SCANA Corp. v. South Carolina Department of Revenue

683 S.E.2d 468, 384 S.C. 388, 2009 S.C. LEXIS 461

• Court: Supreme Court of South Carolina
• Decided: September 21, 2009
• Docket: 26511
• Status: Published

Opinions

Chief Justice TOAL.

In this appeal, we review the circuit court’s order, which found that an investment tax credit earned by SCANA Corporation and Subsidiaries (SCANA) in 1996, could be carried forward and applied to SCANA’s tax liability for the 1997 and 1998 tax years. The South Carolina Department of Revenue (the Department) appealed.

We reversed the decision of the circuit court in SCANA Corporation and Subsidiaries v. South Carolina Department of Revenue, Op. No. 26511, 2008 WL 2572595 (S.C. Sup.Ct. filed June 30, 2008) (Shearouse Adv. Sh. No. 27 at 34). Subsequently, we granted SCANA’s petition for rehearing and withdrew our former opinion. We now substitute this opinion affirming the ruling of the circuit court.¹

FACTS AND PROCEDURAL HISTORY

The facts relevant to this appeal are uncontested by the parties. SCANA earned the investment tax credit at issue pursuant to the Economic Impact Zone Community Development Act of 1995 (The Act). 1995 S.C. Acts 138. The Act is codified as S.C.Code Ann. § 12-14-60. In pertinent part, S.C.Code Ann. § 12-14-60 states:

(A)(1) There is allowed an economic impact zone investment tax credit against the tax imposed pursuant to Chapter 6 of this title for any taxable year in which the taxpayer places in service economic impact zone qualified manufacturing and productive equipment.

S.C.Code Ann. § 12-14-60(A)(1).

In 1996, SCANA placed in service certain qualifying equipment that earned it an Economic Impact Zone tax credit (EIZ credit) in the amount of $29,575,619. This EIZ credit far exceeded SCANA’s tax liability for the 1996 tax year leaving $15,323,257 of the EIZ credit unused.

Originally, there was no provision in the Act which provided that the EIZ credit could be carried forward to subsequent tax years. Nonetheless, in 1997, the General Assembly enacted a carry-forward provision applicable to EIZ credits. 1997 S.C. Acts 151 § 8. This provision, which is codified at S.C.Code Ann. § 12-14-60(D), states that “[ujnused [EIZ] credit ... may be carried forward for ten years from the close of the tax year in which the credit was earned.” The General Assembly provided that the carry-forward provision “is effective for tax years beginning after 1996.” 1997 S.C. Acts 151 § 14.

SCANA applied the unused EIZ credit earned in 1996 to its 1997 and 1998 tax liability pursuant to S.C.Code Ann. § 12-14-60(D). However, the Department denied SCANA’s carry-forward application of its EIZ credit because it was not earned in a tax year after 1996.

SCANA appealed to the Administrative Law Court (ALC). The ALC agreed with the Department’s interpretation of S.C.Code Ann. § 12-14-60(D) and found that the carry-forward credit was properly denied because the EIZ credit was not earned in a tax year beginning after 1996. SCANA appealed to the circuit court, which reversed and held that the EIZ credit earned but not used by SCANA in 1996 may be applied to its tax liability for 1997 and 1998.

ISSUE

May EIZ credit earned but not applied in 1996 be carried forward to offset tax liability in 1997 and 1998 pursuant to S.C.Code Ann. § 12-14-60(D)?

DISCUSSION

Appellant argues that S.C.Code Ann. § 12-14-60 is ambiguous and the circuit court erred in construing the statute to allow SCANA to carry-forward the EIZ credit it earned, but was unable to use, in 1996. We disagree.

We find that the language of S.C.Code Ann. § 12-14-60(D) and its corresponding effective date are unambiguous. “[W]here a statute’s language is plain and unambiguous, and conveys a clear and definite meaning ... the court has no right to impose another meaning.” Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000). Thus, the only proposition that is needed to resolve the instant case is this: in the 1997 and 1998 tax years, S.C.Code Ann. § 12-14-60(D) allowed unused EIZ credit to be carried forward beyond the close of the tax year in which the credit was earned.

As enacted in 1997, S.C.Code Ann. § 12-14-60(D) provided:

Unused credit allowed pursuant to this section may - be carried forward for ten years from the close of the tax year in which the credit was earned.

S.C.Code Ann. § 12-14-60(D). This provision was “effective for tax years beginning after 1996.” 1997 S.C. Acts 151 § 14.

SCANA earned the EIZ credit at issue in 1996 but was not able to take full advantage of it in the 1996 tax year. When SCANA prepared its tax information for the 1997 and 1998 tax years, the statutory law in effect provided that unused EIZ credit could be carried forward “ten years from the close of the tax year in which the credit was earned.” S.C.Code Ann. § 12-14-60(D). That SCANA was justified in claiming the unused portion of its previously earned credit seems to follow rather directly from a straightforward application of the statute and its effective date. Thus, we discern no reasonable ambiguity here and hold that the straight-forward application of the statutory law at issue provides that SCANA may carry forward the EIZ credit it earned in 1996 to offset its tax liability for 1997 and 1998.

CONCLUSION

For the foregoing reasons, we affirm the circuit court’s decision.

WALLER, PLEICONES and KITTREDGE, JJ., concur. BEATTY, J., dissenting in a separate opinion.

1 . We note that, due to the retirement of Justice James E. Moore and the untimely passing of Acting Justice James W. Johnson, Jr., the panel on rehearing consists of two members who were not part of the original panel.