Could a South Carolina county tax a nonresident's rental property business merely because the property was inside the county?

Plain-English summary

The South Carolina Attorney General's office considered whether a county could impose a business license tax on people who lived elsewhere but owned rental property inside that county. The requester said the rental transactions occurred outside the taxing county. The office answered at the level of a general rule: a county could tax a nonresident who performed an act or engaged in an occupation within its borders. A particular owner's liability depended on what that person or business actually did inside the county.

The letter relied on a prior opinion about a nonresident real estate agent. That opinion distinguished advertising property entirely from an outside office from showing, listing, advertising, or soliciting buyers within the taxing locality. The AG's office declined to decide the rental owner's facts and recommended asking the appropriate Sumter County officials whether the described activities amounted to doing business there.

Currency note

This opinion was issued in 1999. 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 outside the county prevent a business license tax? A: No. The office said that a county could tax nonresidents engaged in business or an occupation within its boundaries. It treated the place of activity, rather than the owner's residence, as the relevant inquiry.

Q: Did owning rental property inside the county automatically settle the tax question? A: The opinion did not say so. It made a particular license tax depend on the owner's activities within the county and declined to decide those facts in the request.

Q: What local activity did the earlier real estate opinion discuss? A: It contrasted advertising from an outside office with active local showing, listing, advertising, or solicitation. The 1999 letter used that example to explain why the full pattern of activity mattered.

Q: Who did the office suggest could review the particular rental owner's activities? A: The letter recommended contacting the appropriate Sumter County officials to determine whether those activities amounted to doing business in the county.

Background and statutory framework

The requester asked about owners who lived in one county, owned rental property in another, and completed rental transactions outside the county seeking the tax. The letter quoted the county taxing authority as applying to persons and businesses engaged, or intending to engage, in business “in whole or in part, within the county outside the corporate limits of a municipality.” The office applied that territorial limit to nonresidents and referred to its January 7, 1988 opinion about a realtor's local activities. It expressly called the particular tax question factual and beyond the scope of a legal opinion. The letter was an informal opinion by the signing assistant attorney general.

Citations and references

• County taxing provision: The opinion quotes the authority to levy uniform license taxes for business conducted in whole or in part within the county, outside municipal limits.
• Prior AG opinions: January 7, 1988, on a nonresident realtor's local activities; December 12, 1983, on the factual character of a particular license tax question.

Official title

Asking whether it is appropriate for a county to impose a business license tax on individuals who reside in one county but own rental property in the county imposing the tax.

Requester

The Honorable John C. Land, III, Senate Majority Leader

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/may-19-1999/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/11/99may19land.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLES M . C OND ON
ATTORNEY GENERAL

May 19, 1999

The Honorable John C. Land, III
Senate Majority Leader
South Carolina Senate
P.O. Box 142
Columbia, South Carolina 29201

RE:

Informal Opinion

Dear Senator Land:
Attorney General Condon has forwarded your opinion request to me for reply. You have asked whether it is appropriate for a county to impose a business license tax on individuals who reside in one county but own rental property in the county imposing the tax. You note that while all rental transactions are completed outside the county imposing the tax, the property being rented is physically located within the county where the tax is imposed. The counties' authority to impose business license taxes is found in Section 4-930(12) of the South Carolina Code of Laws. In this Section, the General Assembly has granted county governing bodies the power "[t]o levy uniform license taxes upon persons and businesses engaged in or intending to engage in a business, occupation, or profession, in whole or in part, within the county outside the corporate limits of a municipality .... " The prevailing rule that ordinances of a general nature are binding upon all persons within the corporate area, whether residents are not, and upon all property within the corporate boundaries whether owned by inhabitants or strangers, applies to licensing ordinances. McQuillin, Municipal Corporations, § 26.48 (3rd Ed. 1995). That is to say,

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FACS IMILE : 803- 253-6283

Senator Land
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May 19, 1999

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license requirements and taxes imposed upon all engaging in certain businesses, occupations or activities within the county may be made and generally are binding on residents and nonresidents alike. Id. In addition, the power of a municipal corporation to require licenses of occupations adheres to the place in which the occupations are pursued, and not to the domicile of the person pursuing them. 51 Am.Jur.2d Licenses and Permits § 120 ( 1970). Municipal corporations commonly impose license charges upon nonresidents who perform an act or engage in an occupation within the limits of the licensing municipal corporation. Id. Based on the foregoing, it would not be improper for a county to impose a business license tax upon nonresident persons or businesses if those persons or businesses are engaged in a business or occupation in the county. However, as this Office determined in an opinion dated January 7, 1988, whether the license tax may be levied on a particular person or business is dependent on the activities of the person or business within the county. In this opinion, we were asked whether a county or city may impose a business license fee upon a real tor who does not have an office located in the county or city but travels there for the purpose of selling a piece of property listed with the realtor. After reviewing the prevailing rule on this subject contained in McQuillin, as cited above, the author found: Whether the realtor is subject to the licensing ordinance is dependent upon the realtor's activities within the municipality. It is a factual question of whether such constitutes doing business within the municipality. In example, if the nonresident realtor advertises the property from his nonresident office and has no activity within the municipality, then such would not constitute doing business. Should the realtor, however, actively participate in the showing, listing, advertising or other solicitation of buyers within the municipality, then under such circumstances, the realtor would most probably be doing business within the municipality and subject to its license fees. In Pee De~ Chair Co. v. City of Camden, 165 S.C. 86, 162 S.E. 771, the court held that: "it is not always an easy matter to give a satisfactory definition of 'business' or 'occupation,' as used in a statute or ordinance like the one before us, but the terms ordinarily carry with them some idea of custom or continuity as opposed to an isolated or sporadic act." It is thus apparent that it is the total activity of the realtor that must be reviewed to determine whether the activity constitutes doing business within

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Senator Land
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May 19, 1999
the intent and meaning of the municipal ordinance. (footnote omitted).

Whether a nonresident realtor is subject to a municipal license tax is dependent upon the activities of the realtor within the municipality. If the same is the showing, listing, advertising or other solicitation of buyers, there is in most probability a sufficient activity to constitute doing business.

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Since the question ofwhether the realtor's activities constituted doing business within the municipality was a factual one, the author suggested that the realtor review the matter with the municipal office charged with the duty of issuing the license. Depending on the facts, the sale of a single property could be isolated or constitute an extensive business activity within the city. Whether it is appropriate for a county to levy a business license tax in a particular case is a factual question beyond the scope of a legal opinion of this Office. Op. Alli:::· Gen. dated December 12, 1983. As a general rule, a county may impose a business license tax upon nonresidents who perform an act or engage in an occupation within the county limits. However, as noted in the January 7th opinion, in a questionable case, the activities of a person or business must be reviewed to determine whether those activities constitute doing business within the county. Thus, we would recommend contacting the appropriate Sumter County officials to determine whether the particular activities described in your opini·on request constitute doing business within the county.

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This letter is an informal opinion only. It has been written by a designated assistant attorney general and represents the position of the undersigned attorney as to the specific questions asked. It has not, however, been personally scrutinized by the Attorney General nor officially published in the manner of a formal opinion. With kindest regards, I remain Very truly yours,

73J.K_j

Paul M. Koch
Assistant Attorney General