The South Carolina Court of Appeals issued a decision today in Mitul Enterprises v. Beaufort County Assessor regarding a tax dispute. Mitual began building a Holiday Inn on Beaufort County property in 2007. Construction was completed in 2008 and occupancy began in 2009. Because of property improvements, the property was to be reassessed a new taxable value in 2009.
However a software glitch by the Beaufort County Assessor’s Office in 2009 resulted in the imposition of a property tax in the amount of $14,209.10, the pre-improvement value assigned to the property. Once the Assessor’s Office discovered the error, they issued a corrected tax bill for $105,282.48.
Mitual objected to the additional tax, arguing that it constituted an unwarranted reassessment. Mitual appealed the Assessor’s decision to the Administrative Law Courts and lost. He then appealed that decision to the South Carolina Court of Appeals, arguing that S.C. Code of Laws Section 12-39-220 prevented a public official from ordering a collection of an otherwise properly assessed tax. Mitual urged the Court to adopt a strict construction of the code provision.
The Court had a different perspective, noting that “[t]he purpose of the statute is to collect taxes that inadvertently escaped taxation.” The Court upheld the ALC decision, stating “…we give deference to an agency’s construction of a statute regarding its operation and because this construction is reasonable and furthers the legislative intent of collecting duly owed taxes, we affirm the ALC’s determination that the County Assessor had authority to act as it did in this case.”