A street runs through it? So what, S.C. high court says

John O'Brien Jun. 9, 2008, 1:46pm


COLUMBIA, S.C. (Legal Newsline) - South Carolina's Supreme Court decided Monday that even though a public street runs between them, a business' office can be taxed like it is part of a manufacturing plant.

The decision will force Sonoco Products Company to pay a higher industrial property tax on the Hartsville area that serves as its international headquarters.

A unanimous vote by the Justices overturned a lower court decision. Debated was a circuit judge's interpretation of the term "contiguous" as it applies to the tax code set forth by the state's Legislature.

"In order to effectuate the intent of the Legislature, we find the word "contiguous" within the context of section 12-43-220 should be broadly construed," wrote Justice Donald Beatty.

"To read it narrowly would provide manufacturers a tax reduction which is neither warranted nor intended by the Legislature. We do not believe the Legislature contemplated that a manufacturer could defeat contiguity in order to receive the reduced tax assessment ratio merely by granting a right-of-way for a road located on its plant site."

Beatty wrote that the applicable section of law does not define "contiguous," so it was up to the Justices to do so. Sonoco said its three office buildings were not contiguous to its manufacturing plant across a public street, so it should only have to pay 6 percent property tax on them.

The tax on the plant is 10.5 percent because it is manufacturing-related property. The parties agreed that a refund of nearly $900,000 was at issue.

"Because Sonoco owns the property which separates the office buildings from the plant site, we do not believe the presence of the public right-of-way over Novelty Avenue/Woodmill Street or the easement for the railroad operates to destroy contiguity," Beatty wrote.

From Legal Newsline: Reach John O'Brien via e-mail at john@legalnewsline.com.

More News