Sonoco Products v. S.C. Dept. of Revenue
| Decision Date | 09 June 2008 |
| Docket Number | No. 26502.,26502. |
| Citation | 378 S.C. 385,662 S.E.2d 599 |
| Court | South Carolina Supreme Court |
| Parties | SONOCO PRODUCTS COMPANY, Respondent, v. SOUTH CAROLINA DEPARTMENT OF REVENUE, Appellant. |
Ronald W. Urban, Joe S. Dusenbury, Carol I. McMahan, all of South Carolina Department of Revenue, of Columbia, for Appellant.
Frank W. Cureton, of Haynsworth Sinkler Boyd, of Columbia, for Respondent.
In this property tax assessment case, the South Carolina Department of Revenue (the Department) appeals the circuit court's order which reversed the Administrative Law Court's (ALC) order. The circuit court held that Sonoco Products Company's (Sonoco's) office and order fulfillment center buildings are not contiguous to its plant site and, thus, should be assessed at a 6 percent ratio as opposed to a 10.5 percent ratio. This Court certified the case from the Court of Appeals. We reverse the decision of the circuit court.
Sonoco operates a manufacturing facility in Hartsville, South Carolina. At this location, Sonoco owns four buildings which serve as its international headquarters and order fulfillment center. The three corporate headquarters buildings are located across a public road, Novelty Avenue/Woodmill Street, and a railroad track from the majority of the manufacturing plant. Sonoco owns a fee simple interest in the road, which is subject to a public right-of-way for use as a public road in favor of the South Carolina Highway Department. Sonoco also owns the land traversed by the railroad tracks; however, Seaboard Coast Line Railroad has been granted a right-of-way and easement to a portion of the track. The buildings are located between the manufacturing plant and the order fulfillment center. The order fulfillment center, or customer service center, is located across Novelty Avenue, the railroad tracks, and Calhoun Street from the manufacturing plant. There are no intervening landowners between the manufacturing plant and the buildings at issue.
Of the three buildings comprising the corporate headquarters, two of the buildings were built in 1969 and 1978, respectively. The third building was constructed in 1989. The 1969 and 1978 buildings were used in support of the manufacturing facility and, at the time of their construction, were assessed at a 10.5 percent ratio as manufacturing-related property. The 1989 building, the corporate headquarters, was attached to the two other administrative buildings and was also assessed at a 10.5 percent ratio as manufacturing-related property. The order fulfillment center was built in 1997 and was also assessed at a 10.5 percent ratio.1
On July 2, 1997, Sonoco filed a written protest with the Department in which it submitted that the Office Buildings were not contiguous to its plant site because they were separated from the plant site by a public street and, thus, should be assessed at a 6 percent ratio rather than 10.5 percent. In its protest, Sonoco requested a tax refund for the property tax years of 1997 and 1998.
On September 23, 2003, the Department issued its final agency determination. In its report, the Department stated "[t]he sole issue for the [the Department's] determination is whether railroads and public streets destroy contiguity for purposes of S.C.Code Ann. Section 12-43-220 (2000)."2 The Department rejected Sonoco's argument and denied its request for a refund. In reaching this decision, the Department found our applicable state statutes and regulations "indicate that intervening roads, rights-of-way, and railroad tracks do not destroy contiguity." In reviewing these statutes and regulations, the Department believed the Legislature has "repeatedly expressed its reluctance to destroy contiguity when two tracts are separated by a street, railroad track, or other public way." In addition to this statutory support, the Department also relied upon several appellate court decisions to find that Sonoco's "headquarters facility is contiguous to the plant site and should remain assessed for property tax purposes at 10½%."
In response to the Department's decision, Sonoco contested the final agency determination before the ALC. Prior to the hearing, the parties entered into a stipulation of facts. Based on these stipulations and the evidence presented at the hearing, the ALC affirmed the Department's determination and held that "Sonoco's headquarters office buildings and order fulfillment center are contiguous to the plant site and all property taxes computed thereon should be calculated using a 10½ % assessment ratio."
Sonoco appealed the ALC's decision to the circuit court. After hearing oral arguments, the circuit court issued its written order reversing the ALC and holding that Sonoco's office buildings are entitled to a 6 percent assessment ratio. In reaching this decision, the circuit court specifically found that "[w]hen the taxpayer's office building and plant site are separated by a public road, there is a clearly defined, intervening land area with legal boundaries demarcating the two land areas, and the plant site and the office building may be readily distinguished."
The Department appealed the circuit court's order to the Court of Appeals. This Court certified the appeal from the Court of Appeals. The parties stipulate the amount at issue before this Court is a refund of $866,580.44 with interest, plus an additional refund reflecting a 6 percent assessment ratio on the land surrounding the buildings.
The Department raises three issues with multiple subparts; however, we believe the sole issue is whether the circuit court erred in finding Sonoco's office buildings, which are separated from its manufacturing plant by a public road and railroad, are not contiguous to the plant site.
In reaching its decision that the presence of a public road between Sonoco's plant site and office buildings destroyed contiguity, the circuit court found the ALC erred in the following respects: (1) in construing section 12-43-220(a) to mean that a manufacturer's office buildings and its plant site on opposite sides of a public right-of-way are "contiguous" when the manufacturer owns the fee simple interest underlying the public right-of-way; and (2) in interpreting section 12-43-220(a) by ruling that contiguity "jumps" over a public right-of-way.
For several reasons, we find the circuit court's analysis was erroneous and the ALC correctly decided the issue. The ultimate decision in this case is dependent upon the Court's determination of the term "contiguous" within the meaning of section 12-43-220(a).
The cardinal rule of statutory construction is to ascertain and effectuate the intent of the Legislature. Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000). "All rules of statutory construction are subservient to the one that the legislative intent must prevail if it can be reasonably discovered in the language used, and that language must be construed in light of the intended purpose of the statute." Broadhurst v. City of Myrtle Beach Election Comm'n, 342 S.C. 373, 380, 537 S.E.2d 543, 546 (2000). The court should give words their plain and ordinary meaning, without resort to subtle or forced construction to limit or expand the statute's operation. Sloan v. S.C. Bd. of Physical Therapy Exam'rs, 370 S.C. 452, 469, 636 S.E.2d 598, 607 (2006). "We will reject a statutory interpretation when to accept it would lead to a result so plainly absurd that it could not have been intended by the legislature or would defeat the plain legislative intention." Unisun Ins. Co. v. Schmidt, 339 S.C. 362, 368, 529 S.E.2d 280, 283 (2000).
As the parties and the presiding courts recognized, the specific statute at issue, section 12-43-220(a), does not define the term contiguous. Therefore, we have tried to glean an appropriate definition by reviewing secondary sources, our state statutes, and our state appellate decisions which deal with the concept of contiguity.
In terms of secondary sources, "contiguous" commonly means, "being in actual contact: touching along a boundary or at a point; adjacent; next or near in time or sequence." Webster's New Collegiate Dictionary 243 (1981). In the legal field, it has been defined as: "[i]n close proximity; neighboring; adjoining; near in succession; in actual close contact; touching at a point or along a boundary; bounded by or traversed by." Black's Law Dictionary 290 (5th ed.1979).
Although not directly on point, other South Carolina statutes are instructive in determining how the Legislature views this term. Clearly, when the Legislature promulgated section 12-43-220(a) it was aware of the use of the term "contiguous" in other statutory schemes. Thus, we believe a review of these statutes provides guidance in the instant case. See S.C.Code Ann. § 12-43-232(2) (2000) ( ) (emphasis added); see also S.C.Code Ann. § 5-3-305 (2004) ( ...
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