Opinion ID: 1245036
Heading Depth: 1
Heading Rank: 5

Heading: service charge or tax

Text: Appellants argue that the road maintenance fee is a tax rather than a service charge. Respondents argue that the fee is a permissible service charge. The fact that the ordinance refers to the fee as a road maintenance fee rather than a tax is not determinative. The question of whether a particular charge is a tax depends on its real nature and not its designation. Powell v. Chapman , 260 S.C. 516, 197 S.E. (2d) 287 (1973); Jackson v. Breeland , 103 S.C. 184, 88 S.E. 128 (1915) (in distinguishing assessments from taxes the court held that courts will look behind mere words). In any doubtful case, however, the intent of the legislature as expressed in its characterization of the fee must be given judicial respect. Emerson College v. City of Boston , 391 Mass. 415, 462 N.E. (2d) 1098 (1984) (citing Associated Indus., Inc. v. Comm'r. of Revenue , 378 Mass. 657, 393 N.E. (2d) 812 (1979)). South Carolina has not distinguished between a service charge and a tax. Other jurisdictions have held that a tax is an enforced contribution to provide for the support of government, whereas a fee is a charge for a particular service. Long Run Baptist Ass'n. v. Louisville County Metro. Sewer Dist. , 775 S.W. (2d) 520 (Ky. App. 1989). See Craig v. City of Macon , 543 S.W. (2d) 772 (Mo. 1976) (fees or charges are rendered in connection with a specific purpose while taxes are not); Emerson College v. City of Boston, supra , (fees are charged in exchange for a particular governmental service which benefits the party paying in a manner not shared by other members of society). Although a service charge may possess points of similarity to a tax, it is inherently different and governed by different principles. A service charge is imposed on the theory that the portion of the community which is required to pay it receives some special benefit as a result of the improvement made with the proceeds of the charge. A charge does not become a tax merely because the general public obtains a benefit. See Robinson v. Richland County Council, supra; Casey v. Richland County Council , 282 S.C. 387, 320 S.E. (2d) 443 (1984). Appellants argue that the ordinance is invalid because of the disparity between the people who benefit and the people who pay. In Home Bldrs. v. Bd. of Comm'rs. , 446 So. (2d) 140 (Fla. Dist. Ct. App. 1983), a home builders and contractors association challenged an ordinance which imposed an impact fee on any new development activity which generated road traffic to pay for road construction. The court held that any improvement of roads would in some measure benefit those who do not pay and the fee is valid as long as it does not exceed the cost of the improvements and the improvements benefit the payors. Courts have also looked at the objective in imposing the fee. In Craig, supra , the Missouri Supreme Court considered whether the revenues generated by the fees were to be paid into the general fund of the government to defray customary governmental expenditures. In Emerson, supra , the Massachusetts Supreme Court held that when the revenue from fees is destined for the general fund this indicates that the fee is a tax. The Horry County ordinance provides that the fees are to go into the general fund but that they are to be specifically used for the maintenance and improvement of county roads. Therefore, because the money collected is specifically allocated for road maintenance, we hold that the fee is service charge.