Lee v. City of Columbia

Per Curiam: This appeal is from an order dismissing appellant’s complaint. We affirm. Appellant is a resident insurance broker in the City of Columbia. He commenced this action challenging the constitutionality of a municipal ordinance requiring brokers to collect a 2% tax from gross premiums paid to insurance carriers not licensed by the State of South Carolina. The ordinance as originally enacted required that the broker remit the tax to respondent Municipal Association which received a 25% fee from the City for collecting the tax. The ordinance has been amended to delete this reference to the Municipal Association.1 Appellant claimed the ordinance violated equal protection and due process and was an unlawful delegation of power to the Municipal Association. He sought an injunction against its enforcement. The trial judge granted respondents’ motion to dismiss on the ground that appellant had not paid the tax under protest and brought suit for a refund as required by S. C. Code Ann. §§ 12-47-210 through -230 (1976). The challenged ordinance as amended imposes a “license tax upon agents or brokers for non-admitted insurers.” A challenge to a business license tax imposed by a municipality is subject to the statutes requiring payment under protest. Western Union Telegraph Co. v. Winnsboro, 71 S. C. 231, 50 S. E. 870 (1905). The trial judge correctly ruled that appellant can maintain this challenge to the ordinance only by paying the tax under protest and suing for its refund. Accordingly, the order of the Circuit Court is Affirmed. Footnotes [1] S. C. Code Ann. § 5-7-300 became effective March 31, 1987, and authorizes a municipality to contract with an individual, firm, or organization to assist the municipality in collecting property or business license taxes.