County files lawsuit against FTC

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Clarendon County launched its first salvo last week against a settlement agreement between the state Department of Revenue and Farmers Telephone Cooperative that could see the county pay back more than $400,000 in what have been judged to be exempt taxes. “We have filed with the Administrative Law Court a case to contest the agreement,” said County Administrator David Epperson, who said last week that Sumter and Williamsburg counties had also joined in the effort, along with Florence school districts. “More will likely join in later. We have also invited the Clarendon school districts to be involved as well.” Epperson was first alerted to a decision handed down earlier this year last month. That decision exempts FTC from paying taxes, and also means the county and other local entities will have to pay back said taxes incurred from the business from up to six years. “The agreement has ruled the Farmer’s Telephone Cooperative and the entities established, FTC Diversified Services and FTC Communications LLC, are now tax exempt, and have been tax exempt going back to 2010,” Epperson said. “Basically, the agreement ruled that any taxes college from 2010-15 for the county and other taxing entities within unincorporated areas of the county have to repay an amount to be determined by this settlement.” The Manning Times has requested a copy of the settlement from the state Department of Revenue through the Freedom of Information Act. According to the agreement and FTC spokesman Chip Chase, neither the department, nor FTC is allowed to disclose any terms. “We are trying to work as hard as we can to do what e can to ease why will ultimately be a burden to the taxpayers,” said Epperson. “It’s ironic that a lot of residents here are customers of Farmers. They will be hit either way.” Part of that work, Epperson said last week, is contesting the entire agreement. Through the services of Parker, Poe, Adams and Bernstein of Greenville, the county is now doing so. “We believe that this settlement needs to be revisited in its entirety,” said Epperson. “Certainly, we should have the ability as the entities most affected by this settlement to have a chance to object and make our case known.” Epperson said that the most notice the county had about the decision - handed down in January - was that FTC and its subsidiaries had filed an “80 percent appeal.” “Entities and individuals who contest their tax bills or appraisals for tax purposes can file an appeal, and then they pay up to 80 percent of that bill,” said Epperson. “The other 20 percent comes due when the appeal is considered, and if they owe more, they pay more. If they owe less, they pay that difference.” Epperson said the county was notified by the state - which has the same process - that FTC had contested its total bill through the “80 percent appeal” process. “That’s not at all unusual,” Epperson said. “That happens all the time with all sorts of businesses. We had no clue any of this had happened until we got a letter at the end of June.” Epperson also said the South Carolina Association of Counties, through its attorney Tim Winslow, would also be contesting the agreement. “They provide legal assistance to all county governments in the state,” Epperson said. “He was extremely concerned with the Department of Revenue settling such a case without even considering the affected counties.” “I know that they will be pushing for legislation to avoid any such instance like this in the future,” Epperson said. Six counties in the FTC service area are affected by the decision, including Clarendon, Sumter, Lee, Williamsburg, Florence and Georgetown. “Right now, we’re looking at about $400,000 total for the county,” said Epperson. “It would definitely mean a cut in services somewhere if we were to pay that money back. Epperson said two weeks ago that the county had been presented with a proposal by FTC to pay back the funds over a series of three years. “That agreement calls for us to begin paying back immediately, but the agreement between FTC and the Department of Revenue has no set time frame for us to begin paying back, if we pay back at all,” Epperson said. He said the county collected taxes for all four years from the two companies, which were deemed exempt due to providing “rural telephone service.” “This was a law made in the 1950s to provide an incentive for these companies to come in and provide telephone service,” he said. “Now, everyone has a telephone. This is a law that, first of all, isn’t needed anymore. And, second of all, this law never even considered the possibility of Internet or wireless services.” Epperson said that the Department of Revenue was revisiting the actual agreement to find out exactly what services are exempt. Still, he said the county had no choice but to go ahead with the filing of a suit. A representative with the Administrative Law Court said that the suit would only go forward once the Department of Revenue made a definitive decision. “I expect that they will do that soon, likely before the next County Council meeting on Aug. 14,” said Epperson.