STATEMENT OF THE CASE
In these consolidated cases the Petitioners Edward D. Sloan, Jr., South Carolina Public Interest Foundation, and NOLAS Trading Company, Inc. (collectively the “Petitioners”) seek a refund of real property taxes paid in 2006 and 2007. The Petitioners claim that the millage rates assessed for those years were excessive. The Respondent Greenville County Assessor (the “Assessor”) has made a Motion to Dismiss these actions based upon the contention that Petitioners have not exhausted their administrative remedies as required by the South Carolina Revenue Procedures Act (the “RPA” or the “Act”), S.C. Code Ann. § 12-60-10, et. seq. For the reasons that follow, the Court agrees with the Assessor’s contention and therefore dismisses the above-captioned cases without prejudice.
FINDINGS OF FACT
On March 1 and 19, 2008, the Petitioners sent correspondence to the Assessor protesting the 2006 and 2007 taxes on its real property. On April 8, 2008, the Petitioners wrote the Board of Assessment Appeals c/o of the Greenville County Assessor and stated that they had “received no response and assumed that is equivalent to denial by the Assessor.” On April 21, 2008, the Greenville County Assessor, Auditor and Tax Collector sent a memorandum to the Petitioners stating as follows:
The Greenville County Assessor, Auditor and Tax Collector met on April 18, 2008 to consider your request for tax refund. . . . While the Committee believes it has appropriate jurisdiction to consider this request for a refund, they do not have the authority to determine the issue of excess millage levied by a political subdivision.
Request for refund is denied.
TAX PAYER MAY CONTINUE APPEAL
SC Code 12-60-2560 (B) provides within thirty days after the decision is mailed to the taxpayer on the claim for refund, a property taxpayer may appeal the decision to the County Board of Assessment Appeals.
Two days later (April 23), the Petitioners sent a letter to the Board of Assessment Appeals c/o the Greenville County Assessor stating: “Supplementing our April 8 to you about refund of overpaid 2006 property taxes, enclosed is a copy of the Assessor’s April 21 denial of that claim.” The Petitioners sent an identical letter that same date concerning 2007 taxes. Twenty days later, and before the Board of Assessment Appeals issued any ruling, the Petitioners filed a Notice of Request for Contested Hearing with this Court on May 13, 2008. As of the date of this Order, the Board of Assessment Appeals has not ruled upon the Petitioners’ appeal.
CONCLUSIONS OF LAW
A. The RPA Procedures for Protesting Real Property Taxes
When a taxpayer alleges illegal or wrongful collection of real property taxes, the statutory remedy is for the taxpayer to seek a refund under the procedures described in S.C. Code Ann. § 12-60-2560. In summary those procedures are as follows:
1. Taxpayer files a refund claim with the County Assessor, id. § 12-60-2560(A);
2. The County Assessor, County Treasurer and the County Auditor render a decision on the claim, id.;
3. The Taxpayer has thirty days to appeal that decision to the County Board of Assessment Appeals, id. § 12-60-2560(B); and
4. The County Board of Assessment Appeals renders a decision, id. § 12-60-2560(C).
It is only after all of these steps are taken that a claim is ripe to be appealed to this Court. See S.C. Code Ann. § 12-60-2560(C) (“Within thirty days after the [County Board of Assessment Appeals’] decision is mailed to the taxpayer, a property taxpayer or county assessor may appeal the decision issued by the board by requesting a contested case hearing before the Administrative Law Judge Division.”). If a petitioner does not follow these steps, the RPA requires this Court to dismiss the action without prejudice. S.C. Code Ann. § 12-60-2560(C) (“If a taxpayer requests a contested case hearing before the Administrative Law Judge Division without exhausting his prehearing remedy…, the Administrative Law Judge shall dismiss the action without prejudice.”).
B. The Relevant Case Law
The South Carolina Supreme Court has held in two opinions that under the plain language of the RPA, the administrative remedies and procedures provided by that Act are the exclusive remedy for any claim of “illegal or wrongful collection of taxes.” See Brackenbrook N. Charleston, LP v. Charleston County, 360 S.C. 390, 398-99, 602 S.E.2d 39, 44 (2004) and B&A Develop., Inc. v. Georgetown County, 372 S.C. 261, 265, 641 S.E.2d 888, 890 (2007). As discussed below, those cases also establish that a court must dismiss claims for refunds without prejudice where taxpayers have not exhausted their administrative remedies. Brackenbrook, 360 S.C. at 399, 602 S.E.2d at 44; B&A, 372 S.C. at 266-67, 641 S.E.2d at 891-92.
In Brackenbrook the taxpayers filed an action against Charleston County seeking a refund of their real property taxes. The taxpayers in that case, like the Petitioners in these cases, alleged that they were subject to excessive millage. Brackenbrook, 360 S.C. at 399, 602 S.E.2d at 44. The taxpayers in Brackenbrook filed their action without first exhausting their administrative remedies under the RPA. The lower court held that taxpayers were not required to exhaust their administrative remedies, but the Supreme Court reversed and remanded for the case to be dismissed without prejudice to the petitioners’ rights to pursue exhaustion of those remedies. The Court noted that the purpose of the RPA is “to provide the people of this State with a straight forward procedure to determine any disputed revenue liability.” Brackenbrook, 360 S.C. at 395, 602 S.E.2d at 42 (quoting S.C. Code Ann. § 12-60-20). See also id. at 398, 602 S.E.2d at 44 (“While the Act contains many specific procedures for taxpayers challenging their PTAs, relief under the Act is not limited to these types of protests.”). After then recounting the refund procedures established by the Act, and the fact that the taxpayers in Brackenbrook based their claim to a refund on the millage rate, the Court held that the taxpayers’ claim for a refund was subject to the RPA. Brackenbrook, 360 S.C. at 399, 602 S.E.2d at 44. Accordingly, because the taxpayers failed to exhaust their administrative remedies under the RPA, the Supreme Court remanded the case to the trial court to be dismissed without prejudice. Brackenbrook, 360 S.C. at 399, 602 S.E.2d at 44.
In B&A the taxpayers brought an action seeking a refund of real and personal property taxes without first exhausting their administrative remedies under the RPA. B&A, 372 S.C. at 263, 641 S.E.2d at 889-90. Just as in Brackenbrook, the taxpayers in B&A “alleged a case of excessive millage.” B&A, 372 S.C. at 264, 641 S.E.2d at 890. This time, having had the guidance of Brackenbrook, the lower courts dismissed the taxpayers’ claims for failure to exhaust the RPA processes. B&A, 372 S.C. at 264, 641 S.E.2d at 890. In the Supreme Court, the taxpayers made several arguments as to why Brackenbrook was either wrong or should not apply to their case, but to no avail. The Court reiterated its holding from Brackenbrook and concluded that:
This case is not distinguishable from Brackenbrook, and thus, the Court of Appeals properly affirmed the circuit court’s dismissal of the action pursuant to Section 12-60-3390. Petitioners allege that Georgetown County collected both real and personal property taxes based upon an excessive millage rate thereby resulting of an overcollection of taxes allocated to the school district. The RPA provides an administrative remedy in the form of a refund for both real and personal property taxes. Thus, pursuant to Brackenbrook and the plain language of the RPA, petitioners must exhaust their administrative remedies before proceeding to circuit court.
B&A, 372 S.C. at 266-67, 641 S.E.2d at 891-92 (citations omitted).
Although the requirement to exhaust administrative remedies clearly applies to refund claims based upon arguments of excessive millage, see, e.g., B&A, 372 S.C. at 266, 641 S.E.2d at 891, Petitioners nevertheless argue that they should be relieved of this obligation because it would be futile to comply with the RPA’s required procedures. Specifically, the Petitioners argue that the County Board of Assessment Appeals has no authority to address allegedly excessive millage, and thus requiring exhaustion of the RPA procedures provides no useful purpose. This very argument, however, was raised in Brackenbrook, but it failed. Even the dissent in that case made the same argument about alleged futility, but to no avail: “The county assessor has no authority regarding millage rates and relief under § 12-60-2560 is inappropriate.” Brackenbrook, 360 S.C. at 402, 602 S.E.2d at 46 (Moore, J., dissenting). Notwithstanding the “futility” concern expressed by the dissent, the majority of the Supreme Court required compliance with the procedures set out in the RPA. Thus, this futility argument in the context of the RPA is foreclosed and is not a legally viable argument.
C. Petitioners’ Failure to Follow the RPA Procedures, Thus Necessitating Dismissal
Petitioners also argue they exhausted all administrative remedies. The Court disagrees. As the Appendix attached to this order demonstrates, the Petitioners did not follow the steps required to exhaust administrative remedies. Once the Petitioners sent their April 23, 2008 letters to the Board of Assessment Appeals, the next step was to await a decision from that Board, and then pursue review of that decision with this Court. The Petitioners, however, did not wait on that decision. Instead, only twenty days after sending the April 23 letters, the Petitioners filed Notices of Request for Contested Case on May 13, 2008. The Court takes the time to note here that there is no time limit set forth in the RPA for the Board of Assessment Appeals to rule on a protest. The Court further notes that, absent any direction in the Statute, it is not reasonable to require a ruling from this body a mere twenty days after receiving a protest appeal. Moreover, an individual taxpayer does not have the authority to unilaterally impose time restrictions and deadlines under the RPA.
It is thus clear that Petitioners have not exhausted the administrative process and remedies because they did not wait for a ruling from the Board of Assessment Appeals. The RPA very clearly provides that a decision from the County Board of Assessment Appeals is a prerequisite to initiating an appeal in this Court. See S.C. Code Ann. § 12-60-2560(C) (“Within thirty days after the board's decision is mailed to the taxpayer, a property taxpayer or county assessor may appeal the decision issued by the board by requesting a contested case hearing before the Administrative Law Judge Division.”) (emphasis added). See also Brackenbrook, 360 S.C. at 397, 602 S.E.2d at 43 (“After the board’s written disposition of an appeal, the aggrieved party (whether taxpayer or assessor) may appeal to the [ALJ] Division.”). The RPA is equally clear that, where the administrative processes established by the Act have not been followed, the Court must dismiss any cases prematurely filed in this Court: “If a taxpayer requests a contested case hearing before the Administrative Law Judge Division without exhausting his prehearing remedy…, the Administrative Law Judge shall dismiss the action without prejudice.” S.C. Code Ann. § 12-60-2560(C) § 12-60-2560(C) (emphasis added).
Thus, under the plain language of the RPA and the Supreme Court opinions addressing this language, the Petitioners’ failure to adhere to the procedures set out in the RPA mandates that this Court dismiss these cases without prejudice.
IT IS HEREBY OIRDERED that the above-captioned cases be dismissed without prejudice.
AND IT IS SO ORDERED.
May 18, 2009
John D. McLeod, Judge
S.C. Administrative Law Court
S.C. Code Ann. § 12-60-2560 provides:
(A) Subject to the limitations in Section 12-60-1750, and within the time limitation of Section 12-54-85(F), a property taxpayer may seek a refund of real property taxes assessed by the county assessor and paid, other than taxes paid on property the taxpayer claims is exempt, by filing a claim for refund with the county assessor who made the property tax assessment for the property for which the tax refund is sought. The assessor, upon receipt of a claim for refund, shall immediately notify the county treasurer and the county auditor for the county from which the refund is sought. The majority of these three officials shall determine the taxpayer's refund, if any, and shall notify the taxpayer in writing of their decision.
(B) Within thirty days after the decision is mailed to the taxpayer on the claim for refund, a property taxpayer may appeal the decision to the county board of assessment appeals.