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Westvaco Corp. v. South Carolina Dept. of Revenue, 321 S.C. 59, 467 S.E.2d 739

Facts

In 1990, the South Carolina General Assembly enacted the Local Option Sales Tax (LOST) legislation, allowing counties to impose an additional 1% sales tax with voter approval. The tax revenue is collected and redistributed to counties, with a portion used to provide property tax credits based on property appraisals. Westvaco, a manufacturer with property in Charleston County, paid LOST and property taxes under protest and subsequently challenged the allocation of the property tax credit, claiming it violated constitutional uniformity requirements.

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.

Issue

Did the Local Option Sales Tax (LOST) legislation violate the constitutional provisions requiring uniformity in tax levies and the requirement that acts relate to one subject?

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.

Rule

A legislative act will not be declared unconstitutional unless its repugnance to the constitution is clear and beyond a reasonable doubt. The uniformity provisions do not apply to the distribution of taxes, and the title of an act must relate to one subject, providing reasonable notice of the subject matter.

A legislative act will not be declared unconstitutional unless its repugnance to the constitution is clear and beyond a reasonable doubt.

Analysis

The court found that the LOST scheme did not alter the levying or assessment of property taxes, as it merely imposed a sales tax and distributed the revenue as a property tax credit. The court held that the uniformity requirements were inapplicable because the property tax credit was a distribution of funds rather than a tax levy. Additionally, the title of the LOST legislation was deemed sufficient as it conveyed the general subject and related to the distribution of the sales tax.

The plain language of article X, §§ 1 and 6 does not impose uniformity on the distribution of taxes.

Conclusion

The Supreme Court affirmed the trial judge's ruling, concluding that the Local Option Sales Tax legislation was constitutional and did not violate the uniformity or title requirements of the South Carolina Constitution.

Accordingly, for the reasons stated the trial judge is AFFIRMED.

Who won?

The South Carolina Department of Revenue prevailed in the case, as the court upheld the constitutionality of the Local Option Sales Tax legislation, finding no violation of the uniformity or title provisions.

The trial judge found the LOST scheme did not violate the uniformity and equality requirements of S.C. Const. art. X, §§ 1 and 6.

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