UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

COLLINS HOLDING CORPORATION,

Plaintiff-Appellant,

v.

No. 98-2366

JASPER COUNTY, a political

subdivision of South Carolina,

Defendant-Appellee.

Appeal from the United States District Court

for the District of South Carolina, at Charleston.

Dennis W. Shedd, District Judge;

Julian Abele Cook, Jr., Senior District Judge, sitting by designation.

(CA-94-2719-9-19)

Argued: April 7, 1999

Decided: June 7, 1999

Before NIEMEYER, MICHAEL, and MOTZ, Circuit Judges.

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Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: George Marion Earle, HUNTER, MACLEAN, EXLEY

& DUNN, P.C., Savannah, Georgia, for Appellant. David Scott

Mathews, JASPER COUNTY ATTORNEY'S OFFICE, Ridgeland,

South Carolina, for Appellee.

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Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

The district court held on remand that the assessment imposed by

the Jasper County, South Carolina, Business License Ordinance was

a tax, not a fee. The court therefore concluded that the Tax Injunction

Act, 28 U.S.C. § 1341 (1994), barred it from entertaining Collins

Holding Corporation's action to challenge the ordinance. We affirm.

I.

In 1993 Jasper County, South Carolina, enacted a Business License

Ordinance. The ordinance requires most businesses in unincorporated

areas of the county to obtain a business license each year. The cost

of the license is based on a percentage of the business's gross income

for the past year. Businesses are classified and assessment rates vary

among the classifications.

Collins leases video poker machines to retail establishments in

South Carolina. Collins contends that the rate applied by the Jasper

County ordinance to "Video Poker Arcades, Distributors and Lessors"

is excessive and illegal. In 1994 Collins sued the county in federal

court, alleging that the ordinance (or assessment) violated the Equal

Protection Clause of the United States Constitution and South Carolina law. The district court ruled for Collins, concluding the ordinance

imposed a license fee on Collins's business in excess of that allowed

by South Carolina law. Jasper County appealed.

In the first appeal we concluded that it was necessary to decide

whether the Tax Injunction Act bars Collins's action. The Act provides that "district courts shall not enjoin, suspend or restrain the

assessment, levy or collection of any tax under State law where a

plain, speedy and efficient remedy may be had in the courts of such

State." 28 U.S.C. § 1341. We did not decide the Tax Injunction Act

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issue. Instead, we remanded for the district court to develop a record

and to decide that issue in the first instance. See Collins Holding

Corp. v. Jasper County, South Carolina, 123 F.3d 797 (4th Cir.

1997). The district court concluded on remand that the business

license assessment was a tax and dismissed the case for lack of jurisdiction. This time, Collins appeals.

II.

On remand Collins did not dispute that South Carolina provided a

"plain, speedy and efficient remedy." It only argued that the Jasper

County assessment was a "fee," not a "tax," and was therefore not

subject to the Tax Injunction Act.

In our first opinion we observed that the case law"make[s] a general distinction between broader-based taxes that sustain the essential

flow of revenue to state (or local) government and fees that are connected to some regulatory scheme." 123 F.3d at 800. We noted, however, that "the line between `tax' and `fee' can be a blurry one." Id.

We therefore offered the district court some guidance:

 It is useful to begin with a look at who imposes, administers, and collects the assessment. An assessment imposed

directly by a legislature is more likely to be a tax than one

imposed by an administrative agency. If responsibility for

administering and collecting the assessment lies with the

general tax assessor, it is more likely to be a tax; if this

responsibility lies with a regulatory agency, it is more likely

to be a fee. But the heart of the inquiry centers on function,

requiring an analysis of the purpose and ultimate use of the

assessment. If the revenue is paid into the state's (or county's) general fund and provides a general benefit to the public, it sounds like a tax. If, on the other hand, the assessment

covers only a narrow class of persons and is paid into a special fund to benefit regulated entities or defray the cost of

regulation, it sounds like a fee.

Id. (citations omitted).

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On remand the district court applied these guidelines in analyzing

the nature of the Jasper County business license assessment. The

court concluded that the following factors indicated that the assessment is a tax: (1) the ordinance that levied the assessment was enacted

by the county legislative body, the County Council, (2) a stated purpose of the assessment is to raise revenue for the county's general

fund, (3) most of the assessments collected have been spent for the

general benefit of the county (specifically, for the development of an

industrial and business park),* and (4) the assessment is not levied in

connection with a regulatory scheme; instead, it is essentially a tax on

gross income.

The district court acknowledged that the following factors indicate

that the assessment is a fee: (1) the assessment is collected by a business license coordinator, not the county treasurer, and (2) the assessments are deposited in a segregated escrow account. This second

factor is negated by the fact that revenue projections for business

license assessments are included in the county's general fund budget

and that assessment revenues may be used for general purposes.

The district court concluded that on balance "the assessment by

Jasper County is more in the nature of a tax than a fee." As a result,

the district court dismissed the action (without prejudice) for lack of

subject matter jurisdiction because of the Tax Injunction Act.

We believe that the district court weighed all of the factors properly, and we agree with its conclusion that the Jasper County business

license assessment is a tax and not a fee. We therefore affirm on the

reasoning of the district court. See Collins Holding Corporation v.

Jasper County, South Carolina, No. 9:94-2719-19 (D. S.C. Aug. 11,

1998).

AFFIRMED

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*A portion of the collections were used to buy a vehicle for the county's business license coordinator. However, the coordinator's salary and

expenses (except for the purchase price of the vehicle) are paid from the

general fund.

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