Could a South Carolina county hold a live tax auction with online bidding during COVID-19?

Plain-English summary

In August 2020, the South Carolina Attorney General considered whether delinquent-tax collectors could conduct tax auctions through an online platform during the COVID-19 pandemic. It read the statute's requirement of a public auction at a courthouse or another convenient place within the county as likely calling for a physical location.

The office nonetheless believed a court could find substantial compliance where a live auction was conducted within the county, bidders participated online, and taxpayers received the same protection as at an in-person auction. It could not determine whether any proposed setup met those conditions without factual findings. Because tax-sale requirements were strictly enforced, it recommended court clarification or legislation expressly allowing online sales.

Currency note

This opinion was issued in 2020. 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 opinion approve all-online tax sales?
A: No. It saw a possible substantial-compliance argument for a live auction within the county with online bidding and equivalent taxpayer safeguards, but did not approve a particular method.

Q: Why did the auction's location matter?
A: The tax-sale statute called for a public auction at the courthouse or another convenient place within the county. The office believed that wording likely contemplated a physical place.

Q: Who could decide whether a specific online setup complied?
A: The office said that required factual findings it could not make and recommended clarification by a court or the Legislature.

Background and statutory framework

The opinion applied the county-location and public-auction wording of the tax-sale statute in the context of pandemic gathering limits. It emphasized strict compliance with requirements designed to protect owners from losing property unexpectedly. Its possible substantial-compliance conclusion depended on a live county auction and equivalent taxpayer protections.

Citations and references

The legal authorities discussed above appear in the official opinion. The analysis addressed the request as presented in 2020.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/august-3-2020-2/
• Original PDF: https://www.scag.gov/wp-content/uploads/2020/08/02346737.pdf

Original opinion text

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Alan Wilson
ATTORNEY General

August 3, 2020

The Honorable Daniel M. Gregory
Delinquent Tax Collector
Charleston Count Bridge View Drive
Suite 11 OB

North Charleston, South Carolina 29405-7464
The Honorable Maria E. Walls, CPA
Beaufort County Treasurer
P.O. Box 487

Beaufort, South Carolina 29901-0487

Dear Mr. Gregory and Ms. Walls:

We received your requests for opinions of this Office concerning the ability of counties to hold

delinquent tax sales online due to the Covid-19 pandemic. Mr. Gregory, in your letter, you explain:

Many of my colleagues of Delinquent Tax Collectors throughout the State have questioned whether it is legal to hold an online tax sale auction due to

the fact that the many venues that tax collectors use around their county to conduct their tax sales are already jammed with multiple hundreds of people in one room elbow to elbow.

With the Covid-19 Pandemic continuing to cause social distancing measures that we now realize are not currently moving in the right direction we are now faced with a dilemma if we cannot find a large enough venue to hold our inperson tax sale then the county and municipalities that rely on this revenue (which can run into the millions in some counties) will not receive this revenue until much later next year when social distancing may not be a factor of holding an in-person tax sale.

In speaking of online sale auctions, there are experienced private entities that counties could use to facilitate online tax sale auctions. There also is the

liENiBERTC. Dennis Building • Post Office Box 11549 . Columbia,SC 29211-1549 . Telephone 803-734-3970 • Facsp.iile 803-253-6283

The Honorable Daniel M. Gregory
The Honorable Maria E. Walls
Page 2

August 3, 2020

possibility of the Counties' IT departments having the capability of helping delinquent tax collectors set up an online tax sale auction in house. Ms. Walls, you state you have a related question: "Would a live, public auction conducted virtually by the person officially charged with the collection of delinquent taxes from the County

Offices of a given county, satisfy the statutory requirements of S.C. Code Ann. § 12-51-50?" You further explain: "The term 'virtual' meaning that the conduct and level of participation is live and consistent with historical practices but the avenue through which bidders participate is through the internet rather than physical attendance." Law/Analysis

As Mr. Gregory noted in his letter,
South Carolina appellate courts have consistently held the enforcing agencies

of government to strict compliance with all the legal requirements surrounding tax sales.

Dibble v. Bryant, 274 S.C. 481, 265 S.E.2d 673 (1980); Manii v.

Blackwell. 473 S.E.2d 837 (Ct. App. 1 996) (Davis Adv.Sh. No. 16 at 23). The

sound view is that all requirements of law leading up to tax sales which are intended for the protection of the tax payer against surprise or the sacrifice of his property are to be regarded as mandatory and are to be strictly enforced. Dibble v. Bryant, supra. Rives v. Bulsa. 325 S.C. 287, 292-93, 478 S.E.2d 878, 880-81 (Ct. App. 1996).

As you both mention in your letters, section 12-51-50 of the South Carolina Code (2014) governs the sale of property as an alternate procedure for the collection of taxes. This provision states: The property duly advertised must be sold, by the person officially charged with the collection of delinquent taxes, at public auction at the courthouse or other convenient place within the county, if designated and advertised, on the advertised date for legal tender payable in full by cash, cashier's check, certified check, or money order on the date of the sale.

If the defaulting

taxpayer or the grantee of record of the property has more than one item advertised to be sold, as soon as sufficient funds have been accrued to cover all of the delinquent taxes, assessments, penalties, and costs, further items must not be sold.

S.C. Code Ann. § 12-51-50 (emphasis added). Accordingly, the answers to your questions depend upon whether a virtual auction qualifies as an "other convenient place within the county."

The Honorable Daniel M. Gregory

The Honorable Maria E. Walls
Page 3
August 3, 2020

"The primary rule of statutory construction is to ascertain and give effect to the intent of the legislature." Mid-State Auto Auction of Lexington. Inc. v. Altman. 324 S.C. 65, 69, 476 S.E.2d 690, 692 (1996) (citation omitted). Our Supreme Court offered this thorough explanation of statutory construction in Lambries v. Saluda County Council. 409 S.C. 1, 10—11, 760 S.E.2d 785, 789-90 (2014):

If a statute is ambiguous, the courts must construe its terms. Sparks v. Palmetto Hardwood. Inc.. 406 S.C. 124, 750 S.E.2d 61 (2013). "A statute as a whole must receive practical, reasonable, and fair interpretation consonant

with the purpose, design, and policy of lawmakers." IdL at 128, 750 S.E.2d at 63 (citation omitted). "In interpreting a statute, the language of the statute must be read in a sense that harmonizes with its subject matter and accords with its general purpose." Id. (citation omitted). "Where the statute's 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." Media Gen.. 388 S.C. at 148, 694 S.E.2d at 530 (quoting Hodges v. Rainev. 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000)). "If a statute's 'terms are clear and unambiguous, they must be taken and understood in their plain, ordinary and popular sense, unless it fairly appears from the context that the Legislature intended to use such terms in a technical or peculiar sense.'" Id. (citation omitted). "What a legislature says in the text of a statute is considered the best evidence

of the legislative intent or will." Id. (quoting Norman J. Singer, Sutherland Statutory Construction § 46.03, at 94 (5th ed.1992)).

"Therefore, the courts

are bound to give effect to the expressed intent of the legislature." Id. "While it is true that the purpose of an enactment will prevail over the literal import of the statute, this does not mean that this Court can completely rewrite a plain

statute." Hodges. 341 S.C. at 87, 533 S.E.2d at 582; cf. Lancaster Cntv. Bar Ass'n v. S.C. Comm'n on Indigent Defense. 380 S.C. 219, 222, 670 S.E.2d 371, 373 (2008) ("In construing a statute, this Court will reject an interpretation when such an interpretation leads to an absurd result that could not have been intended by the legislature."). Beginning with the plain language used in the statute, section 12-51-50 gives the option of conducting the auction at a courthouse or "other convenient place." Included among the definitions of "place" are "physical environment" and "a building or locality used for a special purpose." See Merriam-Webster's Online Dictionary, "place" (last visited July 22, 2020)
http://www.merriam-webster.com/dictionary/place.
According to the plain and ordinary
meaning of "place," section 12-51-50 indicates an auction shall be conducted in a physical space. In addition, section 12-51-50 states such place is "within the county," also indicting it should

The Honorable Daniel M. Gregory
The Honorable Maria E. Walls
Page 4
August 3, 2020

take place in a physical space. Thus, we are concerned the Legislature intended for the auction to take place in a physical location rather than online. However, Ms. Walls suggested conducting a live, public auction within the county but on a virtual platform could meet the statutory requirements. prohibit the use of an online platform.

The statute itself does not allow or

Further, a court could find the auction the technically is

taking place in "place within the county," but the bidding is online.

The Covid-19 pandemic presents many challenges especially when our laws suggest gathering in groups to conduct government functions.

Certainly, our lawmakers never considered these

challenges when enacting such legislation.

Our courts have been clear the statutory mandates

must be strictly complied with when conducting tax sales, but most of these cases dealt with satisfying notice requirements, which are critical to protecting the taxpayer against the surprise forfeiture of his or her property.

See In re Ryan Inv. Co.. Inc.. 335 S.C. 392, 517 S.E.2d 692

(1999) (holding postal regulations do not excuse non-compliance with tax sale statute's restricted delivery requirements for notice); Dibble v. Bryant. 274 S.C. 481, 265 S.E.2d 673 (1980) (holding statutory notice requirements were not met when a tax collector tacked a notice of sale

in name of prior owner to front of an abandoned building); Aldridge v. Rutledge. 269 S.C. 475, 238 S.E.2d 165 (1977) (finding the failure to provide notice to true owner is not excused, regardless of actual notice); S.C. Fed. Sav. Bank v. Atl. Land Title Co.. 314 S.C. 292, 295, 442 S.E.2d 630, 632 (Ct. App. 1994) (relying on strict construction of the statutory requirements, the Court found notice by certified mail did not comply with the statutory requirement of notice by

registered mail); Donohue v. Ward. 298 S.C. 75, 378 S.E.2d 261 (Ct. App. 1989) (invalidating a tax sale because the twenty-day statutorily required notice was not given prior to advertising the

property for sale).
In this instance, one could argue that by conducting the auction within the county, but using an online platform to conduct the sale substantially complies with the statutory requirements if the

purpose of the statute is achieved.

See Responsible Econ. Dev. v. Florence Consol. Mun.

Planning Comm'n. 2005 WL 7084861 (S.C. Ct. App. Nov. 16, 2005) ("American jurisprudence generally holds substantial compliance is met if the purpose of the statute is achieved."). We are not privy to the exact protections afforded to the taxpayer by requiring the auction be conducted in a certain location, but presume this requirement is to allow the taxpayer the ability to redeem

the property at the sale. If this protection, along with other protections afforded to taxpayers by this statute, remain in effect through use of an online bidding platform, a court could find this method substantially complies the requirements of the statute. However, we are not a court and cannot make determinations of fact in order to resolve this

question.

On. Att'v Gen.. 1990 WL 599346 (S.C.A.G. Dec. 18, 1990) ("[T]his Office cannot

comment upon or find facts . . . ."). Therefore, we advise you seek clarification from a court in order to avoid questions of an invalid sale.

Op. Att'v Gen.. 2006 WL 3877519 (S.C.A.G. Dec.

14, 2006) (stating only a court, not this Office, can make factual determinations).

In the

The Honorable Daniel M. Gregory
The Honorable Maria E. Walls
Page 5

August 3, 2020

alternative, you could seek a clarification from the Legislature through an amendment to section

12-51-50 to specifically allow for the conduct of online tax sales, which many other jurisdictions allow for by statutory law. See eg.. La. Rev. Stat. Ann. § 47:2154; Miss. Code Ann. § 27-41-59; Tenn. Code Ann. § 67-5-2501; Tex. Tax Code Ann. § 34.01. Conclusion Section 12-51-50 mandates tax sales be conducted "at a public auction at the courthouse or other place within the county . . . ."

The plain and ordinary meaning of the terms in this statute

indicate the Legislature likely intended for tax sales to take place at a physical location rather than on an online platform.

However,

given

the

unprecedented

nature of the Covid-19

pandemic, a court could find that conducting a live auction within the county, but allowing bidding through an online platform, substantially complies with the requirements of section 12

51-50 if the taxpayer is provided the same level of protection as he or she would by a live auction conducted in person.

Whether or not a particular method used meets this requirement is

a question of fact and beyond the scope of an opinion of this Office.

Therefore, we strongly

recommend clarification from a court as courts have indicated the requirements of section 12-51 50 shall be strictly enforced.

In the alternative, we suggest you seek a legislative amendment to

the statute specifically allowing for online tax sales.

Sincerely,

Cydney Milling
Assistant Attorney General

REVIEWED AND APPROVED BY:

Robert D. Cook
Solicitor General