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Supreme court strikes ruling on tax refunds

Relieved officials to await new decision
BY ROBERT BEHRE
Of The Post and Courier Staff

Charleston County won't have to pay $9.3 million in property tax refunds unless and until the S.C. Supreme Court decides that its 2001 tax bills were wrong.

The Supreme Court issued an order overriding Circuit Judge Victor A. Rawl's ruling that the county must issue refunds to about 90,000 property owners who were overcharged because of the county's reassessment cap two years ago.

Officials learned of the ruling Friday, a day after the same court refused to reconsider its decision throwing out the county's half-cent sales tax.

"It's welcome news after the last couple of days of court decisions," Council Chairman Tim Scott said. "I don't know that a stay indicates one way or another that they're going to rule in our favor."

Trenholm Walker, an attorney for property owners who are seeking the refunds, said the court's decision doesn't hint at which way the justices ultimately will rule.

"All the court has done is preserve the status quo until it hears arguments this spring," he said.

The decision comes as a small relief to county officials, who weren't sure what they were going to do if they had to pay the refunds right away.

"I guess I'm relieved because, candidly, I'm not sure where we would have obtained the money from anyway, other than looking for a tax increase in order to do it. It's such a large amount," Councilman Ed Fava said.

"We would have to drastically reduce services in the middle of a budget year in order to come up with that kind of money," Scott said.

Many homeowners and all owners of commercial and rental property paid higher taxes in 2001 because of tax breaks council gave to owners of homes that soared in value during the 1990s, most notably in beach communities, resorts and downtown Charleston.

Rawl ruled that those breaks were illegal, and he ordered the county to issue refunds ranging from just pennies to tens of thousands of dollars.

County Treasurer Andy Smith said his staff has spent a lot of time figuring out the programs for the refunds and trying to answer related questions.

"A lot of people have sold their property and moved. Who were we going to send refund checks to? It's been an administrative nightmare. Where are we going to come up with $9 million? I've given half of it to the schools, but he (Rawl) said I can't take it back from the schools," Smith said.

With this week's court decision, "at least we've got a little bit of time," he added.

The Supreme Court has accepted the case, meaning the appeal will be heard there instead of by the S.C. Court of Appeals. The high court has asked for expedited briefs, which attorneys for both sides are working on now.

"I finally found something that is more grueling than listening to Christmas music, and that is preparing an appellate brief over the Christmas holidays," Walker joked.


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