THE STATE OF SOUTH CAROLINA
In The Supreme Court
James Mikell "Mike" Burns, Garry R. Smith and Dwight
A. Loftis, Appellants,
v.
Greenville County Council and Greenville County,
Respondents.
Appellate Case No. 2018-002255
Appeal from Greenville County
Charles B. Simmons Jr., Circuit Court Judge
Opinion No. 28041
Heard August 20, 2020 – Filed June 30, 2021
REVERSED
Robert Clyde Childs III, Childs Law Firm; J. Falkner
Wilkes, both of Greenville for Appellants.
Sarah P. Spruill and Boyd Benjamin Nicholson Jr.,
Haynsworth Sinkler Boyd, PA, both of Greenville for
Respondents.
JUSTICE FEW: Greenville County Council implemented what it called a "road
maintenance fee" to raise funds for road maintenance and a "telecommunications
fee" to upgrade public safety telecommunication services. The plaintiffs—three
members of the South Carolina General Assembly—claim the two charges are taxes
and, therefore, violate section 6-1-310 of the South Carolina Code (2004). We agree.
We declare the road maintenance and telecommunications taxes are invalid under
South Carolina law.
I. Facts and Procedural History
Greenville County Council enacted the two ordinances at issue in 2017. Ordinance
4906 was enacted "to change the road maintenance fee to . . . $25." Ordinance 4906
amended Ordinance 2474—enacted in 1993—which required the owner of every
vehicle registered in Greenville County1 to pay $15 a year to the Greenville County
Tax Collector. County Council stated in Ordinance 4906 it increased the charge
because "the current fee is insufficient to keep up with increased costs of
maintenance."
Ordinance 4907 was enacted "for . . . the lease, purchase, . . . or maintenance of
County-wide public safety telecommunications network infrastructure and network
components" and related costs. This ordinance requires the owner of every parcel
of real property in Greenville County to pay $14.95 a year for ten years to the
Greenville County Tax Collector. County Council stated in Ordinance 4907 it
imposed the charge to "mov[e] all County-wide public safety telecommunications to
a single network platform" to "promote the safety of life and property in Greenville
County by providing much needed modernization of current public safety
telecommunications infrastructure."
The plaintiffs filed this lawsuit to challenge the validity of the ordinances on several
grounds, including their claim the ordinances impose a tax and not a permissible fee.
The parties consented to an order referring the case to the master in equity for trial
pursuant to Rule 53(b) of the South Carolina Rules of Civil Procedure. The master
found the ordinances did not violate the law. Because one of the grounds on which
the plaintiffs brought the challenge was the Equal Protection Clause, they filed their
notice of appeal with this Court pursuant to Rule 203(d)(1)(A)(ii) of the South
Carolina Appellate Court Rules and subsection 14-8-200(b)(3) of the South Carolina
Code (2017). Though we find the Equal Protection Clause question is not a
significant issue, we elect not to transfer the case to the court of appeals. See Rule
203(d)(1)(A)(ii), SCACR (providing "where the Supreme Court finds that the
1
Section 56-3-110 of the South Carolina Code (2018) requires every motor vehicle
in the State to be registered and licensed, and subsection 56-3-195(A) of the South
Carolina Code (2018) assigns the registration process to each county for vehicles
owned by residents of the county.
constitutional issue raised is not a significant one, the Supreme Court may transfer
the case"); § 14-8-200(b)(3) (same).
II. Analysis
South Carolina law permits counties "to . . . levy ad valorem[2] property taxes and
uniform service charges." S.C. Code Ann. § 4-9-30(5)(a) (2021); see also S.C. Code
Ann. § 6-1-330(A) (2004) ("A local governing body . . . is authorized to charge and
collect a service or user fee."); S.C. Code Ann. § 6-1-300(6) (2004) ("'Service or
user fee' also includes 'uniform service charges'."). Except for value-based property
taxes, a county "may not impose a new tax . . . unless specifically authorized by the
General Assembly." § 6-1-310.
Neither ordinance imposes a value-based property tax, and the General Assembly
has not authorized Greenville County to impose any other new taxes. Therefore,
unless the charges in the ordinances are "uniform service charges" under subsection
4-9-30(5)(a) or a "service or user fee" under subsection 6-1-330(A), the charges
imposed pursuant to the ordinances are invalid under State law.
In 1992, this Court addressed the question of what is a "uniform service charge
authorized under [section] 4-9-30," and in particular, whether a "road maintenance
fee" imposed by Horry County was "a service charge or a tax." Brown v. Cty. of
Horry, 308 S.C. 180, 181, 182, 417 S.E.2d 565, 566 (1992). We later explained,
summarizing our extensive analysis in Brown,
Under Brown, a fee is valid as a uniform service charge if
(1) the revenue generated is used to the benefit of the
payers, even if the general public also benefits (2) the
revenue generated is used only for the specific
improvement contemplated (3) the revenue generated by
the fee does not exceed the cost of the improvement and
(4) the fee is uniformly imposed on all the payers.
C.R. Campbell Const. Co., Inc. v. City of Charleston, 325 S.C. 235, 237, 481 S.E.2d
437, 438 (1997) (citing Brown, 308 S.C. at 184-86, 417 S.E.2d at 567-68).
2
"Ad valorem" is a Latin term sometimes used to mean "value-based." See Ad
Valorem, BLACK'S LAW DICTIONARY (11th ed. 2019) (stating "ad valorem" means
"proportional to the value of the thing taxed").
In 1997, the General Assembly enacted subsection 6-1-300(6), which defines
"service or user fee"—including "uniform service charges"—as "a charge required
to be paid in return for a particular government service or program made available
to the payer that benefits the payer in some manner different from the members of
the general public not paying the fee." After 1997, therefore, when a local
government imposes a charge it contends is not a tax, the charge arguably must meet
the requirements we set forth in Brown but certainly must meet the requirements the
General Assembly set forth in subsection 6-1-300(6).
Our analysis of the two ordinances at issue in this case begins and ends with
subsection 6-1-300(6). In its brief, Greenville County argues Ordinance 4906 meets
the subsection 6-1-300(6) requirement of a "government service or program . . . that
benefits the payer in some manner different from the members of the general public"
because "the funds collected are 'specifically allocated for road maintenance,'" as
this Court approved in Brown. The argument conveniently ignores the fact
subsection 6-1-300(6) was enacted in 1997, five years after Brown and four years
after Greenville County enacted its original road maintenance fee in Ordinance 2474.
The fact the funds are allocated for road maintenance says nothing of any benefit
peculiar to the payer of the fee. In fact, every driver on any road in Greenville
County—whether their vehicles are registered in Greenville County, Spartanburg
County, or in some other state—benefits from the fact the funds are "specifically
allocated for road maintenance."
At oral argument, Greenville County made the additional argument Ordinance 4906
satisfies subsection 6-1-300(6) because the property owners who pay the charge are
the drivers who "most use the roads" maintained by the funds collected. We do not
agree this satisfies subsection 6-1-300(6). While Greenville County residents who
use the roads every day may derive more benefit from having the roads maintained
in good condition, it is still the same benefit every driver gets, no matter where their
car is registered.
Greenville County argues Ordinance 4907 satisfies subsection 6-1-300(6) because
the improved telecommunications system will "enhance[] real property values." We
find this argument fails. When County Council enacted Ordinance 4907, it did not
address the factual question of whether an improved telecommunications system will
enhance property values, and Greenville County presented only speculative evidence
of such an enhancement at trial. The County Administrator testified the new system
"could . . . enhance property values for individual property owners." One County
Council member testified his own property "stands to benefit from better
coordinated, faster, first responder services." Plaintiff Mike Burns testified on cross-
examination the new telecommunication system "would benefit [him] as a property
owner," but he said nothing about any benefit to his property value.
The plaintiffs argue any claim of an increase in property value from the new
telecommunication system is "too tenuous" to satisfy subsection 6-1-300(6).
Greenville County argues this Court already approved enhanced property value as a
satisfactory benefit in C.R. Campbell Construction. See 325 S.C. at 237, 481 S.E.2d
at 438 (finding "the payers benefit because their real property values are enhanced").
We find C.R. Campbell Construction is not helpful to Greenville County. In that
case, "City Council made a specific finding that parks and recreational facilities add
to the value of real estate within the City." 325 S.C. at 236, 481 S.E.2d at 437. We
stated, "This finding is supported by evidence in the record that property values are
in fact enhanced by such amenities." Id. In this case, neither County Council when
it adopted the ordinance nor Greenville County when it tried this case put any effort
into demonstrating the new telecommunications system would meaningfully
enhance property values.
Taxpayers should hope every action taken by local government is calculated to not
damage property values. What governing body would attempt—and what electorate
would accept—an act that is calculated to damage property value? Every action of
local government, therefore, in at least some minor way, should be calculated to
enhance property value. In some instances, as in C.R. Campbell Construction, the
enhancement of property value may be significant. If the governing body actually
addresses the effect on property value and deems an anticipated enhancement
significant enough to differentiate the benefit to those paying the fee from the benefit
everyone receives, then it is likely the courts will uphold the decision, as we did in
C.R. Campbell Construction. In the first instance, however, the question whether an
ordinance actually enhances property values must be addressed by the local
governing body. In Ordinance 4907, County Council described the aged equipment
previously used in multiple networks, and it stated the new single network would
improve the delivery of emergency and public safety communications in multiple
ways. But the ordinance says nothing of whether property owners would see any
benefits from the new network. Even if property owners will see benefits, this Court
has no idea whether the impact is significant enough to affect property value. We
hold that simply declaring a fee will enhance property value does not make the
property owner paying the fee the beneficiary of some unique benefit, as required
by subsection 6-1-300(6).
Therefore, as to both Ordinance 4906 and Ordinance 4907, we find Greenville
County failed to satisfy the subsection 6-1-300(6) requirement that the "government
service or program . . . benefits the payer in some manner different from the
members of the general public."3
III. Conclusion
Greenville County Ordinances 4906 and 4907 purport to impose a "uniform service
charge" on those who are required to pay it. We find the charges are taxes. State
law prohibits local government from imposing taxes unless they are value-based
property taxes or are specifically authorized by the General Assembly. Neither is
true for these two ordinances. Therefore, the ordinances are invalid.
REVERSED.
BEATTY, C.J., KITTREDGE, HEARN and JAMES, JJ., concur.
KITTREDGE, J., concurring in a separate opinion in which BEATTY, C.J.,
joins.
3
The plaintiffs raised other issues we find it unnecessary to address. See Whiteside
v. Cherokee Cty. Sch. Dist. No. One, 311 S.C. 335, 340, 428 S.E.2d 886, 889 (1993)
("In view of our disposition of this issue, we need not address appellants' remaining
exceptions." (citations omitted)).
JUSTICE KITTREDGE: I concur with the majority opinion. I write separately
to offer two points. First, the post-Brown4 enactment of section 6-1-300(6) of the
South Carolina Code (2004) is the standard set by out legislature for determining
what constitutes a "service or user fee." In my judgment, the Brown factors may
inform the analysis, particularly factors (3) and (4), but section 6-1-300(6) is
controlling. Second, this Court in recent years has received an increasing number
of challenges to purported "service or user fees." Local governments, for obvious
reasons, want to avoid calling a tax a tax. I am hopeful that today's decision will
deter the politically expedient penchant for imposing taxes disguised as "service or
user fees." I believe today's decision sends a clear message that the courts will not
uphold taxes masquerading as "service or user fees." Going forward, courts will
carefully scrutinize so-called "service or user fees" to ensure compliance with
section 6-1-300(6).
BEATTY, C.J., concurs.
4
Brown v. Cty. of Horry, 308 S.C. 180, 417 S.E.2d 565 (1992).