Could a disabled veteran’s surviving spouse claim the South Carolina home-tax exemption if the veteran never owned the house?

Plain-English summary

In 2020, the South Carolina Attorney General agreed with the Department of Revenue that a surviving spouse's disabled-veteran property tax exemption depended on acquiring a house from a veteran who was an eligible owner. It read “acquired from” as requiring the veteran to have owned or co-owned the property before death.

The office also relied on Administrative Law Court decisions holding that the veteran must have applied for and received the exemption on that house. For a subsequently acquired house to qualify, the spouse first had to acquire an exempt house from the deceased veteran. The opinion treated the Department of Revenue as the agency charged with deciding exemption claims, subject to the statute's plain language.

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 living in a house make it eligible if the veteran was never an owner?
A: The opinion said no. It read the statute and an administrative decision as requiring the surviving spouse to acquire the house from a veteran who owned it.

Q: Was the veteran’s disability alone enough for the spouse’s exemption?
A: The AG said no. It relied on a decision requiring the veteran to have qualified as an eligible owner and to have applied for and received the exemption.

Q: Could a later replacement home qualify automatically?
A: No. The office said the spouse first had to acquire an exempt home from the deceased veteran before a subsequently acquired home could qualify.

Background and statutory framework

The opinion interpreted the surviving-spouse language of the then-existing property-tax exemption and followed the Department of Revenue's reading. It discussed administrative decisions denying exemptions where the veteran had never owned the home or had never obtained the exemption.

Citations and references

The legal authorities and conclusion summarized above appear in the linked official opinion, issued in 2020.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/december-21-2020-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2020/12/02455536.pdf

Original opinion text

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Alan Wilson
Attorney General

December 21, 2020

Stanley A. Foreman

Director of Division of Administrative Services
South Carolina Department of Veteran's Affairs
1205 Pendleton Street
Suite 369
Columbia, South Carolina 29201

Dear Mr. Foreman:

We received your letter addressed to Attorney General Alan Wilson requesting an opinion of this Office regarding the "application of S.C. Code Ann. Section 12-37-220 to property tax exemption

for qualified surviving spouses of Veterans who had been rated permanently and totally disabled as a result of a service-connected disability." Law/Analysis

According to section 12-37-210 of the South Carolina Code (2014) "[a]ll real and personal

property in this State . . . shall be subject to taxation" unless expressly exempted by the legislature. By way of section 12-37-220 of the South Carolina Code (2014 & Supp. 2019), the legislature exempted certain property from taxation including "the house owned by an eligible owner in fee

or jointly with a spouse ..." and "the house owned by a qualified surviving spouse acquired from the deceased spouse and a house subsequently acquired by an eligible surviving spouse."

Code Ann. §§ 12-37-220(B)(l)(a) & (b) (2014).

S.C.

Section 12-37-220 continues on to define

"eligible owner" as including "a veteran of the armed forces of the United States who is

permanently and totally disabled as a result of a service-connected disability and who files with the Department of Revenue a certificate signed by the county service officer certifying this disability" and "qualified surviving spouse" as "the surviving spouse of an individual described in subsubitem (i) while remaining unmarried, who resides in the house, and who owns the house in fee or for life." S.C. Code Ann. § 12-37-220(B)(l)(e). In your letter, you informed us that "the South Carolina Department of Revenue has interpreted the statute to require that the house be owned or co-owned by the Veteran prior to death for this benefit to transfer on the surviving spouse." Initially, we note, this Office generally "defers the

interpretation of administrative questions to administrative agencies within their jurisdiction." Op. Att'v Gen.. 2018 WL 1 160093 (S.C.A.G. Jan. 9, 2018). By section 12-4-710 of the South Carolina Code (2014), the legislature provides "[ejxcept for the exemption provided by Section 12-37-

220(A)(9), the department shall determine if any property qualifies for exemption from local RembertC. Dennis Building

.

Post Office Box 11549

• Columbia, SC 2921 1-1549

. Telephone 803-734-3970

. Facsimile 803-253-6283

Stanley A. Foreman
Page 2

December 21, 2020

property taxes under Section 12-37-220 in accordance with the Constitution and general laws of this State." Accordingly, we recognize the legislature's express desire that the Department of Revenue (the "Department") determine whether an exemption applies. Thus, we will defer to such authority unless it is contrary to the plain language in the statute. With this deference in mind, we follow the two-step process of interpreting statutes administered by an agency as expressed by our Supreme Court. "First, a court must determine whether the

language of a statute or regulation directly speaks to the issue. If so, the court must utilize the clear meaning of the statute or regulation." Kiawah Dev. Partners. II v. S.C. Dep't of Health & Envtl. Control. 41 1 S.C. 16, 32, 766 S.E.2d 707, 717 (2014). We believe that section 12-37-220(B) does speak to the ability of a surviving spouse of a disabled veteran to receive a property tax exemption on his or her house. Section 12-37-220(B)(l)(b) specifically states "the house owned by a qualified surviving spouse acquired from the deceased spouse and a house subsequently acquired by an eligible surviving spouse" is eligible for a property tax exemption. From the plain language of this statute, we believe

"acquired from" indicates the house was owned by the disabled veteran prior to his or her death as the surviving spouse could not acquire from the disabled veteran a house he or she did not own. Moreover, recent Administrative Law Court ("ALC") cases indicate in order for a house "subsequently acquired by an eligible surviving spouse" to qualify for the exemption, the surviving spouse must first acquire a house from the disabled veteran who was not only eligible for the exemption, but also applied for and received the exemption for the house.

In 2000, the ALC considered whether a surviving spouse was entitled to an exemption for a house

that was never owned by her husband, a disabled veteran. Watson v. S.C. Dep't of Rev.. 2000 WL 147506 (S.C. Admin. Law Judge Div. 2000). The wife and her brother originally owned the house, although her husband lived in it. Id. Hurricane Hugo destroyed the house, but the husband and wife continued to live in a trailer on the property while the house was rebuilt. Id. The new house

was not completed until after the husband died. Id The ALC considered the requirements under section 12-37-220(B)(l) in determining the wife was not entitled to an exemption. First, the ALC found that because the husband was never named on the deed, she "did not establish that her husband owned the Property 'in fee or for life, or jointly with [his] spouse'" as required under section 12-37-220(B)(l)(a). Id (quoting S.C. Code Ann. § 12-37-220(B)(l)(a)). In addition, the

ALC determined because the husband never owned the property, his wife "could not have 'obtain[ed] by devise' any land or dwelling at the Property from her husband." Id. (quoting S.C. Code Ann. § 12-37-220(B)(l)). Lastly, the ALC concluded "Taxpayer did not identify a 'dwelling' at the Property that would qualify for the property tax exemption under § 12-37220(B)(1)." Id (quoting S.C. Code Ann. § 12-37-220(B)(l)). The ALC also noted because the husband never owned the property and did not pay property tax on it, he would not have been

entitled to an exemption. Id The ALC reasoned "[s]ince Taxpayer's husband was not entitled to a property tax exemption under § 12-37-220(B)(l), Taxpayer is not entitled to that property tax exemption." Id. Accordingly, the ALC held

Stanley A. Foreman
Page 3
December 2 1 , 2020

[unquestionably, Taxpayer's husband did not own the property "in fee or for life, or jointly with [his] spouse." Also, Taxpayer could not have "obtain[ed] by devise" any interest in the Property from her husband. Although unfortunate, the language of the statute cannot be strained or liberally construed in favor of Taxpayer. Consequently, I find that Taxpayer is not entitled to the claimed exemption under § 12-37-220(B)(l). Id. In a subsequent decision, the ALC further concluded a surviving spouse was not entitled to an exemption when her husband never applied for or received a disabled veteran property tax exemption. Cromey v. S.C. Dep't of Rev.. 2018 WL 4208256 (S.C. Admin. Law Judge Div. 2018).

The Department took the position that because the husband never filed the certificate certifying his disability with the Department, he was not an eligible owner. Id. Therefore, the wife could not be a qualified surviving spouse because "she was not the spouse of an 'eligible owner.'" Id. The ALC agreed with the Department, citing to the portion of the definition of "eligible owner" stating he or she is one "who files with the Department of Revenue a certificate signed by the county service officer certifying this disability." Id. (quoting S.C. Code Ann. § 12-37220(B)(l)(e)(i)). Because the "qualified surviving spouse" must be the spouse of an eligible owner, if the husband is not an eligible owner, wife cannot be a "qualified surviving spouse." IT Moreover, the ALC determined "for the exemption to be claimed on a subsequent house, the surviving spouse had to first acquire an exempt house from the deceased veteran spouse." Id. Conclusion

We agree with the Department's interpretation that in order for a surviving spouse to claim an exemption under section 12-37-220, he or she must acquire the house from a disable veteran who

qualifies as an eligible owner.

We also agree with the ALC's analysis and believe the disabled veteran must not only have owned or partly owned the house prior to his or her death, he or she

must applied for and received an exemption for the house. Moreover, for any house subsequently acquired by a surviving spouse to be eligible, the surviving spouse must first acquire an exempt house from the deceased veteran spouse.

Sincerely,

Cydney Milling
Assistant Attorney General

Stanley A. Foreman
Page 4

December 21, 2020

REVIEWED AND APPROVED BY:

Robert D. Cook
Solicitor General

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