Could a South Carolina mayor promise lower business license taxes to attract annexation without council approval?

Plain-English summary

Several businesses said they had annexed into Santee after its former mayor promised lower business license taxes. The council had not voted on the promise, and a later ordinance changed the tax rate. The 2000 informal opinion said the mayor could not bind the town by acting alone on a tax power vested in the council.

The AG also considered whether the mayor's representations could reopen a challenge to an annexation that had occurred years earlier. It found that unlikely, given the statutory contest periods and a state court ruling limiting estoppel based on an official's unauthorized acts. It noted that a court retained power to reach a just result and suggested a declaratory judgment for a final answer.

Currency note

This opinion was issued in 2000. 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: Could the mayor lower a business license tax without a council vote?
A: The AG said no. The municipality's taxing power was exercised through council, of which the mayor was one member.

Q: Could council simply ratify different rates for the businesses?
A: The opinion did not approve that. It warned that unequal application of the business license tax would raise equal-protection concerns, while saying the request lacked details.

Q: Did the former mayor's promise reopen the annexation contest period?
A: The AG thought a court was unlikely to permit a challenge years later on that basis, but acknowledged a court could reach a different result.

Background and statutory framework

The letter read the municipal taxing authority with the rule vesting municipal powers in council. It then considered the contest periods for annexation and the limits of equitable estoppel against a municipality based on an officer's actions. The AG suggested a declaratory judgment to resolve the case finally; it did not issue a binding ruling on the businesses' claims.

Citations and references

• DeStephano v. City of Charleston, on estoppel based on public officers' acts.
• Myrtle Wiggins v. Edwards, on a defendant's conduct inducing delay.

Official title

Regarding the actions of a previous mayor.

Requester

Thomas Ray Sims, Esquire

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/october-9-2000-1/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/11/00oct9sims.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLIE CONDON
ATIORNEY GENERAL

October 9, 2000
Thomas Ray Sims, Esquire
Santee Town Attorney
Post Office Box 2016
Orangeburg, South Carolina 29116

RE: Informal Opinion
Dear Mr Sims:
As the attorney for the Town of Santee, you have requested an opinion of this Office regarding the actions of a previous mayor. By way of background, you have provided the following information: The Town of Santee recently passed a valid ordinance changing the rate for their business license tax. Upon receiving notice of the fee, several business objected on the basis of the written representations of the previous mayor, who stated that if they annexed into the city, he would grant them a business license reduction. The Town Council has not voted on this issue, nor is there a record of any discussion of the matter during the meetings. Specifically, you now ask: 1) Whether the mayor may unilaterally offer business license reductions as an incentive to get businesses to annex into the Town without Town Council knowledge; and 2) Whether the fact that the businesses allege that they annexed into the town based on these representations would toll South Carolina Code Section 5-3-270, which states the time limit in which one may contest annexation. The statutes primarily governing the powers of municipalities are found in Title 5. South Carolina Code of Laws Section 5-7-30 confers upon a municipality the power to "levy a business license tax on gross income." Furthermore, Section 5-7-160 provides:

l~~r ~~~INC • PosT Ol·FICE Box 11549 • Cou_:~1fl!A. S.C. 29211-1549 • Ti'Llol'llONE: 803-734-]970 • F\C~IMll.to: 803-253-6283

Thomas Ray Sims, Esquire
October 9, 2000
Page 2of3
All powers of the municipality are vested in the council, except as otherwise provided by law, and the council shall provide for the exercise thereof and for the performance of all duties and obligations imposed on the municipality by law. A majority of the total membership of the council shall constitute a quorum for the purpose of transacting council business. Finally, Section 5-9-20 states that in "the mayor-council form of government there shall be a municipal council composed of a mayor and not less than four council members." Read together these statutes prohibit any one member of council from exercising a power vested in the municipality. Because the levying of the business license tax on gross income is an express power of the municipality, the municipality carries out its powers through the council, and the mayor is only one member of council, the mayor cannot act unilaterally to bind the municipality in decisions concerning the levying of the business license tax. Moreover, action by the council ratifying the mayor's representations could be problematic, as well. Although the details are not addressed by your letter, disparate application of business license tax among businesses of a municipality invariably raises equal protection concerns. See, e.g., Eli Witt Co. v. City of West Columbia, 309 S.C. 555, 425 S.E.2d 16 (1992); Thomson Newspapers Inc. v. Citv of Florence, 287 S.C. 305, 338 S.E.2d 324 (1985). Your second question concerns the version of Section 5-3-270 applicable at the time of annexation, which read, in part: When the limits of a city or town shall be ordered extended no contest thereabout shall be allowed unless the interested person shall, within sixty days after the result has been published or declared, file ... his intention to contest... nor unless, within ninety days ... an action shall be begun ... You have informed us that the annexation occurred several years ago, so the sixty and ninety day period for contest has long since passed. Should the businesses contest the annexation because of the mayor's representations, the municipality would likely defend on the basis of Section 5-3-270. However, "[a ]defendant may be estopped from claiming the statute oflimitations as a defense if the delay that otherwise would give operation to the statute had been induced by the defendant's conduct." Myrtle Wiggins v. Edwards, 314 S.C. 126, 442 S.E.2d 169 (1994)(citations omitted). In this instance, the conduct in question was committed by the mayor, not the defendant municipality. The Supreme Court of South Carolina has rejected equitable estoppel as a defense when arising from the actions of a public officer: No estoppel can grow out of dealings with public officers of limited authority, and the doctrine of equitable estoppel cannot ordinarily be invoked to defeat a municipality in the prosecution of its public affairs because of an error or mistake of ... one of its officers or

Thomas Ray Sims, Esquire
October 9, 2000
Page 3of3
agents ....

1

L

DeStephano v. City of Charleston, 304 S.C. 250, 403 S.E.2d 648 (1991) (quoting Farrow v. Citv Council of Charleston, 169 S.C. 373, 168 S.E. 852, (1933)). From the foregoing authority it appears unlikely that a court would now allow a contest of annexation that occurred several years ago based on the mayor's representations before the annexation. However, courts do have the inherent power to do that which is necessary to reach a just result. See Ex parte Dibble, 279 S.C. 592, 310 S.E.2d 440 (Ct. App. 1983). You may wish to seek a declaratory judgement to determine the matter with finality. This letter is an informal opinion only. It has been written by a designated Senior Assistant Attorney General and represents the position of the undersigned attorney as to the specific question asked. It has not, however, been personally scrutinized by the Attorney General nor officially published in the manner of a formal opinion. With kind regards, I remain

Assistant Deputy Attorney General