Could Lexington County add a road sales tax on top of its school tax?

Plain-English summary

A legislator asked whether Lexington County voters could put a road-improvement sales tax in place while a one-cent local tax for school property-tax relief was already operating. The AG found that the laws authorizing each type of tax generally contemplated taxes in addition to other local sales taxes. That did not settle the Lexington County question: a separate statute capped the combined tax burden when a transportation levy was added to a levy enacted by local legislation.

The existing Lexington County school-related levy was one percent. The AG concluded it used up the amount allowed under the cap, so any transportation sales tax for the county would exceed it. His conclusion concerned Lexington County's levy and the statutes as they stood in 2008; it was not a finding that every county was unable to impose two types of local sales tax.

Currency note

This opinion was issued in 2008. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the AG say the two local-tax laws could never operate together? A: No. He said their general language allowed both types, but the separate transportation-tax limit prevented Lexington County from adding the proposed levy while its one-percent school levy remained in place.

Q: Why did the school tax count against the road-tax limit? A: The opinion said the transportation-tax limit counted taxes imposed through local legislation. Lexington County's school-related sales tax came from such legislation.

Q: Could Lexington County add even a smaller transportation sales tax in the circumstances described? A: The AG said no. Because the existing school tax already reached one percent, any additional transportation tax would exceed the limit he applied.

Background and statutory framework

The opinion identified Lexington County's school-related sales tax as authorized by the Lexington County School District Property Tax Relief Act and considered the transportation-tax provisions in chapter 37 of title 4. Both included language allowing taxes in addition to other local sales taxes. Section 4-37-40, however, imposed the one-percent combined limit that controlled the county's proposed second levy.

Citations and references

Statutes discussed: S.C. Code Ann. § 4-37-10 et seq.; Section 4-37-40. Local legislation discussed: Lexington County School District Property Tax Relief Act.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/april-21-2008-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2011/05/pitts-t-os-8587-4-21-08-one-cent-local-option-sales-tax-statute.pdf

Original opinion text

April 21, 2008

The Honorable Ted Pitts
Member, House of Representatives
323-A Blatt Building
Columbia, South Carolina 29211
Dear Representative Pitts:
We received your letter requesting an opinion of this Office concerning the one-cent local option sales tax statute. In your letter, you explain: There is a one-cent local option sales tax in Lexington County for school buildings and debt service. Does current law allow for a second local option sales tax for road improvements? I know there are several counties that have one of these sales taxes in place whether it is for roads in York County and Horry County or for schools in Richland and Lexington County, but I am unaware of any county that has both in place. Thus, you ask us to clarify “whether the current statute permits voters in a single county to put both one-penny local option sales taxes in place.” Law/Analysis Initially, we believe your reference to a one-cent local option sales tax for school buildings and debt service involves local sales and use tax imposed in Lexington County by the Lexington County School District Property Tax Relief Act (the “Act”) originally enacted by the Legislature in 2004. 2004 S.C. Acts 3142. The Act provides for the imposition of a one-percent sales and use tax upon approval of Lexington County voters to be used to off-set school property tax liabilities on property located in Lexington County. Id. According to a revised version of the Act, the revenue collected from the additional sales and use tax is used to provide a nonrefundable credit against school property taxes for “the liability arising from millage imposed for debt service for schools,

The Honorable Ted Pitts
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April 21, 2008

then against any liability arising from other methods of financing school capital projects, then against school building lease-purchase obligations, and finally against any liability arising from school operations.” 2006 S.C. Acts 3841. The Act contains a provision addressing the imposition of other local option sales and use taxes. According to section 6(B) of the Act: The tax authorized by this act is in addition to all other local sales and use taxes and applies to the gross proceeds of the sales in the applicable jurisdiction which are subject to the tax imposed by Chapter 36, Title 12 of the 1976 Code and the enforcement provisions of Chapter 54, Title 12 of the 1976 Code. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36 of Title 12 of the 1976 Code are exempt from the tax imposed by this act. The gross proceeds of the sale of food which may lawfully be purchased with United States Department of Agriculture food coupons are exempt from the tax imposed by this act. The tax imposed by this act also applies to tangible personal property subject to the use tax in Article 13, Chapter 36 of Title 12 of the 1976 Code. Id. Thus, according to this provision, other local option sales and use taxes may be imposed and are in addition to the sales and use tax imposed under the Act. Furthermore, we presume by the local option sales tax for “road improvements,” you are referring to local option sales tax for transportation facilities found under chapter 37 of title 4 of the South Carolina Code. S.C. Code Ann. § 4-37-10 et seq. (Supp. 2007). These provisions allow counties to impose, with approval of the county’s electorate, up to a one-percent sales and use tax to fund one or more transportation projects. Id. Similar to the provision found in the Act, section 4-37-30(A)(9) of the South Carolina Code (Supp. 2007) states as follows: The tax authorized by this section is in addition to all other local sales and use taxes and applies to the gross proceeds of sales in the applicable jurisdiction which are subject to the tax imposed by Chapter 36 of Title 12 and the enforcement provisions of Chapter 54 of Title 12. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36 of Title 12 are exempt from the tax imposed by this section. The gross proceeds of the sale of food

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April 21, 2008

lawfully purchased with United States Department of Agriculture food stamps are exempt from the tax imposed by this section. The tax imposed by this section also applies to tangible personal property subject to the use tax in Article 13, Chapter 36 of Title 12. “The primary rule of statutory construction is to ascertain and give effect to the intent of legislature.” Peake v. South Carolina Dept. of Motor Vehicles, 375 S.C. 589, 597, 654 S.E.2d 284, 289 (Ct. App. 2007). Our courts have held that “[w]here the language is plain and unambiguous, and conveys a clear and definite meaning, the rules of statutory interpretation are not needed and the Court has no right to impose another meaning.” Pee Dee Reg’l Transp. v. South Carolina Second Injury Fund, 375 S.C. 60, 62, 650 S.E.2d 464, 465 (2007). In addition, “statutes must be read as a whole, and sections which are part of the same general statutory scheme must be construed together and each one given effect, if reasonable.” State v. Thomas, 372 S.C. 466, 468, 642 S.E.2d 724, 725 (2007). In reading these two provisions together, we believe the plain and ordinary language used allows Lexington County to impose both a one-percent local sales and use tax under the Act as well as a local sales and use tax up to one-percent pursuant to chapter 37 of title 4. However, in our review of the provisions contained in chapter 37 or title 4, we discovered a limitation on the amount of transportation tax a county may impose. Section 4-37-40 of the South Carolina Code (Supp. 2007) provides: “At no time may any portion of the county area be subject to more than one-percent sales tax levied pursuant to this chapter, Article 3, Chapter 10 of this title, or pursuant to any local legislation enacted by the General Assembly.” (emphasis added). According to this provision, the amount of transportation tax a county may impose is reduced by other local sales and use taxes imposed pursuant to legislative enactments. In the case of Lexington County, because the Act provides for a one-percent sales and use tax, the amount of transportation tax Lexington County may impose is reduced by one-percent. Thus, if Lexington County imposed any amount of transportation tax, it would exceed the onepercent limitation found in section 4-37-40. Accordingly, this provision effectively prohibits the imposition of both local option sales and use taxes in Lexington County. Conclusion Based on our reading of both the local legislation allowing Lexington County to impose a one-percent local sales and use tax and the statutes governing local transportation taxes, we find the provisions of both bodies of law allow for the imposition of both taxes. However section 4-37-40 limits the transportation tax imposed by requiring such tax, when combined with taxes imposed pursuant to local legislation, not to exceed one-percent. Because the local option sales tax imposed

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under the Act is one-percent, we do not believe Lexington County currently has the ability to impose a transportation tax. Very truly yours, Henry McMaster Attorney General

By:

REVIEWED AND APPROVED BY:

______
Robert D. Cook
Deputy Attorney General

Cydney M. Milling
Assistant Attorney General