Could airplanes, trucks, boats, cars, or other mobile property qualify for South Carolina fee-in-lieu-of-property-tax treatment under RR 97-21?

Plain-English summary

South Carolina Revenue Ruling 97-21 said mobile property such as airplanes, trucks, boats, and cars generally could not receive fee-in-lieu-of-property-tax treatment when it was used both at and away from the project site.

The ruling addressed three programs it called the Big Fee, Little Fee, and Simplified Fee. For property to qualify, it had to satisfy three separate requirements: it could not previously have been subject to South Carolina property tax except under identified statutory exceptions; it had to be the kind of property included in a qualifying project; and the project property had to be located in a single county, a multicounty industrial park, or a qualifying contiguous tract crossing county lines.

Machinery, equipment, and apparatus could be suitable project property. But the Department read "located" to mean settled or established. Equipment that left the site and operated both on and off it was not located in the required project area, even if it otherwise was necessary or useful to the project and even if it had a property-tax situs there.

The result changed when the equipment's use was limited to the project site. Site-limited machinery, equipment, or apparatus could be considered part of the project and could qualify if it met the other program requirements.

Common questions

Q: Did every vehicle or airplane automatically fail? The ruling focused on use and location, not merely the label. Mobile property failed when it left the project site; equipment whose use remained limited to the site could qualify.

Q: Was having a property-tax situs in the county enough? No. The ruling said the fee statutes independently required the project property to be located in the qualifying project area.

Q: Did being necessary or useful to the business guarantee eligibility? No. That could satisfy part of the project-property definition, but the property still had to meet the prior-tax and project-location requirements.

Q: Which fee programs did the ruling cover? The Big Fee under Section 4-29-67, the Little Fee under Section 4-12-30, and the Simplified Fee under Chapter 44 of Title 12.

Citations and references

• S.C. Code Ann. §§ 4-29-10 and 4-29-67 (Big Fee project definition and location rule)
• S.C. Code Ann. §§ 4-12-10 and 4-12-30 (Little Fee project definition and location rule)
• S.C. Code Ann. §§ 12-44-30, 12-44-40(G), and 12-44-110 (Simplified Fee provisions)
• S.C. Code Ann. § 4-1-170 (multicounty industrial parks referenced)
• Hays v. South Carolina Tax Commission, 273 S.C. 269, 255 S.E.2d 837 (1979); Fennell v. South Carolina Tax Commission, 233 S.C. 43, 103 S.E.2d 424 (1958); Etiwan Fertilizer Co. v. South Carolina Tax Commission, 217 S.C. 484, 60 S.E.2d 682 (1950) (dictionary-use principle cited)

Subject

Mobile Property and Fee-in-Lieu of Property Taxes

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR97-21.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P.O. Box 125, Columbia, South Carolina 29214

SC REVENUE RULING # 97-21

SUBJECT:

Mobile Property and Fee-in-Lieu of Property Taxes

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous documents and any oral directives in conflict
herewith.

REFERENCES:

S.C. Code Ann. Section 4-29-67 (1996)
S.C. Code Ann. Section 4-12-30 (1996)
S.C. Code Title 44, Chapter 12 (Act. No. 149)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Supp. 1996)
SC Revenue Procedure #97-8

SCOPE:

A Revenue Ruling is the Department of Revenue's official
advisory opinion of how laws administered by the Department
are to be applied to a specific issue or a specific set of facts,
and is provided as guidance for all persons or a particular
group. It is valid and remains in effect until superseded or
modified by a change in the statute or regulations or a
subsequent court decision, Revenue Ruling or Revenue
Procedure.

Issue:
May mobile property such as airplanes, trucks, boats and cars qualify for a fee in lieu of
taxes (herein referred to as a “Fee”) under Code Sections 4-29-67 (herein referred to as
the “Big Fee”), 4-12-30 (herein referred to as the “Little Fee”) or Chapter 44 of Title 12
(herein referred to as the “Simplified Fee”)?

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Conclusion:
Mobile property such as airplanes, trucks, boats, etc. may not qualify for a Fee under the
Big Fee, the Little Fee, or the Simplified Fee unless such property does not leave the
project site.
Facts and Discussion:
Recently, the Department of Revenue has received a number of questions asking whether
mobile property, such as trucks, cars, airplanes, boats, etc. may qualify for a Fee under
the Big Fee, the Little Fee, or the Simplified Fee. Typically this property is first placed at
a single site in the county which has granted the Fee, but then is used both inside and
outside of that county.
In order to qualify for the Fee, property must meet three separate requirements: (1) it
must not have been previously subject to property taxes in this State (subject to the
exceptions provided in Code Sections 4-29-67(K)(for the Big Fee), 4-12-30(J)(for the
Little Fee) or 12-44-110(for the Simplified Fee)) 1 ; (2) it must be the type of property that
is considered part of a project as that term is defined in Code Sections 4-29-10(for the Big
Fee), 4-12-10(for the Little Fee) and 12-44-30(for the Simplified Fee); and, (3) and the
property that comprises the “project”, must be located in a single county, a multicounty
industrial park, or on a contiguous tract of land in more than one county.
Generally, the type of property that can be considered part of the “project” consists of
land, buildings or other infrastructure improvements on the land such as water, sewage
treatment facilities or air pollution control facilities. Machinery, apparatus, equipment,
office facilities, and furnishings which are considered necessary, suitable or useful may
also qualify as part of the “project”. However, even if the mobile property described is
considered to be necessary, suitable or useful equipment, it must meet all the other
requirements for a “project”.
4-29-67(B) (which governs the Big Fee) states, in relevant part:
In order for property to qualify for the fee as provided in subsection (D)(2);
...(2) The investment must be a project which is located in a single county or an
industrial development park as defined in Section 4-1-170. A project located on a
contiguous tract of land in more than one county, but not in such an industrial
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For purposes of this document it is assumed that the property has not previously been
subject to property taxes in this State.
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development park, may qualify for the fee provided (a) the counties agree on the
terms of the fee and the distribution of the fee payment; (b) the minimum millage
rate cannot be lower than the millage rate applicable to the county in which the
greatest amount of investment occurs; and (c) all such counties must be parties to
the fee agreement establishing the terms of the fee. [emphasis added]
Code Section 4-12-30(B) (which governs the Little Fee) provides in relevant part:
In order for property to qualify for the fee as provided in subsection (D)(2);
...(2) The investment must be a project which is located in a single county or an
industrial development park as defined in Section 4-1-170. A project located on a
contiguous tract of land in more than one county, but not in such an industrial
development park, may qualify for the fee if:
(a) the counties agree on the terms of the fee and the distribution of
the fee payment;
(b) the minimum millage rate is not lower than the millage rate applicable to
the county in which the greatest amount of investment occurs; and
(c) all the counties are parties to all agreements establishing the terms of the
fee. [emphasis added]
Code Section 12-44-40(G) (which governs the Simplified Fee) provides:
The project which is the subject of the fee agreement must be located in a single
county or in a multicounty park or on contiguous tracts of land in more than one
county. When a tract crosses a county boundary, all counties in which the tract is
located must be parties to the fee agreement, which must provide the manner in
which the fee payments must be distributed among the counties and the fee
agreement must set forth a minimum millage rate not lower than the millage rate
applicable to the site in the county where the greatest amount of investment occurs.
[emphasis added]
Therefore, all property which comprises the “project” must be located in a single county,
a multicounty industrial park, or on a contiguous tract of land in more than one county.
Thus, any decision as to whether movable property may qualify for a Fee under the above
mentioned provisions must focus not just on whether the property is the type of property
that may be included in the project, but also on whether such property is “located” in the
county, a multicounty industrial park, or a contiguous tract of land in more than one
county, irrespective of whether it has a situs there for property tax purposes.

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It is an accepted practice in South Carolina to resort to the dictionary to determine the
literal meaning of words used in statutes. For cases where this has been done, see Hays v.
South Carolina Tax Commission, 273 S.C. 269, 255 S.E. 2d 837 (1979); Fennell v. South
Carolina Tax Commission, 233 S.C. 43, 103 S.E. 2d 424 (1958); Etiwan Fertilizer Co. v.
South Carolina Tax Commission, 217 S.C. 484, 60 S.E. 2d 682 (1950).
The Second College Edition of the American Heritage Dictionary provides the following
definitions:
“Locate” - “To determine or specify the position or limits of. To station,
situate, or store. To become established; settle.”
“Settle”

-

“To put firmly in a desired position or place; establish.”

In summary, the word “located” means settled or established. The very nature of mobile
property such as planes, boats, rolling stock, etc. is that its location is not settled or
established. The use and placement of such machinery, apparatus or equipment is
generally not limited to a site in a county, a multicounty industrial park, or a contiguous
tract of land in more than one county as is required for such machinery, apparatus or
equipment to be part of the “project” that is the subject of the Fee. Therefore, property
that is moved from the site and which is used both off and on that site, cannot be said to
be “located” in the county (or the multicounty industrial park or on a contiguous tract of
land in more than one county). However, when the use of the machinery, equipment or
apparatus is limited to a site in a county, a multicounty industrial park or a contiguous
tract of land in more than one county, it will be considered to be part of the “project” and
may therefore qualify for Fee treatment.
If you have questions about this document, you may contact Jerilynn VanStory at
(803)898-5151.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Burnet R. Maybank III
Burnet R. Maybank III, Director
Columbia, South Carolina
December 29
, 1997

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