The City of Aiken’s business license tax dispute involving an Aiken business that is co-owned by an Aiken City Council member is now entering its fourth year. The core issue is the constitutionality of a municipality taxing property outside of its jurisdiction. The case is scheduled to be heard by the State of South Carolina’s Administrative Law Court on January 21, 2025.  Since the case involves a complex, uniform business license tax Ordinance, the administrative court judge’s ruling could affect municipalities across the state.

As of October 31, 2024, the City’s legal fees for the case have exceeded $80,000.

(An Update to Ed Woltz’s Business License Citation and A Hearing on Business License Taxes). 

by Don Moniak

December 30, 2024

The case of City of Aiken vs Edward Woltz began in November 2021, when Aiken resident and businessman Ed Woltz was quietly cited by the City with a business license violation for failure to pay business license taxes on some of his rental properties that are situated both inside and outside of the City of Aiken, and for not possessing a business license for those properties. Mr. Woltz is an Aiken City Councilman who had been reelected to a second term just a few weeks prior to the citation.  His current term ends this year.

In early September 2022, an agreement was reached to dismiss the criminal case in return for Mr. Woltz paying the back taxes. A tax reassessment for 2018 through 2022 was sent to Mr. Woltz and payment of $11,477 was made, but under protest.

The Aiken law firm of McCants and Nance was then hired to represent Mr. Woltz, his wife and business partner Holly Woltz, and their rental company S&C properties in an appeal of the assessment. At that point, the case became Edward Woltz, Holley Woltz and S&C Properties vs City of Aiken. Subsequently, the Columbia law firm of Robinson, Gray, Stepp, & Laffitte, LLC was hired to represent the City.

A hearing on the case was delayed until June 8, 2023, when a day of testimony was conducted in Aiken City Council chambers. Two weeks later, Aiken City Council’s designated hearing officer Kelly Ziers issued a ruling in favor of the city.

The Zier ruling stipulated that the Woltzes and S&C Properties owed $13,086 for four years of back taxes and penalties for ten properties within Aiken city limits, and an undisclosed amount for the more than dozen properties located outside of the city that are not subject to a business license tax by any other government body. Zier also ruled that because the Woltzes operated their rental business from within the City, the City was within its rights to collect taxes on all properties, both inside and outside of the city limits.

After the adverse ruling, the Woltzes then filed an appeal on August 23, 2023 to the State of South Carolina’s Administrative Law Court.

The appeal reiterated two of the arguments advanced during the city’s hearing; that property owners with only one residential rental unit are not required to obtain a business license, and that many of the Woltz’ rental properties are located outside of the City of Aiken—thus “taxing real properties which are not located within its jurisdiction or its lawful right to do so.”

In response, the City filed a Motion to Dismiss, contending that the Administrative Law Division lacks jurisdiction because the Woltzes were challenging the constitutionality of portions of the business license tax Ordinance.

The Motion to Dismiss was denied in December 2023, with Chief Administrative Law Judge Ralph King Anderson III writing, in part, that 

“This court has subject matter jurisdiction in this court…Petitioners do not argue the Ordinance is unconstitutional in all of its applications; rather, they argue it is unconstitutional as applied to their particular circumstances as owners of more than one rental property in, and outside of, the City of Aiken.” 

In other words, the administrative court ruled that it can hear challenges on the parts of the Ordinance applicable to the Woltzes case, though not the entire Ordinance since most of it does not directly pertain to the case.

Since the denial of the Motion to Dismiss, the contested case hearing date has been pushed back three times, the most recent due to Hurricane Helene. It is presently scheduled for January 21-22, 2025. 

According to invoices obtained via a Freedom of Information Act request, the City of Aiken has paid more than $80,000 in legal fees to the Columbia law firm of Robinson, Gray, Stepp, & Laffitte, LLC.  between September 1, 2022 and October 1, 2024

Nearly one quarter of the fees, $15,760.20, was charged during the month of June 2023 (Figure 1), when the first hearing was held. A nearly equal amount was spent preparing and defending the City’s Motion to Dismiss at the end of 2023. At this rate, the case will likely cost the city more than $100,000 for a case involving just a fraction of that amount in disputed rental properties back taxes.

Footnote:

* Robinson, Gray, Stepp, and Latiffe monthly invoice amounts and hours billed for the Woltz business license appeal, for period of September 1, 2022 through October 1, 2024. Data obtained via a Freedom of Information Act request.

Month	Fees	Hours billed
September 2022	$1,1,25	4.8
October 2022	$1,860	8.1
November 2022	$2,197	7.8
December 2022	$522	1.9
January 2023	$3,105	13.1
February 2023	$1,650	6.4
March 2023	$3,207	13.8
April 2023	$4,339	19.5
May 2023	$2,910	11.8
June 2023	$15,760	64.5
July 2023	$1,376	5.2
August 2023	$6,435	25.9
September 2023	$1,027	4.1
October 2023	$450	1.9
November 2023	$5,431	22.9
December 2023	$11,274	44.0
January 2024	$1,230	4.6
February 2024	$4,762	20.6
March 2024	$6,183	27.0
April 2024	$4,762	12.6
May 2024	$225	1.0
June 2024	0	0
July 2024	0	0
August 2024	$5,896	24.2
September 2024	$1,230	4.6
October 2024	0	0
Totals	$80,311	350

References.

September 2022 appeal (Pages 6-10) to Aiken City Council.

June 2023 ruling by City Council’s hearing designee Kelly Zier.

August 2023 appeal to the South Carolina Administrative Court Division.

December 2023 Order denying City’s Motion to Dismiss the appeal.

Entire response to FOIA request.