Did SC PLR 92-2 require a city redevelopment commission created under the Community Development Law to file a corporate annual report and pay the corporate license fee?

Plain-English summary

South Carolina PLR 92-2 concluded that the Redevelopment Commission of ABC was a public corporation and therefore was not required to file the historical corporate annual report or pay the annual corporate license fee.

The result did not come from an express exemption naming redevelopment commissions. Instead, it rested on the Tax Commission's longstanding administrative treatment of public corporations and on the commission's statutory governmental character.

Facts establishing public status

The City of ABC created the commission by ordinance to redevelop blighted areas for public health, safety, morals, and welfare. The mayor and city council members served as the commission.

The Secretary of State issued a certificate declaring it a “body corporate and politic.” Under the Community Development Law:

• a municipality created the commission;
• the municipal governing body selected or directly supplied its leadership and could remove commissioners;
• redevelopment plans required municipal approval and a public hearing;
• books and records were open to public inspection; and
• the commission exercised public and essential governmental powers.

The ruling also noted statutory treatment of its bonds as serving essential public and governmental purposes.

Why the corporate-license provisions did not apply

Sections 12-19-20 and 12-19-70 generally required corporations to file annual reports and pay a license fee. The ruling acknowledged that the redevelopment commission did not fit the chapter's expressly enumerated exemptions.

Even so, the Tax Commission had historically not required reports or assessed license fees against public corporations. The PLR gave weight to that longstanding administrative interpretation because the legislature had not changed it.

The ruling also reasoned that applying the requirements to public corporations would produce an absurd result because counties and municipalities themselves were public corporations.

Using York County Fair Association v. South Carolina Tax Commission, it distinguished public corporations—government instrumentalities founded, owned, funded, and governed in the public interest—from private corporations organized for particular persons or private enterprise.

Result: the Redevelopment Commission did not have to file the Section 12-19-20 annual report or remit the Section 12-19-70 corporate license fee.

What this means for you

Municipal redevelopment bodies

The ruling turned on creation under the Community Development Law, governmental governance, public control, open records, and public statutory powers—not merely a corporate certificate.

Public authorities and commissions

An entity's label as a corporation did not automatically make it subject to the private-corporation filing and fee regime in this PLR.

Tax professionals

The rationale depended heavily on historical administrative practice even though the text of the license chapter did not expressly exempt this commission.

Current entities

Verify today's entity statute, filing law, and Department practice. This nonprecedential PLR cannot be relied on by another commission.

Common questions

Q: Was the commission expressly exempt under Section 12-19-150?
A: No. The ruling acknowledged it was not within the listed exemptions.

Q: Why was it still outside the filing and fee requirements?
A: It was a public corporation, and longstanding Tax Commission practice did not apply those requirements to public corporations.

Q: What facts showed it was public?
A: Municipal creation and governance, governmental purposes and powers, public plan approval and hearings, and open public records.

Q: Did the corporate certificate make it a private corporation?
A: No. The certificate called it a body corporate and politic, consistent with its public statutory status.

Q: Can another redevelopment commission rely on this PLR?
A: No. It was issued only for the named commission and had no precedential value.

Citations and references

• S.C. Code Ann. §§ 12-19-20 and 12-19-70 — historical corporate annual report and license fee
• S.C. Code Ann. § 12-19-150 — historical enumerated exemptions
• S.C. Code Ann. §§ 31-10-20, 31-10-30, 31-10-40, 31-10-50, and 31-10-90 — redevelopment commission status, creation, governance, removal, and powers
• S.C. Code Ann. §§ 31-10-100 and 31-10-160 — plan approval, public hearing, and open records
• Marchant v. Hamilton, 309 S.E.2d 781 (1983)
• York County Fair Association v. South Carolina Tax Commission, 249 S.C. 337, 154 S.E.2d 361 (1967)
• Ryder Truck Lines, Inc. v. South Carolina Tax Commission and Etiwan Fertilizer Company v. South Carolina Tax Commission — longstanding administrative interpretation cases cited by the PLR
• 1971-72 Op. Att'y Gen. No. 3400 — public-corporation license-fee opinion cited by the PLR

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/PLR92-2.pdf

Original ruling text

SC PRIVATE LETTER RULING #92-2

TO:

Redevelopment Commission of ABC

SUBJECT:

Redevelopment Commission - Corporate Annual Report and License Fee
(Corporate License Fee)

TAX MANAGER:

John P. McCormack

REFERENCE:

S.C. Code Ann. Section 31-10-10 et. seq. (1976)
S.C. Code Ann. Section 12-19-10 et. seq. (1976 & Supp. 1990)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (Enacted June 1990)
SC Revenue Procedure #87-3

SCOPE:

A Private Letter Ruling is a temporary document issued to a taxpayer,
upon request, and it applies only to the specific facts or circumstances
related in the request. Private Letter Rulings have no precedential value
and are not intended for general distribution.

Question:
Is the Redevelopment Commission of ABC required to file an annual report pursuant to Code
Section 12-19-20, and remit an annual corporate license fee pursuant to Code Section 12-19-70?
Facts:
On April 25, 1988 the City of ABC enacted an ordinance creating the Redevelopment
Commission of ABC ("Redevelopment Commission"). The City Council of ABC determined
that "blighted areas" existed within the city and that the redevelopment of these areas was
"necessary and in the interest of the public health, safety, morals, and welfare of the residents of
the City of ABC." In accordance with the ordinance, the membership of the Redevelopment
Commission consists of the Mayor and members of the City Council of ABC (serving ex
officio).
On the same day, the Secretary of State issued, pursuant to Code Section 31-10-30, a corporate
certificate to the Redevelopment Commission and declared it to be "a body corporate and
politic". The Secretary of State did not require the Redevelopment Commission to file a
corporate annual report or remit a corporate license fee. On May 16, 1988, the Redevelopment
Commission approved and ratified its by-laws.

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Discussion:
Code Section 12-19-20 requires the filing of an annual report by corporations, and reads in part:
(a) Every corporation organized under the laws of this State and every corporation
organized to do business under the laws of any other state, territory, or country and
qualified to do business in South Carolina and any other corporation required by Section
12-7-230 to file income tax returns, in addition to any other requirements of law, must
make a report annually to the Tax Commission on or before the fifteenth day of the third
month next after the preceding income tax year in a form prescribed by the Tax
Commission and the Secretary of State ....

(e) In order to file the initial articles of incorporation or application for certificate of
authority by a foreign corporation, the articles or application for certificate of authority
must be accompanied by an initial annual report ... together with a remittance for the
minimum license fee required by Sections 12-19-70 and 12-19-120 made payable to the
South Carolina Tax Commission. The report and remittance must be submitted to the Tax
Commission by the Secretary of State.
Code Section 12-19-70 reads, in part:
In addition to all other license taxes or fees or taxes of whatever kind, every corporation required
to file the report by Section 12-19-20, except the corporations enumerated in Section 12-19-100,
shall pay to the Commission at the time of filing the report as required by Section 12-19-20 an
annual license fee of fifteen dollars plus one mill on each dollar paid to the capital stock and paid
in as surplus of the corporation as shown by the records of the corporation on the first day of the
income year next preceding the date of filing the report. In no case may the license fee provided
by this section be less than twenty-five dollars. The license fee provided for by this section must
be paid at the time of filing the report pursuant to the provisions of Section 12-19-20. ...
Code Section 12-19-150 reads:
The provisions of this chapter [19] shall not apply to any nonprofit corporation organized
under Article 1 of Chapter 31 of Title 33 for religious purposes, any volunteer fire
departments and rescue squads, any cooperative organized under Chapter 45 or 47 of
Title 33, any building and loan association or any credit union doing a strictly mutual
business or to any insurance, fraternal, beneficial or mutual protection companies or
associations or to any foreign corporation whose entire income is not included in gross
income for federal income tax purposes due to any treaty obligation of the United States.
In summary, all corporations (1) organized under the laws of South Carolina, (2) organized to do
business under the laws of any other state, territory, or country and qualified to do business in
South Carolina or (3) required to file South Carolina income tax returns must file an annual
report and pay an annual license fee. The statute, however, exempts certain organizations from
these requirements.

2

The Redevelopment Commission of ABC does not qualify as an organization exempt from the
filing and license fee requirements of Chapter 19 of Title 12.
However, the Tax Commission, in the administration of the provisions of Chapter 19 of Title 12,
has not required the annual report of, or assessed the corporate license fee with respect to, public
corporations.
Administrative interpretations of statutes by the agency charged with their administration and not
expressly changed by the legislative body are entitled to great weight. Marchant v. Hamilton
309 S.E. 2d 781(1983). When as in this case, the construction or administrative interpretation of
a statute has been applied for a number of years and has not been changed by the legislature,
there is created a strong presumption that such interpretation or construction is correct. Ryder
Truck Lines, Inc. v. South Carolina Tax Commission, 248 S.C. 148 S.E. 2d 435; Etiwan
Fertilizer Company v. South Carolina Tax Commission, 217 S.C. 354, 60 SE2d, 682.
This is supported by 1971-72 Op. Atty. Gen. No. 3400 (See also Commission Manual Regulations and Opinions, No. I-OAG-20.), which held:
It is doubtful that the General Assembly intended the activities of [public] corporations to
be examined by the Tax Commission or that [a public] corporation pay a license fee ....
In addition, to require public corporations to file an annual report and remit the corporate license
fee would result in an absurd conclusion, in that, municipalities and counties are considered to be
public corporations. See York County Fair Association v. South Carolina Tax Commission, 249
S.C. 337, 154 SE 2d 361 (1967). "A statute subject to interpretation is presumed not to have
been intended to produce absurd consequences, but to have the most reasonable operation that its
language permits. ... " 73 Am. Jur. 2d Statutes Section 265.
In summary, public corporations are not required to file an annual report or remit an annual
corporate license fee. Therefore, in reviewing this matter we must consider whether the
Redevelopment Commission is a public corporation.
The Redevelopment Commission was formed, under the Community Development Law of
Chapter 10 of Title 31, to redevelop certain "blighted areas" within the City of ABC and in the
interest of the public health, safety, morals and welfare of the residents of the city.
In York County Fair Association v. South Carolina Tax Commission, supra, the Supreme Court
of South Carolina held:
A "public corporation" is an instrumentality of the state, founded and owned in the public
interest, supported by public funds, and governed by those deriving their authority from
the state, while a "private corporation" may be one organized by permission of the
legislature, supported largely by voluntary contributions, and managed by officers and
directors who are not representatives of the state or any political subdivision, although the
corporation is engaged in charitable work or performs duties similar to those of public
corporations.

3

The division of corporations into public and private will be more simply and easily
understood as political and private. Whatever belongs to the public, or people composing
a government, is a public or political corporation. Private corporations are such as are
instituted for the benefit of certain persons as individuals, or for the purposes of applying
private funds or enterprise or skill to the public good. "Public corporations are such as
exist for public political purposes only, such as counties, cities, towns and villages. They
are founded by the government for public purposes, and the whole interest in them
belongs to the public. ... "(Citing 2 Kent Comm 222-3).
The classification of the Redevelopment Commission as a public corporation under the above
case law is supported by the Community Development Law (Code Section 31-10-10 et, seq.),
which authorizes the existence of municipal redevelopment commissions.
Code Section 31-10-20 defines "Commission" (redevelopment commission) as "a public body
and a body corporate and politic created and organized in accordance with the provisions of this
chapter."
Code Section 31-10-30 authorizes municipalities to create redevelopment commissions, and
reads in part:
(a) Every municipality is authorized to create one or more separate and distinct bodies
corporate and politic to be known as a redevelopment commission of the municipality by
the passage by the governing body of such municipality of an ordinance creating a
commission ...

(c) The governing body shall cause a certified copy of such ordinance to be filed in the
office of the Secretary of State; upon receipt of the certified copy of such ordinance, the
Secretary of State shall issue a certificate of incorporation.
Code Section 31-10-40 stipulates how the redevelopment commission will be governed, and
reads:
Upon adoption of an ordinance establishing a commission, the governing body of such
municipality shall provide for the governance of such commission by either of the
following methods. A commission may be governed by the members of the governing
body of its parent municipality serving ex officio or by not less than five nor more than
nine commissioners selected by the governing body of the municipality. In the event the
governing body initially elects to appoint commissioners to operate the commission, it
may at any time in its discretion abolish the office of commissioners and assume direct
responsibility for the operation of the commission.
Code Section 31-10-50 also permits the governing body of the municipality remove any
commissioner at will. A commissioner may also receive any compensation that the governing
body of the municipality may provide.

4

Code Section 31-10-90 sets forth the general powers of the commission, and describes the
redevelopment commission as "a public body, corporate and politic, exercising public and
essential governmental powers ..."
Also, the redevelopment commission must submit its redevelopment plan to the governing body
of the municipality for approval (31-10-100), must hold a public hearing before the final
adoption of its plan (31-10-100), and must have its books and records open and subject to
inspection by the public at all times (31-10-160). The redevelopment commission may also issue
bonds which are "declared to be issued for an essential public and governmental purpose and to
be public instrumentalities and, together with interest thereon and income therefrom, shall be
exempt from all taxes except inheritance estate, or transfer taxes." (31-1-120)
Based on the above, the Redevelopment Commission of the City of ABC, as with all such
redevelopment commissions incorporated under the Community Development Law, is
determined to be a public corporation.
Conclusion:
The Redevelopment Commission of the City of ABC is not required to file an annual report
pursuant to Code Section 12-19-20 or remit an annual corporate license fee pursuant to Code
Section 12-19-70.

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