OPINIONS

Continued From Page 27 the “pollution control machine exemption,” both found in section 12-36-2120(17), to respondent’s purchases of items that are not “machines.” We agree.

Regulation 117-302.5(B)(1) states a “machine qualifies for the exemption under Code Section 12-36-2120(17) if the machine is integral and necessary to the manufacturing process and the product being manufactured is being manufactured ‘for sale.’” The Regulation adds a machine “includes every mechanical device or combination of mechanical powers, parts, attachments and devices to perform some function and produce a certain effect or result, is integral and necessary to the manufacturing process . . . .”

The machine exemption regulation does not define the terms “integral” and “necessary.” Those are commonly defined as “essential to completeness” and “an indispensable item.” Merriam-Webster Collegiate Dictionary 607 & 776 (10th ed. 1993).

The regulation also does not define “essential” or “indispensable,” but the common dictionary definitions for both terms provide that something is essential or indispensable if it is “of the utmost importance” or “absolutely necessary.”

Merriam-Webster Collegiate Dictionary 396 & 593 (10th ed. 1993).

Further, “processing” is not defined in the regulation. The word “process” is defined as “to subject to a special process or treatment (as in the course of manufacture). Merriam-Webster Collegiate Dictionary 929 (10th ed. 1993).

Regulation 117-302.5(B)(4)(a) provides, “Warehouse machinery used only for warehouse purposes, loading and unloading, storing, transporting raw materials and finished products” are not tax exempt. Because respondent’s forklifts feed its bin dumping conveyance system and not the first processing machine, they are not tax-exempt conveyance machines.

Regulation 117-302.5(B)(9) provides: “[a]dministrative machines, furniture, equipment, and supplies, such as office computers used for . . . recordkeeping . . . are not machines used in the process of manufacturing tangible personal property for sale and are not exempt from the tax.” Thus, respondent’s bar code scanners, black ink aerosol cans, and mobile computer stands are not tax exempt.

Because floor drain covers are a “mechanical device or combination of mechanical powers, parts, attachments and devices to perform some function” as provided in Regulation 117-302.5(B)(1), they are not tax exempt.

Regulation 117-302.5(B)(7) states that machines used for storage, including racks used to store raw materials or finished goods, are not exempt from sales tax as machines used in manufacturing tangible personal property for sale. Thus, respondent’s warehouse racks, pallet flow brakes, stacking containers, and blower fans are not tax exempt.

Regulation 117-302.5(B)(7)(b) provides that machines used for storage are taxable, including “[s]torage tanks used to store raw materials, gasses, or water.” Respondent did not present evidence its water storage tanks are used during processing. Thus, they are not tax exempt.

Regulation 117-302.5(B)(5)(a)(i) provides for a chemical to be exempt, it must be used on an exempt machine on an ongoing and continuous basis and be essential to the functioning of the exempt machine. Because there was no testimony that respondent’s chemicals were used on any exempt machines, they are not tax exempt. Regulation 117302.5(B)(5)(b) also provides chemicals used to clean floors and walls and non-exempt machines, like storage tanks, are not tax exempt. Thus, the floor treatment chemicals are not tax exempt.

Regulation 117-302.5(B)(1)(b) provides a machine is integral and necessary to the manufacturing process if it is “used on an ongoing and continuous basis during the manufacturing process.” The evidence demonstrates respondent uses its maintenance tools on an “as needed” basis. Thus, they are not tax exempt.

Finally, SCDOR also argues that respondent’s generator rentals are not used on an ongoing and continuous basis and, thus, do not qualify for the exemption. Respondent asserted the generators are used to speed up the ripening process and change the colors of the tomatoes and they are not used yearround because some crops do not need ripening. Because they are not used on an ongoing and continuous basis, they are not tax exempt.

We find SCDOR’s interpretation that each of the items at issue are not tax exempt under the machine exception to be supported by the statue and regulations it is charged with administering. Thus, the ALC erred in broadening the machine exemption beyond the statute’s plain meaning.

SCDOR also found items designated as “protective clothing” (coveralls, eyewear, gloves, aprons, and hairnets) were not exempt from the use tax under the machine exemption or a provision in section 12-36-2120(17), commonly referred to as the “pollution control machine exemption.”

Regulation 117-302(B)(10) provides:

“Protective clothing worn by an employee working in the area in which the manufacturing process occurs does not qualify as a machine and is not exempt from the tax as a machine used in manufacturing tangible personal property for sale under Section 12-36-2120(17).” Thus, because protective clothing is not considered a machine for purposes of the machine exemption, we find protective clothing is not exempt from use tax as a machine used in processing or manufacturing.

We find SCDOR’s interpretation that protective clothing is not tax exempt under the machine exemption or the pollution control machine exemption is supported by the statute and regulations it is charged with administering. Thus, the ALC erred in broadening the exemptions beyond the statute’s plain meaning.

Reversed.

McEntire Produce, Inc. v. South Carolina Department of Revenue (Lawyers Weekly No, 011-017-23, 17 pp.) (Paula Thomas, J.) Appealed from the Administrative Law Court.

David Black

MEMBER, MAYNARD NEXSEN COLUMBIA

David Black’s parents always taught him that hard work would pay off. While in law school at the University of South Carolina, he learned an important lesson about a correlate to that vital attribute: preparation.

He had enrolled in a Federal Litigation Clinic taught by Patrick Flynn and was assigned with a classmate to work on a civil suit with the Southern Poverty Law Center, which included deposing a witness who was incarcerated in the Estill Federal Correctional Institute.

After clearing prison security, they realized Flynn was nowhere to be found.

“We waited about 30 minutes before we found out that Professor Flynn would not be joining us for the deposition as he was dressed the same as the inmates,” Black says.

As leader of the business and commercial litigation practice group at the newly merged firm of Maynard Nexsen, Black frequently represents those in the energy and electric utility industry, and also regularly represents clients before the Public Service Commission.

SARAH WETMORE BUTLER PARTNER,

As the immediate past president of the South Carolina Defense Trial Attorneys’ Association, Sarah Wetmore Butler takes pride not only in the exemplary service she provides her clients, but also in the contributions she has made to the profession at large.

In an interview last fall, she described the experience as “a true honor and a testament to her character, leadership abilities and years of hard work.”

A partner at Copeland Stair Valz & Lovell, Butler received both her bachelor’s degree and law degree from Wake Forest University. She defends general contractors, subcontractors, architects and engineers, and assists insurance carriers with a variety of construction claims issues, and she has continued to expand her general liability and insurance defense background to include construction litigation.

Butler credits her clients and colleagues with inspiring her to go to work each day and professionalism is important to her.

“Everyone you come into contact with, from clients to staff to court personnel, deserves respect and kindness,” she says.

JAMES E. “WARD” BRADLEY

Ward Bradley became an attorney to help people. As a partner at Moore Bradley Myers, he does that every day through his civil litigation practice, representing both plaintiffs and defendants in a variety of lifestyles and professions. His clients also include banks and companies both large and small.

For Bradley, success comes from resilience.

“Just know things will go wrong sometimes,” he says. “When you knocked down, it’s important to get right back up and keep going.”

Bradley received his bachelor’s degree from Davidson College and his law degree from the University of South Carolina. He enjoys returning to the classroom at USC where he presents on trial techniques to both practicing attorneys and students.

Active in his community and profession, Bradley is a board member for the Salkehatchie Summer Service Project of the United Methodist Church and as a Sunday school teacher at Shandon Presbyterian Church. He has served as a member of the South Carolina Bar’s Board of Governors and Judicial Screening Committee. He is the past-president of the Richland County Bar Association.

PARTNER, MOORE BRADLEY MYERS WEST COLUMBIA M.

Dawes Cooke loves solving problems. And not the easy ones.

“Succeeding in business litigation requires solving problems on multiple levels and understanding how a particular piece of litigation fits in with the client’s overall business objectives,” he says. “This is what attracted me to the law in the first place.”

Cooke gravitated to business law for the opportunity to take on complex cases. To be an effective attorney, he believes it takes a combination of intellect, strong work ethic and character.

While character has many aspects, he adds, lawyers can’t succeed for long without it, no matter how smart they are or how hard they work.

A native of Beaufort, Cooke received his undergraduate degree from the University of Virginia and his law degree from the University of South Carolina, where he was clerk of court for the Society of Wig and Robe and symposium editor of the USC Law Review. In 1993, he received an honorary doctor of laws degree from The Citadel. Cooke also is a fellow in the American College of Trial Lawyers.

MARY AGNES “MOLLY” HOOD CRAIG

PARTNER, HOOD LAW FIRM CHARLESTON

As a partner at Hood Law Firm in Charleston, Molly Craig concentrates on civil litigation and defending catastrophic product liability, professional liability, pharmaceutical and medical device, trusts and estates litigation, and employment litigation matters across the United States.

The past president of the prestigious International Association of Defense Counsel, Craig has supported the organization’s dedication to serving and benefiting the legal profession through skills development, professionalism and camaraderie.

She is also the past president of both the Charleston Chapter of the American Board of Trial Advocates and the South Carolina Defense Trial Attorneys’ Association, and is a fellow of the International Academy of Trial Lawyers. In addition, she sits on the board of directors of , a purpose-driven NIL Collective developing Clemson student athletes to positively impact others through community charities.

Craig earned her bachelor’s degree from the University of the South and her law degree from the University of South Carolina.

She is a frequent speaker and moderator on professional panels, forums and podcasts.

Trey Suggs

With over 17 years of experience defending health care professionals, corporations and individuals in high stakes litigation, Trey Suggs has built a reputation as a passionate litigator doing what he calls his dream job.

“I have always been interested in being a balanced litigator, equipped to defend businesses and also seek justice on their behalf,” he says. “Business litigation lends itself to balance as it relates to defense and plaintiff’s work, which keep things very interesting and also helps to maintain my objectivity.”

A South Carolinian from birth and a partner at Roe Cassidy in his hometown of Greenville, Suggs graduated from Washington and Lee University and received his law degree from the USC School of Law. He defends companies in medical malpractice and professional malpractice matters and represents professionals before licensing boards, and in commercial and personal injury litigation cases.

A board member of the South Carolina Defense Trial Attorneys Association, Suggs is a past president of the South Carolina Bar Association Young Lawyers Division.

Elizabeth Van Doren Gray

When Betsy Gray began her career 46 years ago in South Carolina, her litigation practice was not as concentrated as it is today. Over time, she has embraced and thrived in the specific challenges of complex business litigation in the 21st century.

“I started practicing insurance defense, probate disputes, bringing and defending collection actions and foreclosures, and other contract-type claims,” she says. “As my firm moved towards representing more corporations, my litigation practice did too.”

As she developed a concentration in federal criminal antitrust actions, she found that she enjoyed the intricacies of those matters and consequently gravitated toward complex business litigation.

Gray received both her bachelor’s degree and law degree from the University of South Carolina. She is a founding member of Robinson Gray Stepp & Laffitte in Columbia.

Gray is a fellow of the American College of Trial Lawyers, a permanent member of the Fourth Circuit Judicial Conference, and a member of the Chief Justice’s Commission on the Profession.

Carmen Harper Thomas

As a partner in Nelson Mullins’ Columbia office, Carmen Harper Thomas handles disputes and regulatory issues in the energy, manufacturing, financial services, and technology sectors.

She has a reputation as a tenacious litigator whose experience includes resolving disputes and regulatory issues for financial services companies, energy and telecommunications utilities, professionals and their firms, and companies with innovative technology or business models.

Thomas earned her bachelor’s degree in journalism and mass communications, a master’s degree of Public Administration and her law degree from the University of South Carolina School.

She has served two terms on the USC Board of Visitors and chaired the board in 2020.

She is a leader in the American and South Carolina Bar Associations and is a Fellow of the Leadership Council on Legal Diversity and of the American Bar Foundation. She also serves as vice chair on the Board of Directors of the Boys and Girls Club of the Midlands.