Can a South Carolina county add a transportation penny sales tax if it already has a local option tax and a capital project tax?

Official title

Opinion addressing whether a county may adopt a Transportation Penny Tax according to the provisions in Chapter 37, Title 4 if it has already adopted a Local Option Sales Tax, S.C. Code Section 4-10-10 et seq. and a Capital Project Sales Tax, S.C. Code 4-10-300 et seq.

Requester

Requested by Virginia Merck-Dupont Esq., County Attorney for Lancaster County.

Plain-English summary

Lancaster County's attorney asked an expedited question: the county already imposes a Local Option Sales Tax (under § 4-10-10 et seq.) and a Capital Project Sales Tax (under § 4-10-300 et seq.), and the council wanted to know whether it could add a third local penny, a Transportation Penny Tax under Chapter 37 of Title 4. The worry was statutory wording in § 4-10-315, added in 2022, which lets "a county which has imposed by ordinance a sales and use tax in an amount not to exceed one percent... pursuant to this chapter" use Chapter 37 to impose an additional tax. The county feared "a sales and use tax" might mean only one Chapter 10 tax could be on the books before adding the transportation penny.

The Attorney General concluded the county may stack all three. The limiting language in § 4-10-315 is "an amount not to exceed one percent," which caps the rate of each tax, not the number of taxes a county can adopt. Reading the statute in context, the AG found nothing limiting a county that holds multiple Chapter 10 taxes from also adopting a Transportation Penny Tax.

The AG also walked through the history. Before 2022 Act No. 189, a county could not have both a Capital Project Sales Tax and a Transportation Penny Tax at the same time; § 4-37-40 and § 4-10-310 each capped the area at one percent under those schemes. Act 189 struck those bars and added § 4-37-60 (transportation-tax county may add a capital project tax) and § 4-10-315 (the mirror provision). Because § 4-10-310's remaining restriction speaks only to taxes "levied pursuant to this article," not to all of Chapter 10, the AG read § 4-10-315 not to bar a county holding several Chapter 10 taxes from adding a transportation tax. The bottom line: a county can adopt the transportation penny on top of its existing taxes, but only if a majority of voters approve it at referendum.

What this means for you

County councils and county attorneys planning sales-tax measures

The opinion supports stacking a Transportation Penny Tax under Chapter 37 on top of an existing Local Option Sales Tax and Capital Project Sales Tax under Chapter 10. The AG read the "not to exceed one percent" language as a per-tax rate cap, not a limit on how many such taxes a county may hold. Any new tax still depends on a successful referendum.

Voters in counties weighing a transportation tax

The decision to add a transportation penny runs through the ballot. The AG was explicit that a county cannot adopt one of these sales and use taxes unless a majority of the qualified electors voting in the referendum approve it.

Anyone tracking what changed in 2022

Before 2022 Act No. 189, the capital project tax and the transportation tax could not coexist in the same county area. Act 189 removed that bar and added the provisions (§ 4-37-60 and § 4-10-315) that now let counties combine them. This opinion reads those amendments as permitting the broader stacking Lancaster County asked about.

Common questions

Q: Can a South Carolina county have three local sales and use taxes at once?
A: Per this opinion, yes. The AG concluded a county with a Local Option Sales Tax and a Capital Project Sales Tax may also adopt a Transportation Penny Tax under Chapter 37, subject to voter approval.

Q: Doesn't § 4-10-315 limit a county to one Chapter 10 tax first?
A: The AG said no. The phrase "not to exceed one percent" limits the rate of each tax, not the number of taxes. The AG did not read "a sales and use tax... pursuant to this chapter" as restricting counties that already hold more than one Chapter 10 tax.

Q: What did 2022 Act No. 189 change?
A: It struck the provisions that previously barred a county from having both a Capital Project Sales Tax and a Transportation Penny Tax, and it added § 4-37-60 and § 4-10-315 so a county with one can adopt the other.

Q: Does the county council just vote these taxes in?
A: No. The opinion stresses that a county may not adopt one of these sales and use taxes unless a majority of the qualified electors voting in a referendum approve it.

Q: Is each tax still capped at one percent?
A: Yes. The recurring "not to exceed one percent" language caps each individual tax's rate. The opinion's point is that having several such one-percent taxes is permitted.

Background and statutory framework

Chapter 10 of Title 4 authorizes several county sales and use taxes, including the Local Option Sales Tax (Article 1), the Capital Project Sales Tax Act (Article 3), the Education Capital Improvements Sales and Use Tax Act (Article 4), and the County Green Space Sales Tax Act (Article 10, added by 2022 Act No. 166). Chapter 37 of Title 4 authorizes the Transportation Penny Tax, the sole sales and use tax in that chapter.

Section 4-10-315, added by 2022 Act No. 189, provides that "[n]otwithstanding Section 4-10-310, Section 4-37-40, or any other provision of law," a county that has imposed a one-percent sales and use tax "pursuant to this chapter" may use Chapter 37 to impose an additional one-percent tax. Act 189 also added the mirror provision § 4-37-60 and struck the older language in § 4-37-40 and § 4-10-310 that had prohibited a county area from being subject to more than one percent under those schemes at once.

The AG applied standard construction canons: ascertain legislative intent (Mitchell v. City of Greenville), treat plain text as the best evidence of that intent (Hodges v. Rainey), give the statute a practical and fair reading (State v. Henkel), and construe statutes on the same subject in pari materia to produce a harmonious result (Penman v. City of Columbia). From that, the AG read the one-percent language as a rate cap and concluded the stacking Lancaster County proposed is allowed, subject to referendum.

Citations and references

Statutes:
- S.C. Code Ann. § 4-10-315 (county with a Chapter 10 one-percent tax may use Chapter 37 to add a transportation tax)
- S.C. Code Ann. §§ 4-10-10 et seq. (Local Option Sales Tax, Article 1)
- S.C. Code Ann. §§ 4-10-300 et seq.; § 4-10-310 (Capital Project Sales Tax Act, Article 3)
- S.C. Code Ann. §§ 4-37-30 et seq. (Chapter 37 Transportation Penny Tax)
- S.C. Code Ann. § 4-37-40 (former cap barring more than one percent under the relevant schemes)
- S.C. Code Ann. § 4-37-60 (transportation-tax county may add a capital project tax; added by Act 189)
- 2022 Act No. 189 (struck the cross-bars; added §§ 4-10-315 and 4-37-60); 2022 Act No. 166 (County Green Space Sales Tax Act)

Cases:
- Mitchell v. City of Greenville, 411 S.C. 632, 770 S.E.2d 391 (2015) (ascertain legislative intent)
- Hodges v. Rainey, 341 S.C. 79, 533 S.E.2d 578 (2000) (plain text is best evidence of intent)
- State v. Henkel, 413 S.C. 9, 774 S.E.2d 458 (2015) (practical, reasonable, fair interpretation)
- Penman v. City of Columbia, 387 S.C. 131, 691 S.E.2d 465 (2010) (statutes in pari materia construed together)

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/opinion-addressing-whether-a-county-may-adopt-a-transportation-penny-tax-according-to-the-provisions-in-chapter-37-title-4-if-it-has-already-adopted-a-local-tax-under-s-c-code-sections-4-10-10-et-seq-and-4-10-300-et-seq/
• Original PDF: https://www.scag.gov/media/dr1mfuws/03426715.pdf

Original opinion text

I

Alan Wilson
Attorney General

October 3 1 , 2023

Virginia L. Merck-Dupont, Esq.
County Attorney

Lancaster County

101 N. Main St.
Lancaster, SC 29720

Dear Ms. Merck-Dupont:

Attorney General Alan Wilson has referred your letter to the Opinions section. Your letter
states the following:

I am writing you today to request an expedited opinion regarding the ability for a
County to impose three local sales and use taxes at one time. Currently Lancaster
County has a Local Option Sales Tax imposed pursuant to S.C. Code Ann. 4-10-10

et seq. In addition, the County has imposed a Capital Project Sales Tax following a
successful referendum in accordance with S.C. Code Ann. 4-10-310 et seq. The
current Capital Project Sales Tax is set to expire in 2028 but County Council is
contemplating proceeding with the imposition of another penny provided there is a
successful referendum. As such, Lancaster County currently has two local sales and

use taxes on the books. County Council is contemplating a third local sales and use

tax in the form of the Transportation Penny pursuant to S.C. Code Ann. 4-37-30 et
seq. and our intention is to make sure that a possible third local sales and use tax is
allowed pursuant to the South Carolina Code.
In May 2022, the Governor signed into law Act No. 189 which added S.C. Code
Ann. 4-37-60 to provide that a county that has imposed a tax pursuant to Chapter

37, Title 4 (the Transportation Tax) might also impose a Capital Projects Sales and
Use Tax. That Act further added S.C. Code Ann. 4-10-315 which would provide
that a County that has imposed another sales and use tax also may impose a tax
pursuant to Chapter 37, Title 4. In looking at this Act and the new sections of the
Code which were added, it seems apparent that the legislature has allowed for the
imposition of both a Transportation Tax and a Capital Projects Sales and Use Tax.
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Virginia L. Merck-Dupont, Esq.
Page 2

October 3 1 , 2023

What gives Lancaster County concern, however, is the language in S.C. Code Ann.
4-10-315 which was added and states: “Notwithstanding Section 4-10-310, Section
4-37-40, or any other provision of law, a county which has imposed by ordinance
a sales and use tax in an amount not to exceed one percent within its jurisdiction

pursuant to this chapter may utilize the provisions of Chapter 37, Title 4 to impose
an additional sales and use tax in an amount not to exceed one percent within its
jurisdiction.” Again, it seems apparent that both a Capital Projects Sales Tax and
Transportation Tax may be imposed at the same time, but what is less clear for

Lancaster County is whether the Local Option Sales Tax and the Capital Projects

Sales Tax, both authorized under Title 4, Chapter 10 can be in place and then the
Transportation Penny authorized under Title 4,

Chapter 37 be imposed -

particularly in light of the language that states “a county which has imposed by
ordinance a sales and use tax in an amount not to exceed one percent . . . may utilize
the provisions of Chapter 37, Title 4 to impose an additional sales and use tax in an

amount not to exceed one percent within its jurisdiction.” (emphasis upon the use

of “a” sales tax under Chapter 10, Title 4).
According to information received by Lancaster County, when the legislation was
being discussed by the General Assembly, it was a common reference that this
legislation would allow for two pennies at the local level, but the County also

recognizes that may have been more focused on the ability to have the two pennies
for capital projects and transportation and not considered the other penny in the

local option sales tax. Lancaster County’s concern is that the state of the law and
more particularly, the language included in the newly added S.C. Code Ann.,
particularly in 4-10-315 may limit the County to only imposing one local sales and
use tax under Title 4, Chapter 1 0 (either the local option sales tax or the capital

penny sales tax) and the transportation penny.
The County is aware that several other counties currently do or are in the process
of imposing a third penny, however, the County also recognizes that those counties

do not have the local options sales tax, the transportation tax and the capital penny
sales tax - those counties that already have three taxes have the local option sales

tax, transportation tax and education capital improvement tax and the one
considering has the capital penny and the education capital penny. While Lancaster
County recognizes that the education capital improvement tax is included under
Title 4, Chapter 10 similar to the local option sales tax and capital improvement
tax, does the fact that the education capital improvement tax is imposed by the

school district as opposed to the County Council change the nature of the imposition

Virginia L. Merck-Dupont, Esq.
Page 3
October 3 1 , 2023

of more than two 1% penny taxes at the local level and thus allow for the three
pennies which exist in certain counties?

Law/Analysis

It is this Offices opinion that a county which has adopted both a Local Option Sales Tax,

S.C. Code § 4-10-10 et seq., and a Capital Project Sales Tax, S.C. Code § 4-10-300 et seq., may
also adopt a sales and use tax to finance transportation facilities (“Transportation Penny Tax”)
according to the provisions in Chapter 37, Title 4 of the South Carolina Code of Laws.
Your letter’s stated concern is that section 4-10-315 may prohibit a county from adopting
a Transportation Penny Tax if it had previously adopted more than one local sales and use tax.
Section 4-10-315 is codified within Article 3, Chapter 10, Title 4 which contains the provisions of
the Capital Project Sales Tax Act. It states:

Notwithstanding Section 4-10-310, Section 4-37-40, or any other provision of law,

a county which has imposed by ordinance a sales and use tax in an amount not to
exceed one percent within its jurisdiction pursuant to this chapter may utilize the
provisions of Chapter 37, Title 4 to impose an additional sales and use tax in an
amount not to exceed one percent within its jurisdiction.

S.C. Code § 4-10-315 (emphasis added). The reference in section 4-10-315 to a sales and use tax
imposed “pursuant to this chapter,” could be seen as a potential limitation for the counties because
Chapter 10 of Title 4 contains several chapters authorizing sales and use taxes and development

fees.1 If “a sales and use tax” is interpreted to mean “only one” sales and use tax, a county that
adopted any combination of sales and use taxes authorized under Chapter 10 of Title 4 would be
prohibited from later adopting a Transportation Penny Tax until only one such tax remains
effective.

This opinion, therefore, will analyze the statute according to the principles of statutory
construction. When interpreting a statute, the primary goal is to determine the General Assembly’s

intent. See Mitchell v. City of Greenville, 411 S.C. 632, 634, 770 S.E.2d 391, 392 (2015) (“The
cardinal rule of statutory interpretation is to ascertain and effectuate the legislative intent whenever
possible.”). Where a statute’s language is plain and unambiguous, “the text of a statute is
considered the best evidence of the legislative intent or will.” Hodges v. Rainey, 341 S.C. 79, 85,
533 S.E.2d 578, 581 (2000). Further, “[a] statute as a whole must receive a practical, reasonable

1 Your letter mentions several sales and use taxes which are codified in Chapter 10, Title 4; namely Article
1- Local Option Sales Tax; Article 3- Capital Project Sales Tax Act; Article 4- Education Capital
Improvements Sales and Use Tax Act. Additionally, the General Assembly recently passed another such
sales and use tax within this chapter at Article 10, the “County Green Space Sales Tax Act.” 2022 Act No.
166.

Virginia L. Merck-Dupont, Esq.
Page 4

October 3 1 , 2023

and fair interpretation consonant with the purpose, design, and policy of lawmakers.” State v.
Henkel, 413 S.C. 9, 14, 774 S.E.2d 458, 461 (2015), reh’g denied (Aug. 5, 2015). Where statutes

deal with the same subject matter, it is well established that they “are in pari materia and must be
construed together, if possible, to produce a single, harmonious result.” Penman v. City of
Columbia, 387 S.C. 131, 138,691 S.E.2d 465,468 (2010).

The plain language of section 4-10-315 suggests the General Assembly intended for the
statute to allow those counties that had already adopted a Capital Projects Sales Tax “pursuant to”
Chapter 10 to adopt a Transportation Penny Tax.

The limiting language within the text of the

statute itself is “an amount not to exceed one percent.” Id. This limitation applies to both “a sales
and use tax” adopted under Chapter 10 and the “additional” sales and use tax under Chapter 37.
This language does not, however, modify the number of sales and use taxes adopted. The phrase
“an amount not to exceed one percent” appears to describe and reinforce the maximum tax
percentage allowed under those separate sales and use tax statutory schemes.
Moreover, the related statutes and legislative history suggest that section 4-10-315 was
meant to mirror the provisions in section 4-37-60 which allowed a county that had previously

adopted a Transportation Penny Tax to adopt an additional Capital Projects Sales Tax. Section 410-315 was adopted in 2022 as part of Act Number 1 89. In relevant part, the title of the act states

it was adopted with the intent “TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING ... SECTION 4-10-315 SO AS TO PROVIDE THAT A COUNTY THAT
HAS

IMPOSED

ANOTHER SALES

AND

USE TAX ALSO

MAY IMPOSE A TAX

PURSUANT TO CHAPTER 37, TITLE 4.” 2022 Act No. 189. Prior to the adoption of Act 189,

no portion of any county could be subject to both a Capital Project Sales Tax and a Transportation
Penny Tax. As previously codified, section 4-37-40 stated, “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.”

S.C. Code § 4-37-40 (2021) (emphasis added).2 Act 189 struck the portions in both statutes that
prohibited adopting the other tax.3 Act 189 also added section 4-37-60 to explicitly permit a
county, which has adopted a Transportation Penny Tax, to also adopt a Capital Project Sales Tax.

Notwithstanding Sections 4-10-310 and 4-37-40, or any other provision of law, a
county which has imposed by ordinance a sales and use tax in an amount not to
exceed one percent within its jurisdiction pursuant to this chapter may utilize the
provisions of Article 3, Chapter 10, Title 4 to impose an additional sales and use

tax in an amount not to exceed one percent within its jurisdiction.

2 See also S.C. Code §4-10-310 (202 1 ) (“However, at no time may any portion of the county area be subject
to more than one percent sales tax levied pursuant to this article, pursuant to Chapter 37, Title 4, or pursuant
to any local law enacted by the General Assembly.”) (emphasis added).

3 See 2022 Act No. 189, §§2,3.

Virginia L. Merck-Dupont, Esq.
Page 5
October 31, 2023

S.C. Code § 4-37-60 (Supp. 2023) (emphasis added).’1 Unlike section 4-10-315, this statute does
not reference any sales and use taxes codified within Chapter 10 of Title 4 other than the Capital

Project Sales Tax.5 Its plain language clearly permits adopting a Capital Project Sales Tax with
the limitation that it “not . . . exceed one percent.” Because the related statutes adopted in Act 1 89
struck restrictions on having a Capital Projects Sales Tax and a Transportation Penny while also

making no mention of other sales and use taxes in Chapter 10 of Title 4, it seems unlikely that the
General Assembly intended for the phrase “a sales and use tax [imposed]... pursuant to this
chapter” in section 4-10-315 to restrict counties that have other sales and use taxes.

Indeed, had

the legislature intended for this phrase to restrict counties from adopting more than one sales and

use tax authorized in Chapter 10, the amendment to section 4-10-310 in Act 189 would likely
contain a restriction similarly reflecting this intent.

However, the restriction in section 4-10-310

is only concerned with “sales tax levied pursuant to this article” and local laws previously passed
by the General Assembly. S.C. Code § 4-10-310 (Supp. 2023). Because section 4-10-310 restricts
Capital Project Sales Taxes adopted pursuant to Article 3, Chapter 10, Title 4, rather than all sales
and use taxes in Chapter 10, Title 4, this Office docs not read section 4-10-315 as a prohibition on
counties that have adopted more than one sales and use tax authorized under Chapter 10, Title 4.

Therefore, it is this Office’s opinion that a court would likely construe section 4-10-315 to allow
a county that has adopted a Capital Project Sales 'fax to also adopt a Transportation Penny Tax
even if the county has also adopted other sales and use taxes codified in Chapter 10 of Title 4.

Conclusion

As is discussed more fully above, it is this Offices opinion that a county which has adopted
both a Local Option Sales fax, S.C. Code § 4-10-10 et seq., and a Capital Project Sales Tax, S.C.
Code § 4-10-300 et seq., may also adopt a sales and use tax to finance transportation facilities
(“Transportation Penny Tax”) according to the provisions in Chapter 37, Title 4 of the South

Carolina Code of Laws. A county seeking to adopt one or more of these sales and use taxes may
not do so unless a majority of the qualified electors voting in the referendum approve it.
Sincerely,

Matthew Houck
Assistant Attorney General

4 2022 Act No. 189, § 1.
? Because the Transportation Penny Tax is the sole sales and use tax in Chapter 37 of Title 4, the parallel

reference in section 4-37-60 to a sales and use tax adopted "pursuant to this chapter does not implicate any
other sales and use taxes.

Virginia L. Merck-Dupont, Esq.
Page 6
October 3 1 , 2023

REVIEWED AND APPROVED BY:

J

Robert D. Cook
Solicitor General