SC REVENUE RULING #89-12
SUBJECT: Special Registration Program for Nonresident Retailers
EFFECTIVE DATES: June 8, 1989 through July 31, 1989
SUPERSEDES: All previous documents and any oral directives
in conflict herewith.
REFERENCE: S.C. Code Ann. Section 12-35-95 (Supp. 1988)
Section 80 of Part II - 1989-90 Appropriations Bill
AUTHORITY: S.C. Code Ann. Section 12-3-170 (1976)
SC Revenue Procedure #89-3
SCOPE: A Revenue Ruling is the Commission's official
interpretation of how tax law is to be applied
to a specific set of facts. A Revenue Ruling is
public information and remains a permanent docu-
ment until superseded by a Regulation or is re-
scinded by a subsequent Revenue Ruling.
Question:
Does Section 80 of Part II of the 1989-90 Appropriations Bill apply to
sales tax or use tax?
Facts:
The 1989-90 Appropriations Bill, Section 80 of Part II, provides a special
registration program for nonresident retailers. That section reads:
For an unregistered nonresident retailer as defined in
Section 12-35-95 of the 1976 Code who first applies
before August 1, 1989, to the South Carolina Tax
Commission for the purpose of registering to collect
and pay the South Carolina sales tax, the liability for
collecting and paying the tax begins on the date the
nonresident retailer files the application.
Code Section 12-35-95, which defines "nonresident retailers", reads:
"Retailer", as defined in Section 12-35-90, includes a
"nonresident retailer" as defined in this section. A
nonresident retailer means and includes every person
who does not maintain an office or location in this
State but who solicits business either by direct
representatives, indirect representatives, or manu-
facturers' agents, or by distribution of catalogs or
other advertising matter or by any other means
whatsoever and by reason thereof receives orders for
tangible personal property from consumers for use,
consumption, distribution, and storage for use or
consumption in this State. This nonresident retailer
shall collect the tax imposed by this chapter from the
purchaser, and no action either in law or in equity on
a sale or transaction as provided by the terms of this
chapter may be had in this State by a nonresident
retailer unless it is affirmatively shown that the
provisions of this chapter have been fully complied
with.
A nonresident retailer also shall obtain a retail
license required by this chapter and, in obtaining this
license, he is considered to have one branch or
location in this State.
The provisions of Section 80 of Part II of the Appropriations Bill only
makes reference to sales tax; however, a nonresident retailer is a
retailer without a retail location in South Carolina. In other words, a
nonresident retailer is an out-of-state seller who is required to collect
and remit the South Carolina use tax.
Discussion:
The question at hand is: Do the special registration provisions
established in the Appropriations Bill apply to sales tax or use tax?
The statute creates an interesting dilemma since a nonresident retailer
collects and remits the use tax, but the statute makes reference to the
sales tax. Such an ambiguity appears to make the statute a nullity.
However, the following quotes from 73 Am. Jur. 2d, Statutes, provide some
guidance.
Section 145
...a construction adopted should not be such as to
nullify, destroy, or defeat the intention of the legis-
lature.
Section 249
In the construction of statutes, the courts start with
the assumption that the legislature intended to enact an
effective law, and the legislature is not to be presumed
to have done a vain thing in the enactment of a statute.
Hence, it is a general principle that the courts should,
if reasonably possible to do so interpret the statute, or
the provision being construed, so as to give it efficient
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operation and effect as a whole. An interpretation
should, if possible, be avoided, under which the statute
or provision being construed is defeated, or as otherwise
expressed, nullified, destroyed, emasculated, repealed,
explained away, or rendered insignificant, meaningless,
inoperative, or nugatory.
Section 254
In the absence of a showing to the contrary, all laws are
presumed to be consistent with each other. Where it is
possible to do so, it is the duty of the courts, in the
construction of statutes, to harmonize and reconcile
laws, and to adopt that construction of a statutory
provision which harmonizes and reconciles it with other
statutory provisions. These rules are particularly
applicable to statutes passed at or about the same time,
or at the same session of the legislature, since it is
not to be presumed that the same body of men would pass
conflicting and incongruous acts.
Likewise the various provisions of a single act should be
so read that all may, if possible, have effect without
repugnancy or inconsistency, so as to render the statute
a consistent and harmonious whole.
Although the courts cannot add to, take from, or change,
the language of a statute to give effect to any supposed
intention of the legislature, words and phrases may be
altered and supplied when that is necessary to obviate
repugnancy and inconsistency and to give effect to the
manifest intention of the legislature.
In summary, the statute in question should not be interpreted so as to
make it ineffectual. The statute is entitled to a reasonable construc-
tion, harmonious with the intent of the legislature and consistent with
other statutory provisions.
Furthermore, since the statute forgives, upon proper application, an
indebtedness to the State for taxes which the applicant was required to
collect and remit, it may be viewed as one which should be strictly con-
strued. However, there are limitations upon the strictness of construc-
tion. The following is quoted from 73 Am. Jur. 2d, Statutes, Section 275:
Although a strict construction is a narrow construction
and the statute may not be extended by implication or
inference, the construction should not be unduly techni-
cal, arbitrary, severe, artificial, or narrow. The
words used need not be given any meaning other than
their full meaning, where such construction is in
harmony with the context. A strict construction permits
the words to be read naturally. A statute which is sub-
ject to the rule of strict construction is nevertheless
entitled to a reasonable, sensible, and fair construc-
tion. The courts should take a common sense view of the
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statute as a whole and should not render a statute
nugatory, inoperative, or ineffectual, but should
interpret it as to give it an efficient operation
(emphasis added).
In summary, "the rule of strict construction [of a statute] is
nevertheless entitled to a reasonable, sensible, and fair construction."
Conclusion:
Section 80 of Part II of the 1989-90 Appropriations Bill, the Special
Registration Program for Nonresident Retailers, applies to use tax;
otherwise, the statute will be rendered ineffectual and inconsistent with
the provisions of Code Section 12-35-95.
SOUTH CAROLINA TAX COMMISSION
S. Hunter Howard, Jr., Chairman
A. Crawford Clarkson, Jr., Commissioner
T. R. McConnell, Commissioner
Columbia, South Carolina
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NOTE: SEE INFORMATION LETTER #89-
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