 6, 1993, the Assessor prepared a valuation chart to assist the staff appraisers in the valuation of common areas. The staff appraisers were ordered to value all common properties at a set rate based on the acreage of the parcel. As a result of this reassessment, the property tax obligation of the owners' associations increased.

The owners' associations appealed all common areas tax assessments to the Beaufort County Tax Equalization Board (Board). Because the legal issues were the same, the owners' associations consolidated their appeals of the assessments before the Board. The Board heard arguments from the owners' associations and Beaufort County on July 6, 1994. By agreement, the parties limited the arguments to the legal question of whether the Tax Assessor could separately tax the common areas. The specific values of the properties were not discussed or decided. The Board issued a written decision on August 24, 1994. Because it felt compelled to follow prior South Carolina Tax Commission decisions, the Board held the property was taxable and had value separate from the owners' lots.

Appellants appealed the Board's decision to the Department. On January 25, 1995, the Department issued its order holding the common areas have value and are taxable; voluntary restrictions are not considered when valuing these properties; the valuation method used by the Assessor was proper; and the Department had the authority to order the spot reassessment. The Department's decision was affirmed by the circuit court. [327 S.C. 139] ISSUES

I. Did the Beaufort County Tax Assessor have the legal authority or power to conduct the reassessment of the common areas?

II. When assessing the value of these common properties, should the restrictions on their uses be considered?

III. Was the valuation method used by the Tax Assessor's office arbitrary and contrary to the law of South Carolina?

IV. Is an imposition of property tax on the common areas double taxation and, therefore, contrary to the South Carolina Constitution?

Page 860

DISCUSSION

Standard of Review

The South Carolina Administrative Procedures Act (APA) controls the standard of review of this case. Under the APA, the Supreme Court may not substitute its judgment for that of a state agency as to the weight of the evidence on questions of fact. S.C.Code Ann. § 1-23-380(5) (Supp.1995). The Supreme Court may reverse or modify an agency decision which is clearly erroneous in view of the substantial evidence on the whole record; which is in violation of a constitutional or statutory provision; or which is arbitrary. S.C.Code Ann. § 1-23-380(6) (Supp.1995). Substantial evidence is evidence which would allow reasonable minds to reach the conclusion the administrative agency reached. Carroll v. Gaddy, 295 S.C. 426, 368 S.E.2d 909 (1988). The Department is the fact-finder for purposes of judicial review. Lindsey v. S.C. Tax Commission, 302 S.C. 504, 397 S.E.2d 95 (1990).

I.

The owners' associations...

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5 practice notes
  • Bursey v. DEPT. OF HEALTH AND ENV., No. 3813.
    • United States
    • Court of Appeals of South Carolina
    • 1 Junio 2004
    ...of fact." S.C.Code Ann. § 1-23-380(A)(6) (Supp.2003); Long Cove Home Owners' Ass'n, Inc. v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 488 S.E.2d 857 (1997). A reviewing court may reverse or modify a decision of an agency if the findings, inferences, conclusions or decisions o......
  • Cfre Llc v. Greenville County Assessor, No. 27032.
    • United States
    • United States State Supreme Court of South Carolina
    • 29 Agosto 2011
    ...Administrative Procedures Act (APA). [716 S.E.2d 881] [395 S.C. 74] Long Cove Home Owners' Ass'n v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 139, 488 S.E.2d 857, 860 (1997). Accordingly, we review the decision of the ALC for errors of law. S.C.Code Ann. § 1–23–380(5)(d) (Supp.201......
  • In re Mayfair Mills, Inc., No. C/A 01-08491-W.
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • 27 Noviembre 2002
    ...assessed value that reflects the property's market value. See Long Cove Home Owners' Assoc., Inc. v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 488 S.E.2d 857, 861 (1997); Lindsey v. S. Carolina Tax Comm'n, 302 S.C. 504, 397 S.E.2d 95, 97 (1990); see also Reliance Ins. Co. v. Smith......
  • MARIETTA GARAGE v. Dept. of Public Safety, No. 3044.
    • United States
    • Court of Appeals of South Carolina
    • 7 Septiembre 1999
    ...state agency as to the weight of the evidence on questions of fact. Long Cove Home Owners' Assoc. v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 139, 488 S.E.2d 857, 860 (1997); S.C.Code Ann. § 1-23-380(A)(6) (Supp.1998). However, we may reverse or modify an agency decision which is......
  • Request a trial to view additional results
5 cases
  • Bursey v. DEPT. OF HEALTH AND ENV., No. 3813.
    • United States
    • Court of Appeals of South Carolina
    • 1 Junio 2004
    ...of fact." S.C.Code Ann. § 1-23-380(A)(6) (Supp.2003); Long Cove Home Owners' Ass'n, Inc. v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 488 S.E.2d 857 (1997). A reviewing court may reverse or modify a decision of an agency if the findings, inferences, conclusions or decisions o......
  • Cfre Llc v. Greenville County Assessor, No. 27032.
    • United States
    • United States State Supreme Court of South Carolina
    • 29 Agosto 2011
    ...Administrative Procedures Act (APA). [716 S.E.2d 881] [395 S.C. 74] Long Cove Home Owners' Ass'n v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 139, 488 S.E.2d 857, 860 (1997). Accordingly, we review the decision of the ALC for errors of law. S.C.Code Ann. § 1–23–380(5)(d) (Supp.201......
  • In re Mayfair Mills, Inc., No. C/A 01-08491-W.
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • 27 Noviembre 2002
    ...assessed value that reflects the property's market value. See Long Cove Home Owners' Assoc., Inc. v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 488 S.E.2d 857, 861 (1997); Lindsey v. S. Carolina Tax Comm'n, 302 S.C. 504, 397 S.E.2d 95, 97 (1990); see also Reliance Ins. Co. v. Smith......
  • MARIETTA GARAGE v. Dept. of Public Safety, No. 3044.
    • United States
    • Court of Appeals of South Carolina
    • 7 Septiembre 1999
    ...state agency as to the weight of the evidence on questions of fact. Long Cove Home Owners' Assoc. v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 139, 488 S.E.2d 857, 860 (1997); S.C.Code Ann. § 1-23-380(A)(6) (Supp.1998). However, we may reverse or modify an agency decision which is......
  • Request a trial to view additional results

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