Westvaco Corp. v. South Carolina Dept. of Revenue
| Decision Date | 22 March 1995 |
| Docket Number | No. 24341,24341 |
| Citation | 321 S.C. 59,467 S.E.2d 739 |
| Court | South Carolina Supreme Court |
| Parties | WESTVACO CORPORATION, Appellant, v. SOUTH CAROLINA DEPARTMENT OF REVENUE (f/k/a South Carolina Tax Commission); The City of North Charleston; Harley Henderson, The Finance Director for The City of North Charleston; and W.O. Thomas, County Treasurer, Charleston County, and The City of Charleston, Respondents. . Heard |
Elizabeth T. Thomas, of Warren & Sinkler, Charleston, and Walter Hellerstein, of Morrison & Foerster, New York City, for Appellant.
Chief Deputy Attorney General Ray N. Stevens and Deputy Attorney General Ronald W. Urban, Columbia, for Respondent S.C. Department of Revenue; Roger M. Young, North Charleston, for Respondents
City of North Charleston and Harley Henderson; A. Arthur Rosenblum, Charleston, for Respondents County of Charleston and W.O. Thomas, County Treasurer; Ann Priest, Summerville, for Respondent City of North Charleston; Frances I. Cantwell, Charleston, for Respondent City of Charleston.
Scott Y. Barnes, of Holmes & Thomson, Charleston, for Amicus Curiae South Carolina Chamber of Commerce.
This appeal arises from the trial judge's finding upholding the constitutionality of the Local Option Sales Tax legislation, S.C. Code §§ 4-10-10 to -100. (Supp.1994). We affirm.
In 1990, the General Assembly adopted a bill to provide for a Local Option Sales Tax (LOST). The LOST legislation allows counties with referendum approval to charge an additional 1% sales or use tax upon sales. S.C. Code Ann. § 4-10-20 (Supp.1994). The tax is collected and forwarded to the State Treasurer and then redistributed to the counties. The LOST legislation requires a portion of the revenues collected by the counties and municipalities that adopt LOST to be used as a credit to reduce property taxes. 1 The credit against the property tax liability of a taxpayer is determined according to the appraised value of the taxpayer's property. S.C. Code Ann. § 4-10-40(B) (Supp.1994). The County of Charleston adopted LOST in 1990.
Westvaco, a manufacturer of paper products, owns real and personal property in the County of Charleston and the City of North Charleston. Westvaco filed LOST and property tax returns for 1991 and 1992 and paid these taxes under protest. Thereafter, Westvaco filed this action challenging the allocation of the property tax credit. Westvaco alleged, among other claims, that the LOST legislation violates S.C. Const. art. X, §§ 1 and 6 by effectively altering the uniformity requirements in these sections and that the LOST legislation violates S.C. Const. art. III, § 17. Westvaco conceded the sales tax itself is constitutional but that the tax credit was severable from the sales tax portion of the Act.
The action was heard by the trial judge without a jury. The trial judge found the LOST scheme did not violate the uniformity and equality requirements of S.C. Const. art. X, §§ 1 and 6. The trial judge found the uniformity and equality provisions inapplicable because the property tax credit was a distribution of funds rather than the levying of tax. The trial judge also held the title of the LOST legislation was not constitutionally deficient under S.C. Const. art. III, § 17 because it provided notice of a distribution. Westvaco appeals.
Westvaco first contends the trial judge erred in finding the property tax credit in the LOST legislation did not violate the uniformity requirements in S.C. Const. art. X, §§ 1 and 6. We disagree.
A legislative act will not be declared unconstitutional unless its repugnance to the constitution is clear and beyond a reasonable doubt. University of South Carolina v. Mehlman, 245 S.C. 180, 139 S.E.2d 771 (1964). A legislative enactment will be declared unconstitutional only when its invalidity appears so clearly as to leave no room for reasonable doubt that it violates some provision of the constitution. Id.
S.C. Const. art. X, § 1, states:
The General Assembly may provide for the ad valorem taxation by the State or any of its subdivisions of all real and personal property. The assessment of all property shall be equal and uniform in the following classifications.... (emphasis added).
S.C. Const. art. X, § 6 states:
The General Assembly may vest the power of assessing and collecting taxes in all of the political subdivisions of the State. Property tax levies shall be uniform in respect to persons and property within the jurisdiction of the body imposing such taxes.... (emphasis added).
The plain language of article X, §§ 1 and 6 does not impose uniformity on the distribution of taxes. See Davis v. County of Greenville, 313 S.C. 459, 443 S.E.2d 383 (1994). Article X, § 1 requires uniformity in the assessment of all property. Under article X, § 6, uniformity is obtained when property taxes are levied equally within the county. The LOST scheme has not altered the levying of property taxes nor the assessment of property. Rather, the scheme merely levies a sales tax and distributes the sales tax in the form of a property tax credit. Because property taxes are assessed and levied regardless of the LOST credit, the trial judge was correct in holding that the LOST plan does not violate article X, §§ 1 and 6 of the Constitution.
Westvaco next argues the title of the LOST legislation does not address the property tax credit and, therefore, violates S.C. Const. art. III, § 17.
S.C. Const. art. III, § 17 provides:
Every Act ... having the force of law shall relate to but one subject, and that shall be expressed in the title.
The purpose of this provision is to "prevent the General Assembly from being misled into the passage of bills containing provisions not indicated in their titles, and to apprise the people of the subject of proposed legislation, thereby giving them an opportunity to be heard." Hercules, Inc. v. South Carolina Tax Comm'n, 274 S.C. 137, 141, 262 S.E.2d 45, 47 (1980). Article III, section 17 requires that an act must relate to but one subject, with topics in the body of the act being kindred in nature and having a legitimate and natural association with the subject of the title and that the title of an act convey reasonable notice of the subject matter to the legislature and the public. Id. at 141-42, 262 S.E.2d at 47-48. Additionally, Article III, section 17 should be liberally construed so as to uphold an act. Powell v. Red Carpet Lounge, 280 S.C. 142, 311 S.E.2d 719 (1984).
The title to the LOST legislation provides:
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 10 TO TITLE 4 SO AS TO PROVIDE FOR THE LEVY...
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