Opinion from the South Carolina Court of Appeals


On Wednesday, September 30th, the South Carolina Court of Appeals published Boggero v. SCDOR. Eugienia Boggero, owner of Boggero’s Portable Toilets appealed an order of the Administrative Law Court (“ALC”) finding the gross proceeds from her portable toilet business was subject to the South Carolina sales and use tax.

The Department of Revenue (“DoR”) audited Boggerro and subsequently imposed sales tax on her gross proceeds for a two year period plus interests and penalties. Boggero protested the notice and the DoR affirmed the imposition of the tax.  Boggero requested an ALC hearing to contest the issue, arguing that the ‘”true object” of her business was a service- the removal and disposal of human waste- and, therefore not subject to the state sales and use tax.’ The ALC affirmed the DoR’s decision applying the “true object” test finding that the true object of the transactions at issue is for the rental or lease of . . . the portable toilets and other personal property.  Boggero appealed renewing her argument to this Court.

This Court examined the issue of whether the proceeds were “gross proceeds from the rental of portable toilets” and therefore subject to sales tax under South Carolina Code subsection 12-36-910(A).

The Court reasoned that this question was not primarily a question of statutory interpretation since there existed no dispute between the parties over the meaning of any term of the applicable tax statute. But rather, found the issue to be a question of fact noting that the analysis under the true object test focuses on factual questions; namely, whether the customer’s purpose for entering the transaction was to procure a good or a service.

Upon examination of the facts, the Court found that substantial evidence supports the ALC’s decision that the true object of the transactions at issue was “the rental or lease of the portable toilets and other personal property provided.  (“Perhaps most importantly, when examining the nature of many of the transactions there is evidence the customer is paying for the use of Boggero’s personal property for a limited amount of time–an arrangement essential to a lease or rental.”)

Accordingly, the Court affirmed the ALC’s determination.

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