by Don Moniak
March 31, 2025
This past Friday, March 27, 2025, the South Carolina Administrative Law Court issued a ruling in favor of the City of Aiken in the business license tax dispute between Ed Woltz, Holly Woltz, and their real estate company S & C Properties LLC. (The case did not involve Ed Woltz in his capacity as an Aiken City Council member.)
Three background stories leading up to this ruling are as follows:
Ed Woltz’s Business License Citation, which reported on the legal dispute process from a criminal citation in November 2021, to an appeal to Aiken City Council in September 2022.
A Hearing on Business License Taxes, which focused on a June 2023 administrative hearing before the City of Aiken’s designated hearing officer.
Legal Fees for the Ed Woltz “Business License Dispute” Top $80,000, which chronicled the progress of the case from July 2023 to December 2024; and documented the $80,311 in legal costs incurred to date by the City of Aiken.
Nineteen months after an appeal was filed with the South Carolina Administrative Law Court (ALC) by Ed Woltz, Holly Woltz, and S & C Properties LLC (Petitioners) regarding a business license tax dispute with the City of Aiken, the ALC has finally issued a ruling in favor of the City, and ordered the Petitioners to obtain a business license for all of their real estate rental businesses and pay any back taxes (1) for the years 2017-2021.
The appeal hinged on two contentions by the Petitioners regarding the application of the business license tax Ordinance to rental properties; with the central issue being the differences between owners of a single residential rental property vs owners of multiple residential rental properties. (2)
First, they argued that the Ordinance was unconstitutionally vague and ambiguous “because it fails to define the point at which rental of residential properties constitutes doing business;” and that the breakpoint of property ownership was itself arbitrary.
Secondly, they argued that the City’s “failure to treat them similarly to owners of a single residential property amounts to an (unconstitutional) equal protection violation;” that the City’s policy of allowing one tax-free rental was inconsistent with the actual Ordinance; which draws no distinction between number of rentals.
The City’s defense was that the Ordinance provides for administrative discretion by its Business License Official in the enforcement of the Ordinance. In this case, the City maintains a policy dating to the 1980’s to not mandate a business license for owners of a single residential rental property. The policy is based on the assumption that a single rental, such as an inherited property, does not constitute a business activity.
On the issue of “vagueness,” the Court simply ruled that any reasonable person can discern that a landlord owning more than ten properties, as the Petitioners do, constitutes a business.
On the issue of unequal treatment, the Court applied a more complex “rational basis test” to determine whether the distinction between single-home landlords and multiple-home landlords was rational.
The Court decided that the City’s approach is rational, and that there was no disparate, or unequal, treatment because the Petitioners fell within a different business class than single home landlords. The Court concluded that the Petitioners did not meet the burden of proof showing disparate treatment because a “rational basis review of a government classification does not look for disparate treatment vis-a-vis other classes created by the government’s distinction; rather it examines whether there is a disparate treatment within the designated class.”
More simply put, because there was no disparate treatment within the multiple-homes landlord class, there was no overall disparate treatment and therefore no constitutional violations.
Footnotes
(1) According to court documents, the Petitioners paid $13,086.56 in back taxes and penalties in September 2022, but did so under protest. The next day, an appeal was filed, as allowed by City statute, with the Aiken City Council.
It is unclear whether additional payments are due, but since the Court did state that the Petitioners did not challenge the total tax levied by the City it appears the bill is satisfied.
(2) The appeal also included arguments regarding the levying of business license taxes on properties outside of the City’s jurisdiction. Those contentions went unaddressed in the ruling.