Could a house owned by a South Carolina corporation or LLC receive the owner-occupied residential property-tax assessment?

Plain-English summary

In 2003, South Carolina's Attorney General said a home owned by a corporation or limited liability company could not receive the legal-residence property-tax classification merely because a shareholder or member occupied it as a primary home. The statute discussed in the opinion required ownership of the residence, in whole or part, by the person occupying it.

The office relied on earlier opinions concerning corporation- and partnership-owned homes. It reached the same conclusion for an LLC because the cited LLC statute said a member was not a co-owner of company property.

Currency note

This opinion was issued in 2003. 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.

Historical summary

Occupants of company-owned homes

The AG distinguished occupying a house from owning the real property. Under the provision it quoted, the legal-residence assessment depended on the occupant's ownership interest, which the described shareholder or LLC member did not hold merely by owning an interest in the entity.

County assessors

The opinion treated the corporation and LLC as the property owners for this question and said prior corporation and partnership opinions supported denying the owner-occupied classification on those facts.

Common questions

Was living in an LLC-owned home enough for the legal-residence rate?
No. The AG said an LLC member did not co-own the LLC's real property simply by being a member.

Did the answer differ for a corporation-owned home?
No. The opinion relied on an earlier AG conclusion that a shareholder-occupied, corporation-owned residence did not qualify.

What ownership did the statute require?
The opinion quoted a rule requiring the legal residence to be owned, totally or partly in fee or by life estate, and occupied by the owner of that interest.

Background and statutory framework

The legislator asked about property held by a corporation or LLC but used by its sole proprietor as a primary residence. Section 12-43-220 set out the legal-residence assessment rule. The AG cited Section 33-44-501 to explain why an LLC member was not a co-owner of LLC property, then applied the earlier entity-ownership opinions.

Citations and references

The opinion discussed Section 12-43-220 and Section 33-44-501.

Official title

Questioning whether for purposes of S.C. Code Ann. Section 12-43-220(c) (Supp. 2002), can real property owned by a corporation of LLC be classified as residential when occupied as the primary residence by the sole proprietor.

Requester

The Honorable Chip Huggins, Member, House of Representatives

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/september-23-2003/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/03/03sept-23-Huggins.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
HENRY M c MAsrER
ATTORNEY GENERAL

September 23, 2003

The Honorable Chip Huggins
Member, House of Representatives
308 Wayworth Court
Columbia, South Carolina 29212
Dear Representative Huggins:
In a letter to this office you questioned whether for purposes of S.C. Code Ann. Section 1243-220( c) (Supp. 2002), can real property owned by a corporation or LLC be classified as residential when occupied as the primary residence by the sole proprietor. Section 12-43-220 states in part

The legal residence .. .when owned totally or in part in fee or by life estate and occupied by the owner of the interest.. .are taxed on an assessment equal to four percent of the fair market value ....

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A prior opinion of this office dated October 25, 1982, a copy of which is enclosed, determined that a residence owned by a corporation and occupied by a shareholder cannot be classified for purposes of Section 12-43-220 as residential property. Another opinion of this office dated January 22, 1985, also enclosed, indicated that a residence owned by a partnership and occupied by a partner would not qualify for the residential classification provided by Section 12-43220( c). A similar conclusion would be had for an LLC. See: S.C. Code Ann. Section 33-44-501 (Supp. 2002) ("A member ...(of a limited liability company) ...is not a co-owner of, and has no transferable interest in, property of a limited liability company.). If there are any questions, please advise.

Charles H. Richardson
Senior Assistant Attorney General
Enclosures

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REMBERT t;:. QENNIS BUD.DING . POST 0 FFICEBox ll 549 . COLUMBIA,S.C.29211 - 1549 . TELEPHON£:803-734-3970 . FACSIMILE:803-25 3-628 3

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