Petition for Writ of Certiorari to the Supreme Court of South Carolina

8/10/2019 Petition for Writ of Certiorari to the Supreme Court of South Carolina

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In the Supreme Court of the United StatesIn the Supreme Court of the United StatesIn the Supreme Court of the United StatesIn the Supreme Court of the United StatesIn the Supreme Court of the United States

KIGRE, INC.,Petitioner,

v.

TOWN OF HILTON HEAD ISLAND,Respondent.

On Petition for Writ of Certiorari to the

Supreme Court of South Carolina

PETITION FOR WRIT OF CERTIORARI

THOMAS C. TAYLOR

Counsel of RecordLaw Office of Thomas C. Taylor, LLC

P.O. Box 5550

Hilton Head Island, SC 29938

(843) [email protected]

Counsel for Petitioner Kigre, Inc.

Becker Gallagher Cincinnati, OH Washington, D.C. 800.890.5001

NO.


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QUESTIONS PRESENTED1. Is a municipal Business License Fee based upontotal gross income subject to the fair apportionmentrequirement of Complete Auto Transit, Inc. v. Brady,Chairman, Mississippi Tax Commission, 430 U.S. 274,97 S. Ct. 1076, 51 L. Ed. 2 326 (1977)?

2. Does a municipal Business License Fee based upontotal gross income, applied to a business that generatesmore than ninety nine percent of its income ininterstate commerce, violate the Dormant Commerce

Clause?

3. Is a municipal Business License Fee based upontotal gross income, applied to a business that generatesmore than ninety nine percent of its income ininterstate commerce, invalid as an interference withthe Due Process clause of the Federal Constitution byattempting to tax property beyond the jurisdiction ofthe municipality?


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RULE 29 CORPORATEDISCLOSURE STATEMENT

Kigre, Inc. is a closely-held Ohio corporation, doesnot have a parent corporation, and no publicly heldcompany owns ten percent or more of the corporationstock.


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TABLE OF CONTENTSQUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . i

RULE 29 CORPORATE DISCLOSURESTATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . v

PETITION FOR A WRIT OF CERTIORARI . . . . . . 1

OPINION BELOW . . . . . . . . . . . . . . . . . . . . . . . . . . 1

JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

CONSTITUTIONAL AND STATUTORYPROVISIONS INVOLVED . . . . . . . . . . . . . . . . . 1

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . 4

REASONS FOR GRANTING THE WRIT . . . . . . . 10

I. The South Carolina Supreme Courts decisionconflicts with decisions of this Court. . . . . . . . . 11

II. The South Carolina Supreme Courts decisionincorrectly determined the scope of applicabilityof the Dormant Commerce Clause and the DueProcess Clause, by failing to apply the externalconsistency test to the Ordinance. . . . . . . . . . . 16

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

APPENDIX

Appendix A Opinion in the Supreme Court ofSouth Carolina(June 4, 2014) . . . . . . . . . . . . . . . . App. 1


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Appendix B Amended Order Ending Case in theCourt of Common Pleas FourteenthJudicial Circuit(September 20, 2012) . . . . . . . . . . App. 6

Appendix C Opinion in the Supreme Court ofSouth Carolina(July 24, 2014) . . . . . . . . . . . . . . App. 28

Appendix D OrdinanceChapter 1, Business and ProfessionalLicenses . . . . . . . . . . . . . . . . . . . App. 29

Appendix E Excerpts of Trial Transcript in theCourt of Common Pleas, State ofSouth Carolina, County of Beaufort(December 8, 2010) . . . . . . . . . . App. 63

Appendix F Defendants Exhibit 2, 2006 BusinessLicense Handbook, Municipal

Association of SC . . . . . . . . . . . . App. 67


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TABLE OF AUTHORITIESCASES

American Ins. Assoc. v. Lewis,50 N.Y.2d 617 (Ct. App. N.Y. 1980) . . . . . . . . . 13

Baltic Mining Co. v. Massachusetts,231 U.S. 68, 34 S. Ct. 15, 58 L. Ed. 127(1913) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 13

Bass, Ratcliff & Gretton v. State Tax Commission,266 U.S. 271, 45 S. Ct. 82, 69 L. Ed. 282

(1924) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Central Greyhound Lines, Inc. v. Mealey,334 U.S. 653, 68 S. Ct. 1260 (1948) . . . . . . . . . . 19

City of Winchester v. American Woodmark Corp.,252 Va. 98, 471 S.E.2d 495 (1996) . . . . . . . . . . . 20

Complete Auto Transit, Inc. v. Brady, Chairman,Mississippi Tax Commission,430 U.S. 274, 97 S. Ct. 1076, 51 L. Ed. 2d 326(1977) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim

Cudahy Packing Co. v. Hinkle,278 U.S. 460, 49 S. Ct. 204, 73 L. Ed. 454(1929) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 12, 13

Department of Revenue v. Association ofWashington Stevedoring Cos.,435 U.S. 734, 98 S.Ct 1388, 55 L. Ed. 2d 682(1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

General Motors Corp. v. Tracy,519 U.S. 278, 117 S. Ct. 811, 136 L. Ed. 2d 761

(1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16


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Goldberg v. Sweet,488 U.S. 252, 109 S. Ct. 582, 102 L. Ed. 2d 261(1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim

Gwin, White & Prince v. Henneford,305 U.S. 434, 59 S. Ct. 325, 83 L. Ed. 272(1939) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Hans Rees Sons, Inc. v. North Carolina ex rel.Maxwell,283 U.S. 123, 51 S. Ct. 385, 75 L. Ed. 879(1931) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Hunt-Wesson, Inc. v. Franchise Tax. Bd. OfCalifornia,528 U.S. 458, 120 S. Ct. 1022, 145 L. Ed. 2d 974(2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

International Paper Co. v. Massachusetts,246 U.S. 135, 38 S. Ct. 292, 62 L. Ed. 624(1918) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 11, 12

Japan Line Ltd. v. County of Los Angeles,441 U.S. 434, 99 S. Ct. 1813, 60 L. Ed. 2d 336

(1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Moorman Mfg. Co. v. Bair,

437 U.S. 267, 98 S. Ct. 2340, 57 L. Ed. 2d 197(1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 23, 26

Norfolk & Western Ry. Co. v. North Carolina,297 U.S. 682, 56 S. Ct. 625, 80 L. Ed. 977(1936) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Norfolk & Western Ry. Co. v. Missouri State TaxCommn,

390 U.S. 317, 88 S. Ct. 995, 19 L. Ed. 2d 1201(1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 23


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O.H. Martin Co. v. Sharpsburg Borough,376 Pa. 242, 102 A. 2d. 125 (1954) . . . . . . . . . . 13

Oklahoma Tax Commission v. Jefferson Lines,514 U.S. 175, 115 S. Ct. 1331, 131 L. Ed. 2d 261(1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim

Polychrome Intl Corp. v. Krigger,4 F.3d 1522 (3d Cir. 1993) . . . . . . . . . . . . . . . . . 20

Quill Corp. v. North Dakota,504 U.S. 298, 112 S. Ct. 1904, 119 L. Ed. 2d 91

(1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Southern Pacific Transp. Co. v. Arizona, Dept of

Revenue,202 Ariz. 326, 44 P.3d 1006 (2002) . . . . . . . . . . 20

Spector Motor Services v. OConnor,340 U.S. 602, 71 S. Ct. 508, 95 L. Ed. 573(1951) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

The Philadelphia Eagles Football Club, Inc. v. Cityof Philadelphia,573 Pa. 189, 823 A.2d 109 (2003) . . . . . . . passim

Tyler Pipe Industries, Inc. v. Washington StateDept of Revenue,483 U.S. 232, 107 S. Ct. 2819, 97 L. Ed. 2d 199(1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Underwood Typewriter Co. v. Chamberlain,254 U.S. 113, 41 S. Ct. 45, 65 L. Ed. 165(1920) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Wagman, Inc. v. Manchester Township,112 Pa. Cmwlth. 357, 535 A.2d. 702 (1988) . . . 13


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CONSTITUTIONU.S. Const., amend. XIV . . . . . . . . . . . . . . . . . . . . . . 1

U.S. Const., art. I, section 8, cl.3 . . . . . . . . . . . . . . 16

U.S. Const. art., III, section 8 . . . . . . . . . . . . . . . . . . 1

STATUTES AND ORDINANCES

28 U.S.C. Section 1257(a) . . . . . . . . . . . . . . . . . . . . . 1

Mississippi Code Annotated 1942 Section 10105(1972 Supp.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Town of Hilton Head Islands Municipal Code, Title10, Chapter 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Section 10-1-10 . . . . . . . . . . . . . . . . . . . . . . . . . 1, 5

Section 10-1-20 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Section 10-1-20(3) . . . . . . . . . . . . . . . . . . . 5, 9, 15

Section 10-1-30 . . . . . . . . . . . . . . . . . . . . . . . . . 2, 5

Section 10-1-40 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Section 10-1-60 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Section 10-1-120 . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Section 10-1-190 . . . . . . . . . . . . . . . . . . . . . . . . . . 4

OTHER AUTHORITIES

Hartman, Federal Limitations on State and LocalTaxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Jerome R. Hellerstein & Walter Hellerstein, State

Taxation (3d ed. 1998) . . . . . . . . . . . . . . 19, 20, 24


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James H. Peters, Sales/Use Taxes: Is FairApportionment a Proper Test?, 6 State TaxNotes 105 (1994) . . . . . . . . . . . . . . . . . . . . . . . . 24

Piper & Eggen, Gross Receipts Taxes: GeneralPrinciples (1994) . . . . . . . . . . . . . . . . . . . . . . . . 19

Ronald D. Rotunda & John E. Nowak, Treatise onConstitutional Law (2nd Ed. 1992) . . . . . . . . . . 22

Laurence H. Tribe, American Constitutional Law(2ndEd. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . 17


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PETITION FOR A WRIT OF CERTIORARIKigre, Inc. respectfully petitions for a Writ of

Certiorari to review the judgment of the SouthCarolina Supreme Court.

OPINION BELOW

The opinion of the South Carolina Supreme Courtis reported at 408 S.C. 647, 760 S.E.2d 103, and isreproduced as Appendix A to this Petition.

JURISDICTION

The South Carolina Supreme Court decided thiscase on June 4, 2014 and denied Kigre, Inc.s Petitionfor Rehearing by Order dated July 24, 2014. This Courthas jurisdiction under 28 U.S.C. Section 1257(a).

CONSTITUTIONAL AND STATUTORYPROVISIONS INVOLVED

The Commerce Clause of the United StatesConstitution, provides in pertinent part, TheCongress shall have power [t]o regulate commerce

with foreign nations, and among the several statesU.S. Constitution, Article III, Section 8.

The Fourteenth Amendment to the UnitedStates Constitution provides, in pertinent part,nor shall any State deprive any person of life,liberty, or property without due process of law U.S.Constitution, Amend. XIV.

The Town of Hilton Head Island MunicipalOrdinance Section 10-1-10states, in pertinent part:

License Required. Every person engaged orintending to engage in any calling, business,


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occupation or profession listed in the rateclassification index portion of this chapter, inwhole or in part, within the limits of the town, isrequired to pay an annual license as hereinafterprovided.


The following words, terms and phrases,when used in this chapter shall have themeaning ascribed herein:

(3) Gross income: The total revenue of abusiness, received or accrued, for one fiscal yearcollected or to be collected by reason of theconduct of business within the town, exceptingtherefrom income from business done whollyoutside of the town on which a license tax is paidto some other municipality or a county and fullyreported to the town. Gross income frominterstate commerce shall be included in the

gross income for every business subject to a

business license fee.(Emphasis added.)The Town of Hilton Head Island Municipal

Ordinance Section 10-1-30states, in pertinent part:

The business license levied by this chapter isfor the purpose of providing such regulation asmay be required by the businesses subjectthereto and for the purpose of raising revenuefor the general fund through a privilege fee


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The Town of Hilton Head Island MunicipalOrdinance Section 10-1-40 states,in pertinent part:

The required license fee shall be paid for eachbusiness subject hereto according to theapplicable rate classification on or before May31st of each year... If gross income cannot beseparated for classifications at one (1) location,the license fee shall be computed on thecombined gross income for the classificationrequiring the highest rate. A license fee basedon gross income shall be computed on the grossincome for the preceding calendar or fiscal year,and on a twelve-month projected income basedon the monthly average for a business inoperation for less than one (1) year.


No deductions from gross income shall bemade except from income from business donewholly outside of the town on which a license tax

is paid to some other municipality or a county,or income which cannot be taxed pursuant tostate law.


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The Town of Hilton Head Island MunicipalOrdinance Section 10-1-190 states, in pertinent part:

The license fee for each class of businessshall be computed in accordance with thefollowing rates

Class Income: 0-$5,000 All over $5,000Up to $5,000 Rate per thousandMinimum of fraction thereof

5 $62.50 $1.08

The entirety of the Town of Hilton Head IslandsMunicipal Code, Title 10, Chapter 1 (the BusinessLicense Fee Ordinance) is included in Appendix D.

STATEMENT OF THE CASE

Kigre, Inc. is a high tech manufacturer of lasercomponents and laser glass, with its solemanufacturing facility located on Hilton Head Island,SC. Over ninety-nine percent of Kigres products areshipped out-of-state for use in the later building oflaser range finders and research systems for the

military. Kigre, an Ohio corporation with its principalplace of business on Hilton Head Island, S.C., paysproperty and personal property taxes on itsmanufacturing facility to the Town of Hilton HeadIsland without objection.

During the time period here at issue, 2002-2006,Kigre sold more than 99.5 percent of the lasercomponents and laser glass it manufactured on ayearly basis, to out-of-state purchasers throughinterstate commerce. As a result, ninety-nine percent

of Kigres gross income was derived from interstatecommerce sales.


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The Town of Hilton Head Island levied a BusinessLicense tax1 on Kigres total gross income, despiteKigres demands that its gross income generated ininterstate commerce be apportioned out of the taxableincome subject to this Business License fee. The Townrefused to apportion Kigres gross income, relying on itsOrdinance Section 10-1-20(3), which states that Grossincome from interstate commerce shall be included inthe gross income for every business subject to abusiness license fee. App. 30

From the time Kigre opened its manufacturingoperation on Hilton Head in 1986 through 2006, Kigreannually submitted a Business License Fee applicationto the Town comporting with the time requirements ofthe Ordinance, and paid the minimum annual fee due,which was $62.502. It is undisputed that the $62.50minimum annually paid by Kigre would cover theannual Business License Fee due if Kigres interstatecommerce-generated gross income had beenappropriately apportioned out.

Unhappy with Kigres refusal to pay a Business

License tax on its interstate commerce-generated

1The tax is alternatively denominated a tax, a privilege fee anda license fee in different portions of the Ordinance. See section10-1-120 (a tax); Section 10-1-30 (a privilege fee) and Section10-1-10 (an annual license fee). See Appendix D, App. 37, App. 31and App. 29.

2Kigre is classified by the Town as a class 5 business, with aminimum annual business license tax due on gross income up to$5,000, of $62.50. All gross income over $5,000 is taxed at the rateof an additional $1.08 per thousand dollars of gross income.

App. 43.


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income, the Town conducted an audit of Kigresbusiness records in 2005 and then proceeded to file suitin State court against Kigre for $41,645.81 in allegedpast due Business License fees and penalties. TheTown also sought a Declaratory Judgment that Kigrewas not entitled to an apportionment of its grossincome and an injunction to prevent Kigre fromoperating until the Business License fees were paid.

Kigre then paid the full amount under protest, filedits Answer and Counterclaim, and sought anadministrative review of the $41,645.81 assessment,as provided under the Towns Municipal Code. Whenthe Town failed to hold the administrative hearing ina timely manner, Kigres $41,645.81 was refunded, butthe Town continued its lawsuit for a DeclaratoryJudgment as to the issue of required apportionment ofKigres interstate commerce-generated gross revenues,and for resolution of other defenses raised by Kigre3.

Lest there be any doubt about the Towns positionconcerning the need to apportion gross incomegenerated in interstate sales, Kigre produced the

following testimony at trial, from Steven Markiw, theTown Deputy Director of Finance:

3Kigre, Inc. does not seek this Courts review of the followingadditional issues previously appealed to the South CarolinaSupreme Court: that Kigre had paid all it was liable to pay; thatthe failure of the Ordinance to allow a defendant to recoverattorneys fees is a denial of the equal protection of the law; thatthe Ordinance is unconstitutionally vague and thereforeunenforceable; and that the Ordinance violated the EqualProtection clauses of the Federal and South CarolinaConstitutions.


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Question: The Town of Hilton Head simplydoesnt care to know whether ornot Kigres manufacturing is soldin the State of South Carolina oroutside the State of SouthCarolina, right?

Markiw: I would agree.Question: Your position is that they are liable

for all of their sales.Markiw: Yes.Question: And the Town does not make any

effort with anyone, Kigre or anyother business, to apportion anytype of tax if that entity maintainsthat its sales are out-of-state; isthat correct?

Markiw: Thats correct.

Transcript of Trial, Vol. 1, page 141, line 25 andpage 142, lines 2-15, as are set forth in Appendix E,

App. 66.

Also adduced at trial, was the South Carolina

Municipal Association Handbook relied upon by theTown as [a] guidebook we use in doing ourenforcement. (Trial transcript, page 137, lines 6-7, asshown in Appendix E, App. 64.) In providing guidanceas to how a municipality such as the Town of HiltonHead Island should handle gross income generated ininterstate commerce in the Business License Feearena, the SCMA Handbook specifically noted: [T]hetax may be levied only if all four tests in the Complete

Auto Transit case are met. (Appendix F, App. 69.) TheHandbook then goes on to specifically addressManufacturing:


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Manufacturing of goods intended to beshipped across state lines is not interstatecommerce. Interstate commerce does notcommence until the goods are shipped. However,the activity of manufacturing produces no grossincome as a general rule, and a business licensemust be computed on gross income from anactivity subject to the privilege tax. A sale ininterstate commerce may be a separate activityfrom the manufacture of the goods. Therefore,there must be an apportionment of the sales

price to the manufacturing process conductedwithin the taxing jurisdiction. A tax on thecapital invested in a business is no longerauthorized by state law.

The pertinent portion of the SCMA Handbook, asentered into evidence at trial, is attached as AppendixF. See App. 70-71.

Notwithstanding the clear mandate of CompleteAuto Transit, Inc. v. Brady, Chairman, Mississippi TaxCommission, 430 U.S. 274, 97 S. Ct. 1076, 51 L. Ed. 2d

326 (1977)s four prong test, as specifically cited bythe South Carolina Municipal Association Handbook(routinely used as the Towns guide for enforcement ofthe Business License Fee Ordinance), the trial courtsfinal Order4 dismissed Kigres arguments that theOrdinance was fatally flawed because it applies togross income earned entirely in interstate commerce.The Court apparently felt that the four prong testcould simply be legislated around by the Town: Kigres

4The Trial Courts Amended Order Ending Case dated September20, 2012 is attached as Appendix B.


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argument ignores the plain language of Section 10-1-20(3) of the Municipal Code which provides that thetax shall be applied to all gross income exceptingtherefrom income from business done wholly outside ofthe town on which a license tax is paid to some othermunicipality or a county and fully reported to thetown. Because Kigre did not pay other license taxes onany of its interstate commerce-generated income, thetrial court ruled that no apportionment was required.The Judge mistakenly interpreted Complete AutoTransit, Inc. v. Brady to provide that income derived

from interstate commerce is treated in the samemanner as any other income and [a]ccordingly, theTown does not need to provide a method for calculatingthe portion of the Towns business license fee which isallocated/derived from interstate commerce.

See Amended Order Ending Case, attached asAppendix B, App. 16-18.

On direct appeal, the South Carolina SupremeCourt affirmed the trial Court, based upon the premisethat the Business License tax is an excise taxnot an

income or a sales tax. The Courts opinion5disregardsthe fact that the Business License tax is based solely ongross revenue (as derived in Kigres case ninety ninepercent from interstate sales), and instead paints thetax as simply a fee on the business owner for theprivilege of doing business in the Town. (App. 2.)Summarizing Kigres arguments as an attack on theordinance based upon Kigres alleged perspective of itbeing anti-business, the Court noted that It is not

5The South Carolina Supreme Court Opinion dated June 4, 2014is attached hereto as Appendix A.


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the function of the courts to pass upon the wisdom orfolly of municipal ordinances or regulations. (App. 3.)

While acknowledging the applicability of theComplete Auto Transit v. Brady four-prong test,(noting that state taxes do not violate the CommerceClause where the activity being taxed has asubstantial nexus with the taxing jurisdiction, and thetax is fairly apportioned, does not discriminate againstinterstate commerce, and is fairly related to benefitsprovided by the state) (App. 4), the Court inexplicablydid not proceed to analyze the facts of the case underthat four prong test, save for dismissing the fairrelation prong requirement by noting that Complete

Auto Transit, Inc. v. Brady requires no detailedaccounting of the services provided to the taxpayer onaccount of the activity being taxed. (App. 3-4.) TheCourt did not address the critical issue of the requiredapportionment of ninety nine percent of Kigres grossincome generated in interstate commerce in its opinion.

REASONS FOR GRANTING THE WRIT

The South Carolina Supreme Courts holding thatthe Business License tax may be constitutionallyapplied to Kigres gross revenues, ninety nine percentof which were derived from the sale of itsmanufactured products in interstate commerce,warrants this Courts review for at least two reasons:

(1) The South Carolina Supreme Courts decisionconflicts with this Courts decision in Complete AutoTransit, Inc. v. Brady, Chairman, Mississippi TaxCommission, 430 U.S. 274, 97 S. Ct. 1076, 51 L. Ed. 2326 (1977), as well as this Courts earlier decisions inInternational Paper Co. v. Massachusetts, 246 U.S.


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135, 38 S. Ct. 292, 62 L. Ed. 624 (1918) and CudahyPacking Co. v. Hinkle, 278 U.S. 460, 49 S. Ct. 204, 73L. Ed. 454 (1929). This conflict with the Complete AutoTransit, Inc. holding on an important and potentiallyrecurring constitutional question warrants an exerciseof this Courts plenary review.

(2) The South Carolina Supreme Court incorrectlydetermined the scope of applicability of the DormantCommerce Clause and the Due Process Clause of theFederal Constitution to this fact scenarioa federalquestion, not a question of state law. Relying uponearlier South Carolina cases where a local excise taxwas held valid in the face of a challenge that it wasbased upon income earned in the State but outside themunicipal jurisdiction, (App. 4) the South CarolinaSupreme Court incorrectly extended that logic toinclude income generated outside the state,notwithstanding this Courts earlier line of casesholding that such taxation violates the DormantCommerce Clause and offends the Due Process Clauseby attempting to tax property beyond the jurisdictionof the municipality and state.

I. The South Carolina Supreme Courts decisionconflicts with decisions of this Court.

In International Paper Co. v. Massachusetts, 246U.S. 135, 38 S. Ct. 292, 62 L. Ed. 624 (1918), this Courtheld that a state excise tax or license fee on the entireauthorized capital of a foreign corporation doing bothlocal and interstate business, although declared by theState to be merely a charge for the privilege ofconducting a local business therein, is essentially and

for every practical purpose, a tax on the entire businessof the corporation, including that which is interstate.


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This Court ruled that the statute, when tested as itmust be, by its substanceits essentialoperationrather than its form or localcharacterization, was unconstitutional and voidbecause it illegally burdened interstate commerce andthis Court found it also wanting in due process,because it laid a tax on property beyond the jurisdictionof the State.

Justice Van Devanter, responding to the State ofMassachusettss argument that earlier, capped excisetaxes had been upheld, stated: It is thus manifest onthe face of all of the cases that they in no waysustained the assumption that because a violation ofthe Constitution was not a large one it would besanctioned, or that a mere opinion as to the degree ofwrong which would arise if the Constitution were

violated was treated as affording a measure of the dutyof enforcing the Constitution. International Paper Co.,246 U.S. at 144.

Eleven years later, Justice McReynolds in CudahyPacking Co. v. Hinkle, 278 U.S. 460, 49 S. Ct. 204, 73

L. Ed. 454 (1929), made clear that a state attemptingto extract license fees from a foreign corporation,based upon its authorized capital stock, when only asmall portion of the corporations property was locatedin state and a relatively small proportion of itsbusiness transacted therein, was invalid as aninterference with the Due Process Clause of theFederal Constitution in attempting to tax propertybeyond the jurisdiction of the state, even though themaximum fee which could be exacted was limited. Inexpressly overruling Baltic Mining Co. v.

Massachusetts, 231 U.S. 68, 34 S. Ct. 15, 58 L. Ed. 127


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(1913), this Court there held It must now be regardedas settled that a State may not burden interstatecommerce or tax property beyond her borders under theguise of regulating or taxing interstate business. So toburden interstate commerce is prohibited by thecommerce clause; and the Fourteenth Amendment doesnot permit taxation of property beyond the States

jurisdiction. The amount demanded is unimportantwhen there is no legitimate basis for the tax. CudahyPacking Oc., 278 U.S. at 466. In accord is Gwin, White& Prince v. Henneford, 305 U.S. 434, 59 S. Ct. 325, 83

L. Ed. 272 (1939), holding that a gross receipts tax onthe privilege of conducting business must be properlyapportioned.

This Courts holdings that State franchise taxesthat do not attempt any apportionment betweenintrastate and interstate revenues must be invalidated,has been relied upon by numerous state courts inrecent years. See, e.g., American Ins. Assoc. v. Lewis,50 N.Y.2d 617 (Ct. App. N.Y. 1980). See also O.H.Martin Co. v. Sharpsburg Borough, 376 Pa. 242, 102 A.2d. 125, 126127 (1954) (recognizing the importantdistinction between intrastate and interstate commercewhen imposing a business privilege tax on grossreceipts, and concluding that a Borough could imposea business privilege tax without apportionmentbecause the ordinance taxed only those receipts derivedfrom intrastate sales, and therefore, there was nothreat of the Borough taxing outside its borders). Inaccord, Wagman, Inc. v. Manchester Township, 112 Pa.Cmwlth. 357, 535 A.2d. 702, 706 (1988).(Apportionment of business privilege tax not required

where the ordinance specifically exempted fromtaxation receipts earned in interstate commerce.)


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The Complete Auto Transit, Inc. v. Brady,Chairman, Mississippi Tax Commission decision, 430U.S. at 274, which is the cornerstone of modernCommerce Clause jurisprudence, set forth the fourprong test under which the Towns Ordinance must beanalyzed. Complete Auto overturned the formerholding of Spector Motor Services v. OConnor, 340 U.S.602, 71 S. Ct. 508, 95 L. Ed. 573 (1951), abrogating thethen-underlying philosophy that interstate commerceshould enjoy a sort of free trade immunity from statetaxation. Complete Auto Transit, Inc., 430 U.S. at 278.

However, it did not grant the States and by extension,municipalities, carte blanche authority to taxinterstate commerce. Instead, it set up a four-prongtest that allowed such interstate taxation as long as:

a. The tax is applied to an activity with asubstantial nexus with the taxing state;

b. Is fairly apportioned;

c. Does not discriminate against interstatecommerce; and,

d. Is fairly related to the services provided bythe state.

Complete Auto Transit, Inc., 430 U.S. at 287.

The Business License Fee Ordinance is faciallyinvalid in that it fails to apportion the ninety ninepercent of Kigres gross income generated by interstatesales of its manufactured products. The fact that theTowns governing body chose to try to avoid therequirements of Complete Auto Transit, Inc. and its

progeny, by including a provision within its Ordinancesimply stating that Gross income from interstate


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commerce shall be included in the gross income forevery business subject to the business license fee,(Ordinance Section 10-1-20(3) App. 30), does notobviate the established decisions of this Court fromComplete Auto Transit, Inc. forward. That would beakin to the Town passing an ordinance stating thatWomen may not vote within the Towns jurisdiction.That ordinance would immediately be struck down asunconstitutional.

Interestingly similar to the case at bar, CompleteAuto Transit, Inc. involved a gross receipts tax imposedon the privilege of doing business, even though it waslabeled a franchise tax and was measured by receiptsfrom gross income. The Mississippi statutechallenged, Mississippi Code Annotated 1942 Section10105 (1972 Supp.), provided There is hereby leviedand assessed and shall be collected, privilege taxes forthe privilege of engaging or continuing in business ordoing business within the state to be determined by theapplication of rates against gross proceeds of sales orgross income or values, as the case may be, as providedin the following sections. Complete Auto Transit,(headnote 1), 430 U.S. at 275.

This Court ultimately upheld the tax because it wasimposed only on in-state activity, but the Court clearlyrecognized that a tax on the privilege of conductingbusiness is subject to the fair apportionmentrequirement. We note again that no claim is madethat the activity is not sufficiently connected to theState to justify a tax, or that the tax is not fairlyrelated to benefits provide the taxpayer, or that the taxdiscriminates against interstate commerce, or that the

tax is not fairly apportioned. Id. at 287.


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The mandatory requirement under Complete AutoTransit, Inc. that interstate commerce-generatedincome be apportioned from income subject to taxationby the Town of Hilton Head Island was incorrectlyoverlooked by the South Carolina Supreme Court.

II. The South Carolina Supreme Courts decisionincorrectly determined the scope ofapplicability of the Dormant CommerceClause and the Due Process Clause, by failingto apply the external consistency test to theOrdinance.

The Commerce Clause of the United StatesConstitution provides that Congress has the power toregulate commerce among the several states. U.S.Const., Art. 1, Section 8, cl.3. However, the CommerceClause is more than an affirmative grant of power; ithas a negative sweep as well. Quill Corp. v. NorthDakota, 504 U.S. 298, 309, 112 S. Ct. 1904, 1911, 119L. Ed. 2d 91 (1992). Even in the absence ofCongressional regulation, the negative implications ofthe Commerce Clause, often referred to as the

Dormant Commerce Clause, prohibit state action thatunduly burdens interstate commerce. General MotorsCorp. v. Tracy, 519 U.S. 278, 287, 117 S. Ct. 811, 818,136 L. Ed. 2d 761 (1997). A state tax withstands aDormant Commerce Clause challenge so long as the taxmeets the four prong requirement of Complete AutoTransit, Inc., set forth in detail above. Complete AutoTransit, Inc. v. Brady, 430 U.S. at 287. That testincludes, as addressed above, the requirement ofappropriate apportionment of income generated ininterstate commerce.


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The central purpose behind the apportionmentrequirement is to ensure that each state taxes only itsfair share of an interstate transaction. Goldberg v.Sweet, 488 U.S. 252, 260, 109 S. Ct. 582, 102 L. Ed. 2d261 (1995). See also Department of Revenue v.

Association of Washington Stevedoring Cos., 435 U.S.734, 98 S.Ct 1388, 55 L. Ed. 2d 682 (1978).( A state taximpermissibly impedes on interstate commerce whenit does not fairly reflect the income attributable to thetaxing jurisdiction.) See also Hartman, FederalLimitations on State and Local Taxation, at Section

2.17 (the principle of fair share is derived from andinterrelated with the Supreme Courts multipletaxation doctrine.) When a state taxes more than itsfair share, it creates the risk that the portion of valueby which it exceeded its fair share will be taxed againby a state properly laying claim to its fair share of the

value being taxed, thereby subjecting the taxpayer tomultiple taxation. See Oklahoma Tax Commission v.Jefferson Lines, 514 U.S. 175, 184, 115 S. Ct. 1331, 131L. Ed. 2d 261 (1995)(avoidance of the risk of multipletaxation is the test of apportionment).

As a general rule, gross receipts taxes imposed uponreceipts from interstate commerce are prohibitedunless the tax is apportioned to the taxpayersactivities in the state. See generally, Laurence H.Tribe, American Constitutional Law, Sections 6-19 and6-20, at p. 465 (2ndEd. 1988). Historically, however,this Court has not required apportionment of grossreceipts from activities involving manufacturing andsales because the receipts occur in different states. Inthat regard, this Court has explained that unlike other

business activities, manufacturing and sales areseparate and discrete activities, each of which


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transpire completely within a single, separatejurisdiction. See, e.g., Tyler Pipe Industries, Inc. v.Washington State Dept of Revenue, 483 U.S. 232, 107S. Ct. 2819, 97 L. Ed. 2d 199 (1987). Thus, in levying agross receipts tax, the state of origin can tax themanufacturing activity, and the state of destinationcan tax the selling activity, without the risk of multipletaxation for the same activity.

A sale of goods is most readily viewed as adiscrete event facilitated by the laws andamenities of the place of the sale, and thetransaction itself does not readily reveal theextent to which completed or anticipatedinterstate activity affects the value on which abuyer is taxed. We have therefore consistentlyapproved taxation of sales without any divisionof the tax base among different States, and haveinstead held such taxes properly measurable bythe gross charge for the purchase, regardless ofany activity outside the taxing jurisdiction thatmight have preceded the sale or might occur inthe future.

Oklahoma Tax Commission v. Jefferson Lines, id., 514U.S. at 186, 115 S. Ct. 1331.

What Oklahoma Tax Commission v. Jefferson Linesmade clear was that in cases of manufacturing, thereis a natural apportionment, because the sales madeout-of-state are separate and distinct, and should onlybe properly taxed by the states of destination (wherethe products are sold).

As opposed to the Town of Hilton Head Islandsposition in this case, this Court has never held that


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gross receipts taxes as a whole are immune fromapportionment. In fact, in recent years, this Court hasdistanced itself from the gross receipts tax and salestax analogy, and made clear in Oklahoma TaxCommission v. Jefferson Lines that a gross receipts taxis simply a variety of tax on income, which [is] requiredto be apportioned to reflect the location of the variousactivities by which it [is] earned.514 U.S. at 190, 115S. Ct. 1331 (emphasis added). Tax commentators hailedOklahoma Tax Commission v. Jefferson Lines forbreaking the misconceived analogy between sales

taxes and gross receipts taxes. See Piper & Eggen,Gross Receipts Taxes: General Principles, 1994, atSection 1610:0008a.

While Oklahoma Tax Commission v. Jefferson Linessustained a states power to impose unapportionedretail sales taxes on the sale of services involvinginterstate activities, it strengthened taxpayers abilityto assert the position that gross receipt taxes imposedon business activity must be fairly apportioned if theyare measured by receipts from interstate businessactivity. By drawing a sharp line between grossreceipts taxes and retail sales taxes and characterizingthe gross receipts tax in Central Greyhound Lines, Inc.

v. Mealey, 334 U.S. 653, 68 S. Ct. 1260 (1948), as akinto an income tax, this Court called into question someof its earlier decisions that approved, with littleanalysis, unapportioned gross receipts taxes merelybecause they were imposed on a local subject andcould loosely be analogized to retail sales taxes. JeromeR. Hellerstein & Walter Hellerstein, State Taxation,Section 18.08[5], at 18-65 to -66 (3d ed. 1998) (footnote

omitted).


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In addition, since the Oklahoma Tax Commission v.Jefferson Lines decision, other jurisdictions haverecognized taxpayers rights to apportionment of agross receipts tax, just like all other forms of taxationon income. See, e.g., Polychrome Intl Corp. v. Krigger,4 F.3d 1522, 1540 (3d Cir. 1993)(any taxincludingone imposed on, or measured by, gross receipts frominterstate and foreign commercemust be apportionedto reflect only that business activity attributable tointrastate commerce.); City of Winchester v. AmericanWoodmark Corp., 252 Va. 98, 471 S.E.2d 495, 498

(1996) (recognizing taxpayers right to apportionmentof a gross receipts tax); Southern Pacific Transp. Co. v.Arizona, Dept of Revenue, 202 Ariz. 326, 44 P.3d 1006,1014 (2002)(In our view, Jefferson Lines compels the

view that gross receipts taxesmust be apportioned tocomply with theCommerce Clause.); see generallyHellerstein & Hellerstein, State Taxation, Section18.08[5].

To be fairly apportioned, a tax must be bothinternally consistent and externally consistent. SeeGoldberg v. Sweet, 488 U.S. at 260-61.This is the lynchpin analysis that reveals the Town of Hilton HeadIslands Business License Fee must be apportioned;otherwise it fails the external consistency test.

The Pennsylvania Supreme Court provided adetailed analysis of a similar situation in its holdingThe Philadelphia Eagles Football Club, Inc. v. City ofPhiladelphia, 573 Pa. 189, 823 A.2d 109 (2003), a casewhere the City of Philadelphia levied a BusinessPrivilege Tax on the team, which then challenged theprivilege tax for failing to apportion from consideration

the revenues generated by the team when it played


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outside of the State of Pennsylvania. In a detailed, far-reaching analysis of the history of the apportionmentprong of the Complete Auto Transit, Inc. test, thePennsylvania Supreme Court held the Citys failure toapportion the teams revenue generated out of state

violated the Commerce Clause. That analysis isdirectly on point in this case.

After tracking the history of the Complete AutoTransit, Inc. four prong test through Oklahoma TaxCommission v. Jefferson Lines, the PennsylvaniaSupreme Court simply could not agree with the Citysargument that a gross receipts tax, identical in natureto the Town of Hilton Head Islands Business LicenseFee, is wholly immune from the constitutionalrequirement of fair apportionment. 573 Pa. at 225.

Turning its attention to the application of theapportionment requirement to the football teams grossreceipts, the Court addressed both the internal andexternal consistency tests. There, as here, the Courtproperly determined that the internal consistency testwould be met in the instant fact situation. (Here, the

Town ordinance contains a provision stating that theTown would reduce the amount of the Business LicenseTax charged by Hilton Head by whatever similar tax abusiness paid out of state. Kigre presumes this Court,like the Pennsylvania Supreme Court, would find thatprovision would alleviate any concern about doubletaxation and thus met the standards of the internalconsistency test.)

However, the Town of Hilton Head IslandsBusiness License tax, just like the City of

Philadelphias Business Privilege Tax, fails the


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external consistency test articulated by this Court inGoldberg v. Sweet.

The external consistency requirement is a subjectivetest that asks whether a state taxed only that portionof the revenues from the interstate activity whichreasonably reflects the instate component of theactivity being taxed. Goldberg, 488 U.S. at 262, 109 S.Ct. 582. External consistency looks to the economic

justification for the states claim upon the value beingtaxed in order to discover whether a state is taxingeconomic activity that occurred in other jurisdictions.Oklahoma Tax Commission v. Jefferson Lines, 514 U.S.at 185, 115 S. Ct. 1331. In essence, there must be arational relationship between the income attributed tothe [s]tate and the intrastate values of the businessbeing taxed. Philadelphia Eagles Football Club, id., 573Pa. 226, citing Hunt-Wesson, Inc. v. Franchise Tax. Bd.Of California, 528 U.S. 458, 464, 120 S. Ct. 1022, 145 L.Ed. 2d 974 (2000)(citations omitted); see also, MoormanMfg. Co. v. Bair, 437 U.S. 267, 273, 98 S. Ct. 2340, 57L. Ed. 2d 197 (1978); Ronald D. Rotunda & John E.Nowak, Treatise on Constitutional Law, Section 13.5(3)(2nd Ed. 1992).

As the Pennsylvania Supreme Court held, anobjecting taxpayer (such as Kigre), should be successfulin striking down a tax if it demonstrates by clear andcogent evidence that the income attributed to the stateeither is out of all appropriate proportion to thebusiness transacted by the [taxpayer] in the state,Hans Rees Sons, Inc. v. North Carolina ex rel.Maxwell, 283 U.S. 123, 135, 51 S. Ct. 385, 75 L. Ed. 879(1931), has led to a grossly distorted result for the

taxpayer, Norfolk & Western Ry. Co. v. Missouri State


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Tax Commn, 390 U.S. 317, 326, 88 S. Ct. 995, 19 L. Ed.2d 1201 (1968), or is inherently arbitrary orproduced an unreasonable result, see Moorman Mfg.Co. v. Bair, 437 U.S. 267, at 274 (quoting UnderwoodTypewriter Co. v. Chamberlain, 254 U.S. 113, 121, 41S. Ct. 45, 65 L. Ed. 165 (1920), and citing Norfolk &Western Ry. Co., 297 U.S. 682, 56 S. Ct. 625, 80 L. Ed.977; Bass, Ratcliff & Gretton v. State Tax Commission,266 U.S. 271, 45 S. Ct. 82, 69 L. Ed. 282 (1924). SeePhiladelphia Eagles Football Club, Inc., id., 573 Pa. at227.

Applying the external consistency test in that factscenario, the Pennsylvania Supreme Court determinedthat the Citys levy on 100 percent of the FootballClubs media receipts, when half of the games wereplayed and televised from states outside ofPennsylvania, was inherently arbitrary and had norational relationship to the Football Clubs businessactivity that occurred in Philadelphia. Id. at 227(citations omitted). Focusing on the revenues generatedoutside of Pennsylvania, the Court noted that the Citysbusiness privilege tax actually doubled the Clubstax assessment, and in this regard, the Citys BPTassessment was plainly out of all proportion to theFootball Clubs business activities in Philadelphia thatgenerated the payment of media receipts. Id. at 228.

The Pennsylvania Supreme Court went on to holdthat the trial court had erred in finding that theexternal consistency test asks whether the City had a

justification for taxing any of the media receipts, ratherthan analyzing whether the City could fairly lay claimto all of the media receipts. Again referring to

Oklahoma Tax Commission v. Jefferson Lines, the


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Court noted that the external consistency test looks tothe economic justification for a jurisdictions claimsupon the value being taxed in order to discover whethera state is taxing economic activity that occurred inother jurisdictions. Although domicile itself affords a

jurisdiction the ability to tax the income of adomiciliary corporation, that jurisdiction may not taxall of that income where another state taxes, or has theauthority to tax, an apportioned share of that income.Id. at 230, citing Japan Line Ltd. v. County of Los

Angeles, 441 U.S. 434, 99 S. Ct. 1813, 60 L. Ed. 2d 336

(1979). Moreover, the Commerce Clause precludes ataxing jurisdiction from denying a taxpayer the right toa division of the tax base when a portion of that taxbase is taxable in other jurisdictions. Id. at 231, citingJerome R. Hellerstein & Walter Hellerstein, StateTaxation, Section 8.02[4][a](3d Ed. 1998) (a state maynot restrict a taxpayers right to divide the tax base ifit conflicts with the taxpayers rights under theConstitution). Cf. James H. Peters, Sales/Use Taxes: IsFair Apportionment a Proper Test?, 6 State Tax Notes105, 105 (1994) (the primary objective of the fairness

principle is to confine a tax to activities ortransactions occurring within the taxing state.)

From that analysis, the Pennsylvania SupremeCourt ruled that [t]he fact that the Football Club wascommercially domiciled in Philadelphia and playedsome of its games there only meant the City wasentitled to tax its fair share of the receipts, not all ofthe receipts as the Commonwealth Court found. Id. at231.

[W]e disagree with the Commonwealth

Courts conclusion that the imposition of the


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BPT in the instant matter was externallyconsistent, and instead find that it was grosslydisproportionate to the activity that actuallyoccurred in the City. Rather than taxing 100 %of the media receipts, the City should haveapportioned the tax to exclude from the grossreceipts calculation of the BPT the substantialmedia receipts attributable to the one out ofevery two football games that were played by theEagles Team in, and telecast from, other taxing

jurisdictions. As the City failed to do so, its

imposition of the BPT in the instant case failedthe external consistency test and violated theCommerce Clause.

Id., 573 Pa. at 232.

Applying the external consistency test to the Townof Hilton Head Islands Ordinance in the instant case,reveals that the Towns actions against Kigre aregrossly, and inequitably, over-reaching. Whereas theCourt in the Eagles case found that the Citys improperapplication of the tax to out-of-state generated

revenues effectively doubled the amount that shouldhave been taxed, the admitted facts of this case showthat the Towns imposition of its privilege tax onninety nine percent of Kigres income generated by out-of-state sales, effectively increased what the Town wasentitled to tax by a multiple of one hundred. It wouldstretch credibility for the Town to argue that increasingits tax base from a legitimate $1,000 to $100,000,which is exactly the ratio at play here, would not beinherently arbitrary or produced an unreasonableresult or lead to a grossly distorted result. See


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Philadelphia Eagles Football Club, Inc., id., 573 Pa. at227.

The trial court and the South Carolina SupremeCourt failed to properly apply the external consistencytest articulated in Goldberg v. Sweet to the Town ofHilton Head Islands Business License Fee Ordinance.The result was to deny all taxpayers in South Carolinawho generate substantial revenue from out-of-statesales, the protection of apportionment of incomerequired by the U.S. Supreme Court and the CommerceClause.

As this Court considers this Petition For a Writ ofCertiorari, Kigre, Inc. respectfully requests the Courtkeep in mind Justices Powell and Blackmuns propheticcautionary dissenting opinion in Moorman Mfg. Co.: Itis the duty of this Court to make the delicateadjustment between the national interest in free andopen trade and the legitimate interest of the individualStates in exercising their taxing powers. This dutymust be performed with careful attention to thesettings of particular cases and consideration of their

special facts. 437 U.S. at 283 (citations omitted). Anexcise tax is subject to the apportionment requirementof Complete Auto Transit, Inc. v. Brady, and theTowns admitted failure to apportion any of Kigres 99percent out-of-state gross income from the effect of itsBusiness License tax, fails the external consistency testof Goldberg v. Sweet. Kigre, Inc. was and is entitled tohave its gross income apportioned to in-state sales, andthe Town wrongfully refuses to take that step. TheOrdinance must be struck down as to its application toKigre and other similarly situated businesses.


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CONCLUSIONKigre, Inc. respectfully requests that the Petition

for a Writ of Certiorari be granted or, in thealternative, that the Court review and summarilyreverse the erroneous decision of the South CarolinaSupreme Court.

Respectfully submitted,

THOMAS C. TAYLORCounsel of Record

Law Office of Thomas C. Taylor, LLCP.O. Box 5550Hilton Head Island, SC 29938(843) [email protected]

Counsel for Petitioner Kigre, Inc.


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APPENDIX


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APPENDIXTABLE OF CONTENTS

Appendix A Opinion in the Supreme Court ofSouth Carolina(June 4, 2014) . . . . . . . . . . . . . . . . App. 1

Appendix B Amended Order Ending Case in theCourt of Common Pleas FourteenthJudicial Circuit(September 20, 2012) . . . . . . . . . . App. 6

Appendix C Opinion in the Supreme Court ofSouth Carolina(July 24, 2014) . . . . . . . . . . . . . . App. 28

Appendix D OrdinanceChapter 1, Business and ProfessionalLicenses . . . . . . . . . . . . . . . . . . . App. 29

Appendix E Excerpts of Trial Transcript in theCourt of Common Pleas, State ofSouth Carolina, County of Beaufort(December 8, 2010) . . . . . . . . . . App. 63

Appendix F Defendants Exhibit 2, 2006 BusinessLicense Handbook, Municipal

Association of SC . . . . . . . . . . . . App. 67


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APPENDIX A

THE STATE OF SOUTH CAROLINAIn The Supreme Court

Appellate Case No. 2012-213239

[Filed June 4, 2014]______________________________________Town of Hilton Head Island, Respondent, )

)v. ))

Kigre, Inc., Appellant. )______________________________________ )

Appeal from Beaufort CountyThe Honorable Marvin H. Dukes, III,

Special Circuit Court Judge_______________

Opinion No. 27396

Heard April 15, 2014 Filed June 4, 2014_______________

AFFIRMED_______________

Thomas C. Taylor, of Hilton Head Island, forAppellant.

Gregory M. Alford, of Hilton Head Island, forRespondent.

_______________

PER CURIAM: This direct appeal involves aconstitutional challenge to the Town of Hilton Head


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Islands (Town) business license tax ordinance(Ordinance), which requires businesses within theTown to pay an annual license fee based upon abusinesss classification and gross income. We affirmthe trial courts finding that the Ordinance is valid.

The legislature has specifically granted municipalitiesthe authority to enact ordinances and levy a businesslicense tax ongross income.S.C. Code Ann. 5-7-30(Supp. 2013) (emphasis added). We emphasize that thebusiness license fee is an excise taxnot an income ora sales tax. A business license fee is a tax on theprivilege of doing business within the Town, andtherefore, it is the manufacturing activity of AppellantKigre, Inc. (Kigre), which occurs wholly within theTown limits, and not Kigres receipt of income or salesof its products in interstate commerce that is thebusiness activity being taxed. Kigre has no othermanufacturing facility and pays no license fee to anyother taxing jurisdiction.See Carter v. Linder,303 S.C.119, 123, 399 S.E.2d 423, 425 (1990) (finding [a]business license fee is an excise tax on the owner forthe privilege of doing business).

The Ordinance requires [e]very person engaged orintending to engage in any calling, business, occupationor profession . . . in whole or in part, within the limitsof the town to obtain a business license and pay alicense fee, the amount of which is determined by theclassification of the business and its gross income.SeeHilton Head Island, S.C., Code of Ordinances 10-1-10(Sept. 26, 1983). The Ordinance defines gross incomeas:

The total revenue of a business, received oraccrued, for one fiscal year collected or to be


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collected by reason of the conduct of businesswithin the town, excepting therefrom incomefrom business done wholly outside of the townon which a license tax is paid to some othermunicipality or a county and fully reported tothe town. Gross income from interstatecommerce shall be included in the gross incomefor every business subject to a business licensefee.

Id. 10-1-20(3) (Aug. 1, 2006). Further, section 10-1-60provides a deduction from gross income for businessdone wholly outside of the town on which a license taxis paid to some other municipality or a county. Aspreviously noted, Kigre does not pay any license tax toany other municipality or county, either in SouthCarolina or anywhere in the world.

Kigre has clothed its many arguments in the premisethat the Ordinance is not sound policy, for it is anti-business. However, it is not within our province toweigh-in on the wisdom of legislative policydeterminations. Our judicial role is limited to

determining whether the Ordinance withstands Kigresconstitutional challenges. See Dunes West Golf Club)

LLC v. Town of Mount Pleasant, 401 S.C. 280, 300, 737S.E.2d 601, 611 (2013) (It is not the function of thecourts to pass upon the wisdom or folly of municipalordinances or regulations. (citation omitted)).

We have carefully reviewed the record on appeal andfind Kigres numerous challenges to be without merit.We affirm pursuant to the following authorities: Okla.Tax Commn v. Jefferson Lines, Inc., 514 U.S. 175, 199

(1995) (The fair relation prong of Complete Autorequires no detailed accounting of the services provided


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to the taxpayer on account of the activity being taxed,nor, indeed, is a State limited to offsetting the publiccosts created by the taxed activity.); Commonwealth

Edison Co. v. Montana,453 U.S. 609, 623-24 (1981)([I]t was not the purpose of the commerce clause torelieve those engaged in interstate commerce fromtheir just share of state tax burden even though itincreases the cost of doing business. (quotations andcitation omitted)); Complete Auto Transit, Inc. v. Brady,430 U.S. 274, 279-87 (1977) (overruling prior casesfinding interstate commerce cannot be taxed by states

and finding state taxes do not violate the CommerceClause where the activity being taxed has a substantialnexus with the taxing jurisdiction, and the tax is fairlyapportioned, does not discriminate against interstatecommerce, and is fairly related to benefits provided bythe state);Sunset Cay, LLC v. City of Folly Beach,357S.C. 414, 425, 593 S.E.2d 462, 467 (2004) (A municipalordinance is a legislative enactment and is presumed tobe constitutional. The burden of proving the invalidityof an ordinance is on the party attacking it. (quotingWhaley v. Dorchester Cnty. Zoning Bd. of Appeals, 337

S.C. 568, 575, 524 S.E.2d 404, 408 (1999)));Eli Witt Co.v. City of W. Columbia, 309 S.C. 555, 559, 425 S.E.2d16, 18 (1992) (It was not contemplated that the

various phases of a business should be segregated andonly that part taxed which was actually carried onwithin the corporate limits. The [business license] taxwas imposed for the privilege of maintaining orconducting a place of business within that municipalityand it was intended that the business should beconsidered as a whole. The gross income or volume ofsuch business is merely made the basis on which the

tax is graduated. (citation omitted)); Carter, 303 S.C.at 124-25, 399 S.E.2d at 426 (finding a business license


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tax which classifies businesses and assesses taxes at agraduated rate according to the gross income of thebusiness does not constitute an equal protection

violation); S. Bell Tel. & Tel. Co. v. City ofSpartanburg,285 S.C. 495, 497, 331 S.E.2d 333, 334(1985) (The burden is on the taxpayer to proveunconstitutionality beyond a reasonable doubt.); N.Charleston Land Corp. v. City of N. Charleston,281S.C. 470, 474, 316 S.E.2d 137, 139 (1984) (finding adifferent municipalitys similar business license feeordinance employing the Standard Industrial

Classification (SIC) system to be constitutionallypermissible).

AFFIRMED.

TOAL, C.J., PLEICONES, BEATTY, KITTREDGEand HEARN, JJ., concur.


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APPENDIX B

STATE OF SOUTH CAROLINACOUNTY OF BEAUFORT

IN THE COURT OF COMMON PLEASFOURTEENTH JUDICIAL CIRCUIT

CASE NO.: 06-CP-07-796

[Filed September 20, 2012]__________________________TOWN OF HILTON HEAD )ISLAND )

)Plaintiff, )

)vs. )

)KIGRE, INC. )

)

Defendant. )__________________________ )

AMENDED ORDER ENDING CASE

This matter originally came before me for trial onDecember 8 and 9, 2010 and April 27, 2011. Present forthe Town of Hilton Head Island (the Town), wasGregory M. Alford, and on behalf of Kigre, Inc., wasThomas C. Taylor. I took testimony and listened to theextensive and well made arguments of counsel. Havingheard and considered the testimony and arguments,

and having studied the exhibits and applicable law, I


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issued an Order Ending the Case on February 2, 2012.

1

Defendant filed a Rule 59 Motion for Reconsiderationand I heard arguments on that motion on May 17,2012. I decline to change the rulings contained in theFebruary 7, 2012 Order however, I am changingcertain verbiage contained in that Order. Accordingly,this Amended Order Ending Case hereby replaces theOrder Ending Case filed February 7, 2012.

Background and Facts

This case involves the Towns business license fee

established in Section 10-1-10 et. seq. of the TownsMunicipal Code pursuant to the authority granted inS.C. Code Ann. 5-7-30. The Town audited Kigresbusiness license fee liability for the 2002, 2003, 2004,and 2005 license periods. While the audit wasunderway, Kigre corresponded with the Town anddenied liability to the payment of any business licensefee, and threatened litigation against the Town.

The Town filed this action against Kigre on April 3,2006, seeking declaratory judgment as to the validity

of the arguments and exemptions made and claimed byKigre and to collect past due amounts. On August 17,2006, Kigre filed its Answer and Counterclaim. TheTown filed its Reply on September 13, 2006.2

1Both parties made cross motions for Summary Judgment whichI heard and took under advisement. Those motions are herebydenied and this decision is based upon the trial and all matterspresented therein.

2Kigre filed its Amended Answer and Counterclaim on September8, 2009, and the Town filed its Reply on September 16, 2009.


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As a result of the audit performed by the Town,Kigre was assessed $41,645.81 for past due businesslicense fees and penalties. On November 13, 2006,Kigre paid the amount due under protest.

Kigre denied liability for payment of the businesslicense fee, and asserted that the Towns businesslicense fee ordinance was unenforceable as to Kigre,and that Kigre was exempt from payment of thebusiness license fee on numerous grounds. Amongother things, Kigre argued that under Section 10-1-10,

et. seq. of the Towns Municipal Code, the Town shouldhave given Kigre a hearing before Town Councilinstead of bringing the declaratory action.

In its pleadings, during motion hearings and attrial, Kigre claimed that the Towns business licensefee was unconstitutional and /or unenforceable on thefollowing grounds:3

(1) The Ordinance cannot be applied to Kigresbusiness because Kigres sales are almostexclusively done in interstate commerce;

(2) The Ordinance does not properly apportionbetween sale of goods and manufacturing;

(3) The Ordinance does not fairly apportion thefee among all businesses because it usesincorrect or outdated datum for theprofitability of businesses and uses an

3 Kigres Amended Answer and Counterclaim sets forth tendefenses and counterclaims, however the Court believes that the6 grounds set forth above encompass all of the claims made byKigre and the arguments presented by Kigre at trial.


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outdated SIC (Standard Industrial Code)system, under which Kigre is not properlyclassified;

(4) The License Fee is not fairly related to theservices which the Town provides;

(5) The Business License Fee is enforced in adiscriminatory manner; and,

(6) The Town is estopped from charging Kigreanything more the minimum fee because the

Town has accepted Kigres assertionsregarding exemptions prior to 2006.

Findings of Fact

1. The Town is a municipal corporation organizedand existing pursuant to the laws of the State of SouthCarolina, located in Beaufort County.

2. Kigre is an Ohio corporation and is authorizedby the State of South Carolina to conduct business inSouth Carolina. Since 1986, Kigres business has beenlocated within the corporate limits of the Town. Kigreis engaged in the manufacturing, assembling and salesof certain specialized laser devices which businessgenerates a gross income. Within the corporate limitsof the Town, Kigre owns and operates a 23,000 squarefoot facility which includes a clean room, machiningcenter, offices and laboratories. In its Business License

Applications, Kigre describes its business as mfg laserand laser glass, (license form for 2005); medical lasermanufacturing, (license form for 2003); lasercomponent mfg, (license form for 2002). The Town

placed Kigre in a classification based on thedescriptions given by Kigre and in accordance with


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Section 10-1-190 of the Towns Municipal Code, whichutilizes the Standard Industrial Classification (SIC), acommonly used tool for placing businesses into theproper classification. It is undisputed that prior to theinception of this litigation that Kigre never objected toits classification.

3. Jeffrey Meyers testified that Kigre has a grossincome which is derived from its business activitiesfrom its operations within the Town.4Jeffrey Meyerstestified that Kigre does not have any other offices orfacilities, and it does not pay any license or franchisefee in any other country, state, county or municipality,other than the fee paid to the Ohio Secretary of Stateto maintain its Ohio Corporate Charter. I find these tobe matters of fact.

4. Kigre has held a business license from the Townof Hilton Head since 1987. However, the licenseapplications completed by Jeffrey Meyers show thatKigre paid the minimum amount due of $62.50 becauseKigre claimed that the business license fee was N/Ato its income. The Town did not challenge the claim by

Kigre that its income was exempt until March of 2004,when the Town notified Kigre that it was going to auditKigres records to determine if Kigre was making thecorrect payment and if not, what amount was due. OnMarch 24, 2004, Kigre responded via e-mail that the

4 During Trial, the parties agreed that the exact financialinformation would be kept out of the record but that if Kigreschallenges to the Business License Fee Ordinance failed, then theTown would have access to those records to prepare anassessment, and that Kigre could then appear before Town Councilto challenge any amounts alleged due, prior to the Town takingany action with respect to Kigres business license.


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Kigres revenues were exempt because they werederived from interstate commerce. Thereafter, theTown and Kigre engaged in correspondence whichresulted in an audit.

5. As a result of the correspondence from Kigre,and the claims asserted therein, the Town commencedthis action, seeking a declaratory judgment on the

validity of Kigres claims.

6. Following the audit, the Town notified Kigrethat business license fees and penalties were due in the

amount of $41,645.81. On November 13, 2006, Kigrepaid the $41,645.81 and Kigres counsel submitted adetailed letter setting forth 25 grounds as to why theTowns business License Fee ordinance is invalid andwhy Kigre was exempt from payment of the businesslicense fee.

7. At the trial, Kigre argued that it should havebeen afforded a hearing before the Town Council forthe Town on its claims related to the validity of thebusiness license fee ordinance and Kigres claims that

it was exempt from paying the business license fee.Material to these arguments, Sec. 10-1-150 of theTowns Municipal Code reads, in relevant part:

When the license inspector determines that:. . .

(2) A licensee has breached any conditionupon which his license was issued or has failedto comply with the provisions of this chapter;. . .

the license inspector shall give written notice to

the licensee or the person in control of the


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business within the town by personal service orcertified mail that the license is suspendedpending a hearing before town council for thepurpose of determining whether the licenseshould be revoked. The notice shall state thetime and place at which the hearing is to beheld, which shall be at a regular or specialcouncil meeting within thirty (30) days from thedate of service of the notice. The notice shallcontain a brief statement of the reasons forsuspension and proposed revocation and a copy

of the applicable provisions of this chapter.In addition, Sec. 10-1-160, of the Towns MunicipalCode reads as follows:

(a) Any person aggrieved by a finalassessment or a denial of a business license bythe license inspector may appeal the decision totown council by written request stating thereasons therefor filed with the town clerk withinten (10) days after the payment of theassessment under protest or notice of denial is

received.

(b) An appeal or a hearing on revocation shallbe held by town council within thirty (30) daysafter receipt of a request for appeal or service ofnotice of suspension at a regular or specialmeeting of which the applicant or licensee hasbeen given written notice. At the hearing allparties shall have the right to be represented bycounsel, to present testimony and evidence andto cross-examine witnesses. The proceedings

shall be recorded and transcribed at the expenseof the party so requesting. The rules of evidence


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and procedure prescribed by town council shallgovern the hearing. Town council shall bymajority vote of members present render awritten decision based on findings of fact andthe application of the standards herein whichshall be served upon all parties or theirrepresentatives and shall be final unlessappealed to a court of competent jurisdictionwithin ten (10) days after service.

(c) No person shall be subject to prosecutionfor doing business without a license until theexpiration of ten (10) days after written notice ofdenial or revocation which is not appealed oruntil after final judgment of court upholdingdenial or revocation.

In this case, no hearing was held before TownCouncil apparently due to oversight. Rather than seekto suspend the license or criminally prosecute Kigre fornon-payment of the license fee, the Town soughtdeclaratory judgment to determine the validity of thedefenses to payment asserted by Kigre. Neither party

argued that this Court did not have jurisdiction basedon a failure to exhaust administrative remedies.Because the Town did not suspend Kigres businesslicense or prosecute Kigre for non-payment, the factthat a hearing was not held is of little or no import tothe legal and factual claims before this Court.5

8. At trial, the parties stipulated that theirdisputes regarding Kigres claims to exemption, Kigres

5At trial, the Town conceded that it had waived its right to collectthe $41,645.81 in fees and penalties.


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challenges to the Towns ordinance and its applicationto Kigre, and the Towns claim regarding the invalidityof Kigres claims, were all ripe for adjudication.

Conclusions of Law

1. The Town is authorized to establish a businesslicense fee by S.C. Code Ann. 5-7-30 which states inpart as follows:

Each municipality of the State, in addition to thepowers conferred to its specific form of

government, may enact regulations, resolutions,and ordinances, not inconsistent with theConstitution and general law of this State,including the exercise of powers in relation toroads, streets, markets, law enforcement, health,and order in the municipality or respecting anysubject which appears to it necessary and properfor the security, general welfare, andconvenience of the municipality or for preservinghealth, peace, order, and good government in it,including the authority to levy and collect taxes

on real and personal property and as otherwiseauthorized in this section, make assessments,and establish uniform service charges relating tothem; the authority to . . . levy a business licensetax on gross income,. . . . (emphasis added).

2. The Town established a business license fee inSection 10-1-10 of the Towns Municipal Code, whichstates in part as follows:

License required. Every person engaged orintending to engage in any calling, business,

occupation or profession listed in the rateclassification index portion of this chapter, in


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whole or in part, within the limits of the town, isrequired to pay an annual license fee and obtaina business license as herein provided. . . .(emphasis added).

3. Kigre is doing business within the limits of theTown limits and is a business and has gross incomeas defined in Section 10-1-20 of the Towns MunicipalCode, which includes gross income from interstatecommerce. The Section reads in part as follows:

The following words, terms and phrases, when

used in this chapter shall have the meaningascribed herein:

(1) Business:A calling, occupation, profession oractivity engaged in with the object of gain,benefit or advantage, either directly orindirectly . . . .

. . .

(3) Gross income: The total revenue of a business,received or accrued, for one fiscal year collected

or to be collected by reason of the conduct ofbusiness within the town, excepting therefromincome from business done wholly outside of thetown on which a license tax is paid to some othermunicipality or a county and fully reported tothe town. Gross income from interstate commerceshall be included in the gross income for everybusiness subject to a business license fee. Thegross income for business license purposes shallconform to the gross income reported to theInternal Revenue Service, the South Carolina

Department of Revenue and Taxation, or theSouth Carolina Insurance Commission. . . . .


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4. Based on the information provided by Kigre inits applications, the Town established a classificationfor Kigre pursuant to Section 10-1-190 of the TownsMunicipal Code. Classification is defined in Section10-1-20 of the Towns Municipal Code, which states:

The following words, terms and phrases, whenused in this chapter shall have the meaningascribed herein:. . .

(2) Classification: That division of businesses by

major groups subject to the same license rate, asdetermined by a calculated index of ability topay based on national averages, benefits,equalization of tax burden, relationship ofservices, or other basis deemed appropriate bythe town council.

Section 10-1-190 of the Towns Municipal Codestates:

Classification rate . . . The license fee for eachclass of business shall be computed in

accordance with the following rates and with theStandard Industrial Classification (SIC) Manual1987, except in cases of conflict between theprovisions of the SIC and the Town Code, theTown Code provisions shall prevail. TABLEINSET:

5. Kigre argues that the Towns Ordinance isfatally flawed because it attempts to attach to incomeearned entirely in interstate commerce. However,Kigres argument ignores the plain language of Section

10-1-20(3) of the Municipal Code, which defines grossincome as follows:


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(3) Gross income: The total revenue of abusiness, received or accrued, for one fiscal yearcollected or to be collected by reason of theconduct of business within the town, exceptingtherefrom income from business donewholly outside of the town on which alicense tax is paid to some othermunicipality or a county and fully reportedto the town. Gross income from interstatecommerce shall be included in the gross incomefor every business subject to a business license

fee. . . . (emphasis added).Section 10-1-60 also provides for a deduction for tax

paid to another municipality and states in part:

No deductions from gross income shall bemade, except from income from business donewholly outside of the town on which a license taxis paid to some other municipality or a county,or income which cannot be taxed pursuant tostate law. The applicant shall have the burdento establish the right to a deduction by

satisfactory records and proof.

The fee only takes into account that income whichis connected with the Town and which has not beentaxed in another jurisdiction. The distinction does notdepend on whether or not the income is derived ininterstate commerce. The income derived frominterstate commerce is treated in the same manner asany other income. There is no question that interstatecommerce may be made to pay its way. Complete Auto,

Inc. v. Brady, 430 U.S. 274 at 284 (1977). Accordingly,

the Town does not need to provide a method forcalculating the portion of the Towns business license


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fee which is allocated/derived from interstatecommerce. The validity of the business license fee doesnot depend upon income being characterized as derivedfrom interstate commerce or any other source. Thebusiness license fee applies equally to all income whichis connected with the business conducted within theTown.

Kigre manufactures/assembles components in theTown and sells the finished product. Without themanufacturing/assembly side of the business conductedwithin the Town, the sales would not take place asthere would be no product to sell. South Carolinacourts have recognized that a municipal corporationhas the right to impose a license fee for conductingbusiness within its limits, even though a portion ofbusiness is carried on or completed outside of themunicipality. In Triplett v. City of Chester,209 S.C.455, 40 S.E.2d 684 (1946), the South Carolina SupremeCourt considered the application of a municipalbusiness license tax on a construction contractor who,while conducting his administrative and executivework within the city limits and storing equipmenttherein, did all of his construction work outside thecity. The Court stated:

We are unable to agree with the soundness ofrespondents contention that no part of hisbusiness was conducted within the corporatelimits of Chester. It is the privilege of doingbusiness within the municipality that is soughtto be taxed. The administrative and executivework, an indispensable phase of respondentsbusiness, was conducted in the office

established, maintained and operated in the


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City. His equipment when not in use was storedin the City. This portion of his business enjoyedall the advantages afforded by the municipalgovernment of Chester to any other businessconducted within its corporate limits. We cannotdissociate the managerial features of thebusiness which were conducted within the City,along with the storing of equipment, from themanual execution of the work which was donewithout the City. All are essential functions ofthe general contracting business in which

respondent is engaged. It frequently happensthat there is a business located within amunicipality that does not do all of its businesswithin the corporate limits of such town or city.. . .

The tax was imposed for the privilege ofmaintaining and conducting a place of businesswithin that municipality and it was intendedthat the business should be considered as awhole. The gross income or volume of suchbusiness is merely made the basis on which the

tax is graduated.

The gross income of Kigre in this case is derivedfrom its business conducted within the Town and istherefore properly included in the business license feecalculation. This appears especially true since Kigreofficer admitted that Kigre pays no other BusinessLicense Fee in any other jurisdiction. Thus, accordingto Kigres own evidence, there is nothing to apportion.

7. Kigre next asserts that the Town does not

apportion the income between the sale of goods ininterstate commerce from the manufacturing of such


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goods. Kigre has given the Court no law or fact inevidence that would support the argument that theTowns Business License Ordinance Fee is notenforceable for want of an apportionment betweenincome derived from the sale of goods as opposed to themanufacturing of such goods. The business license feeis based on the gross income of the business [See:Section 10-10-120(3) of the Towns Municipal Code].Kigre has provided no authority for the propositionthat the Town is obligated to make a distinction in themanner that Kigre suggests.

8. Kigre next argues that the Towns Ordinance isinvalid because it uses the outdated StandardIndustrial Codes to classify businesses. Addressing asimilar constitutional attack on a business license feeand the classifications used, the South Carolina Courtof Appeals in City of Beaufort v. Holcombe,369 S.C.643, 632 S.E.2d 894 (SC App. 2006), determined thatclassifications in the citys license fee ordinance had arational and reasonable basis and stated:

Courts generally analyze equal protection

challenges under one of three standards:(1) rational basis; (2) intermediate scrutiny; or,(3) strict scrutiny. If the classification does notimplicate a suspect class or abridge afundamental right, the rational basis test isused. Inherently suspect classifications includethose based on factors such as race, religion, oralienage.

In this instance, we agree with the circuitcourts determination that landlords do not

constitute a suspect class, [so] the rationalbasis test is used. To satisfy the equal


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protection clause, a classification must (1) beara reasonable relation to the legislative purposesought to be achieved, (2) members of the classmust be treated alike under similarcircumstances, and (3) the classification mustrest on some rational basis.

Equal Protection Clauses are subject to awide scope of discretion and legislativeenactments are to be avoided only when they arewithout any reasonable basis. Only irrationaland unjustified classifications are barred.

If a classification is reasonably related to a properlegislative purpose and the members of each class aretreated equally, any challenge under the EqualProtection clause fails. Eli Witt Company v. City ofWest Columbia, 309 S.C. 555, 425 S.E.2d 16 (1992),citingRobinson v. Richland County Council, 293 S.C.27, 358 S.E.2d 392 (1987). An ordinance will only befound to violate the Equal Protection clause if it isarbitrary and there is no conceivable hypothesis tosupport the classification.Medlock v. S.C. State Family

Farm Dev. Auth.,279 S.C. 316, 306 S.E.2d 605 (1983).

The Towns classification system utilizes theStandard Industrial Classification (SIC) Manual 1987,a classification system with a rational and reasonablebasis. All businesses in the same classification aretreated the same. A review of the Table in Section 10-1-190 of the Towns Municipal Code shows categories ofbusiness types falling within a given rate class, andshows the reasonableness of the classifications. Anyreasonable basis for the different classification will

satisfy the requirements of the equal protection clause.SeeMedlock, supra.


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The license fee system is also reasonably related toa proper legislative purpose as stated in Section 10-1-30 of the Towns Municipal Code:

The business license levied by this chapter is forthe purpose of providing such regulation as maybe required by the businesses subject theretoand for the purpose of raising revenue for thegeneral fund through a privilege fee. Eachlicense shall be issued for one (1) calendar yearand shall expire on December 31st. Theprovisions of this chapter and the rates hereinshall remain in effect from year to year untilamended by council.

The Court of Appeals in City of Beaufort, supra,further stated:

A municipal ordinanc

Documents

Petition for Writ of Certiorari to the Supreme Court of South Carolina