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Town of Hilton Head Island v. Kigre, Inc.

Supreme Court of South Carolina

June 4, 2014

Town of Hilton Head Island, Respondent,
v.
Kigre, Inc., Appellant

Heard April 15, 2014.

Appeal from Beaufort County. Appellate Case No. 2012-213239. The Honorable Marvin H. Dukes, III, Special Circuit Court Judge.

Thomas C. Taylor, of Hilton Head Island, for Appellant.

Gregory M. Alford, of Hilton Head Island, for Respondent.

TOAL, C.J., PLEICONES, BEATTY, KITTREDGE and HEARN, JJ., concur.

OPINION

[408 S.C. 648] PER CURIAM:

This direct appeal involves a constitutional challenge to the Town of Hilton Head Island's (" Town" ) business license tax ordinance (" Ordinance" ), which requires businesses within the Town to pay an annual license fee based upon a business's classification and gross income. We affirm the trial court's finding that the Ordinance is valid.

[408 S.C. 649] The legislature has specifically granted municipalities the authority to enact ordinances and " levy a business license tax on gross income. " S.C. Code Ann. § 5-7-30 (Supp. 2013) (emphasis added). We emphasize that the business license fee is an excise tax--not an income or a sales tax. A business license fee is a tax on the privilege of doing business within the Town, and therefore, it is the manufacturing activity of Appellant Kigre, Inc. (" Kigre" ), which occurs wholly within the Town limits, and not Kigre's receipt of income or sales of its products in interstate commerce that is the business activity being taxed. Kigre has no other manufacturing facility and pays no license fee to any other taxing jurisdiction. See Carter v. Linder, 303 S.C. 119, 123, 399 S.E.2d 423, 425 (1990) (finding " [a] business license fee is an excise tax on the owner for the privilege of doing business" ).

The Ordinance requires " [e]very person engaged or intending to engage in any calling, business, occupation or profession . . . in whole or in part, within the limits of the town" to obtain a business license and pay a license fee, the amount of which is determined by the classification of the business and its gross income. See Hilton Head Island, S.C., Code of Ordinances § 10-1-10 (Sept. 26, 1983). The Ordinance defines gross income as:

The total revenue of a business, received or accrued, for one fiscal year collected or

Page 104

to be collected by reason of the conduct of business within the town, excepting therefrom income from business done wholly outside of the town on which a license tax is paid to some other municipality or a county and fully reported to the town. Gross income from interstate commerce shall be included in the gross income for every business subject to a business license fee.

Id. § 10-1-20(3) (Aug. 1, 2006). Further, section 10-1-60 provides a deduction from gross income for " business done wholly outside of the town on which a license tax is paid to some other municipality or a county." As previously noted, Kigre does not pay any license tax to any other municipality or county, either in South Carolina or anywhere in the world.

Kigre has clothed its many arguments in the premise that the Ordinance is not sound policy, for it is anti-business. However, it is not within our province to weigh-in on the [408 S.C. 650] wisdom of legislative policy determinations. Our judicial role is limited to determining whether the Ordinance withstands Kigre's constitutional challenges. See Dunes West Golf Club, LLC v. Town of Mount Pleasant, 401 S.C. 280, 300, 737 S.E.2d 601, 611 (2013) ( " It is not the ...


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