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Charleston County Assessor v. University Ventures, LLC

Supreme Court of South Carolina

July 24, 2019

Charleston County Assessor, Petitioner-Respondent,
University Ventures, LLC, Respondent-Petitioner. Appellate Case No. 2017-002369

          Heard February 21, 2019

          Appeal From The Administrative Law Court Shirley C. Robinson, Administrative Law Judge.


          Joseph Dawson III, Bernard E. Ferrara Jr., Austin Adams Bruner and Johanna S. Gardner, all of North Charleston, for Petitioner-Respondent.

          Morris A. Ellison and William T. Dawson III, both of Womble Bond Dickinson (US), LLP, of Charleston, for Respondent-Petitioner.


         In 2006, University Ventures, LLC (the Taxpayer) purchased a vacant lot in Charleston County (the Property). In 2008, the Taxpayer received building permits to construct a hotel and pool on the Property. Construction began, and the hotel and pool were completed in April 2009, at which time a certificate of occupancy was issued. As a result of the completed improvements and pursuant to law, the Charleston County Assessor (the Assessor) reappraised the Property. The new appraisal resulted in an increase in the value of the Property, which in turn increased the Taxpayer's 2010 property tax bill. The Taxpayer paid the increased 2010 tax bill without objection.

         This case concerns the Taxpayer's challenge to the 2011 tax bill. In 2011, the Assessor continued to value the Property as an improved lot, which it in fact was. The Taxpayer protested and claimed its 2011 tax bill should have been based on the Property's value as a vacant lot as of December 31, 2008. The court of appeals rejected the Taxpayer's argument, finding it would be absurd to value the Property as a vacant lot after improvements were completed.

         This appeal requires us to construe statutes addressing the process for reassessing real property and reconcile those with statutes that address the value of improvements to real property. For reasons we explain below and consistent with South Carolina's statutory scheme, we find that when the value set by a reassessment program's uniform date of value conflicts with the value set by the completion of improvements to property, the improvement value controls. We therefore affirm the court of appeals' decision as modified.


         It appears the parties' dispute is the result of their different interpretations and usages of the term "reassessment." As a result, we use terminology in this opinion that the parties and courts have not previously used in an effort to make clear which portions of the reassessment cycle we are discussing at any given time.

         The South Carolina Department of Revenue (DOR) must periodically order the reassessment of real property to ensure it is "assessed uniformly and equitably throughout the State." S.C. Code Ann. § 12-43-210(A) (2014); id. § 12-4-510(3) (2014). In 1995, the General Assembly enacted section 12-43-217, initially requiring "each county or the State [to] appraise and equalize those properties under its jurisdiction" by conducting a reassessment program once every four years. Act No. 145, 1995 S.C. Acts 900, 1483-84. However, the next year, the General Assembly amended the statute to provide:

Notwithstanding any other provision of law, once every fifth year each county or the State shall appraise and equalize those properties under its jurisdiction. Property valuation must be complete at the end of December of the fourth year [hereinafter, an Appraisal Year] . . . . In the fifth year, the county or State shall implement the program and assess all property on the newly appraised values [hereinafter, an Implementation Year].

         Act No. 431, 1996 S.C. Acts 2605, 2616-17 (emphasis added); S.C. Code Ann. § 12-43-217(A) (2014).[1] Counties applied section 12-43-217 retroactively, meaning they began implementing the reassessment program outlined in the statute five years after each county's respective most-recent Implementation Year. See Old Citadel Assocs., L.L.C. v. Charleston Cty. Assessor, No. 03-ALJ-17-0149-CC, 2004 WL 3154634, at *12 (S.C. Admin. Ct. Mar. 29, 2004) (explaining a prospective application in which every county implemented the new program in 1997 "would have created a nightmare for the [DOR] since it is charged by statute to oversee each of the 46 counties as they prepare for and conduct their reassessments").

         In February 1997, the Director of the DOR ordered Charleston County to complete its next "reassessment" (i.e., countywide appraisal) by December 31, 1999, and implement the revised values in the tax year 2000 (the 2000 reassessment).[2] Id. at *13. However, in 1999, in the middle of Charleston County's reappraisal process, the General Assembly amended section 12-43-217 to add subsection (B), which provides:

A county by ordinance may postpone for not more than one property tax year the implementation of revised values resulting from the equalization program provided pursuant to subsection (A). . . . The postponement allowed pursuant to this subsection does not affect the schedule of the appraisal and equalization program required pursuant to subsection (A) of this section.

Act No. 93, 1999 S.C. Acts 295, 316. The amendment took effect on July 1, 1999. Subsequently, Charleston County adopted Ordinance No. 1125, postponing the implementation of the revised values resulting from the 1999 countywide appraisal from tax year 2000 (as ordered by the DOR) to tax year 2001. See Old Citadel, 2004 WL 3154634, at *13.

         From the first time the Assessor began following section 12-43-217's five-year reassessment cycle (during the 1999 countywide appraisal), he differentiated between Year 4 of the cycle (an Appraisal Year[3]) and Year 3 of the cycle (hereinafter, a Value Year). By this, we mean that although the Assessor conducted the appraisals in Year 4 of a given reassessment cycle, he determined the value of each property in the county based on the property's worth as of December 31 of Year 3. See S.C. Code Ann. § 12-37-900 (Supp. 2018) (stating that for tax purposes, the value of a piece of property is determined by its value on December 31 of the preceding year); Lindsey v. S.C. Tax Comm'n, 302 S.C. 274, 275 n.1, 395 S.E.2d 184, 185 n.1 (1990) ("The pertinent date to determine the value of property for a given tax year is December 31st of the preceding year."). For example, in the first reassessment program conducted in Charleston County after the enactment of section 12-43-217, the Assessor reappraised properties in 1999 (an Appraisal Year) at the DOR's order, but "valued" the properties (i.e., determined the value of each property being appraised) as of December 31, 1998.[4]See Old Citadel, 2004 WL 3154634, at *2.[5]

         The Assessor thereafter kept to the five-year reassessment cycle set forth in section 12-43-217:

• Conducting a countywide appraisal every five years (i.e., all calendar years ending in the numbers 4 or 9 were/are Appraisal Years: 1999, 2004, 2009, 2014, 2019, etc.);
• Basing the value of each property on the property's worth as of December 31 of the year preceding the Appraisal Year (i.e., all calendar years ending in the numbers 3 or 8 were/are Value Years: 1998, 2003, 2008, 2013, 2018, etc.); and
• Implementing the revised values the year following the Appraisal Year (i.e., all calendar years ending in the numbers 0 or 5 were/are Implementation Years: 2000, 2005, 2010, 2015, 2020, etc.). Aside from the initial implementation of the 2000 reassessment that was delayed to 2001 by Ordinance No. 1125, Charleston County has delayed the Implementation Year only once, from tax year 2010 (i.e., the 2010 reassessment, which is the subject of this appeal) to 2011.


         As mentioned at the outset, in December 2006, the Taxpayer bought the Property, which, at that point, was a vacant lot. In 2008, the Taxpayer received two building permits from the City of North Charleston to begin construction of a hotel and pool. In April 2009, the improvements were completed, and the City of North Charleston issued a certificate of occupancy. As a result of the completed improvements in 2009 and the associated increase in property value, the Assessor reappraised the Property and issued a 2010 tax bill valuing the Property (with the fully-constructed hotel and pool) at $8, 180, 000 and billing the Taxpayer for $122, 356.44. See S.C. Code Ann. §§ 12-37-670(A)-(B)(1), -3140(E) (2014). The Taxpayer paid this bill. At no time did the Taxpayer in any manner challenge the 2010 tax bill based on the 2009 improvements and increased property value. In fact, the Taxpayer concedes the increased property value in 2009 based on the completed hotel and pool, and the resulting 2010 tax bill, were proper. Yet the Taxpayer, relying on the reassessment statutes, argues the 2011 tax bill must be based on the value of the Property as of December 31, 2008, as a vacant lot. We disagree.

         Irrespective of the improvements to the Property, throughout 2009, the Assessor conducted a countywide appraisal of all properties, setting the uniform value date for the appraisal as December 31, 2008 (2008 being a Value Year). Likewise, while 2010 was initially scheduled to be an Implementation Year, the Charleston County Council adopted Ordinance No. 1586, delaying the implementation of the 2010 reassessment (i.e., the implementation of the revised values from the 2009 appraisal) from 2010 to 2011. Aside from delaying the implementation, ...

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