Editorials

Even small changes can have big impact

Lawmakers moved quickly to fix a mistake they made last session, but it's troubling the mistake was made in the first place.

In an attempt to make it easier for nonprofit groups to obtain temporary licenses to sell beer and wine at special events, lawmakers made it illegal for anyone but nonprofit groups to do so. Hospitality folks worried particularly about its impact on caterers who don't work at a licensed facility.

A joint resolution passed by the House and Senate and signed by Gov. Nikki Haley last week puts a temporary halt to the licensing restrictions to give lawmakers time to come up with a permanent solution. Lawmakers have until June 30 to fix it.

Yes, the flawed law was in place for just a month, but it leads one to wonder how many other measures are passed with serious, but unintended consequences. Even broad sweeping laws that appear to be thoroughly vetted can cause problems. We've complained since its passage that lawmakers didn't think through all the ramifications of the 2006 Property Tax Reform Act.

Given the arcane language of many bills, the general chaos that can characterize a legislative session and the number of bills considered, there ought to be some way or someone to make sure lawmakers don't do something they didn't intend to do.

A frequently cited example of a simple change run amok is the two-word deletion in 1986 that sparked the video poker boom in South Carolina.

Before the change, the state's ban against gambling did not apply to "coin-operated nonpayout machines with a free play feature" as long as the machines did not pay out "money or property " to a player.

When the words "or property" were deleted from the law, that opened the door for printed receipts to be handed to a clerk in exchange for money. As long as the machine didn't pay out cash, it was legal. That interpretation was upheld by the state Supreme Court in 1991, and video poker was off and running until it was stopped in 2000.

Last year, some service businesses, including a plant-watering service, were up in arms because the state Department of Revenue said they owed sales tax on money paid for their services. The demand for sales taxes to be paid, retroactively, stemmed from changes in the law made in 2005.

Lawmakers intended the technical changes to apply to the purchase of warranty or maintenance contracts for electronics. Some people were avoiding paying sales tax on the contracts by purchasing them after they purchased the electronics. The law was changed to tax the value of the contracts whenever they were sold.

But the agency interpreted the changes to include any service activity involving tangible personal property and insisted it was only upholding the law as written. Hence, a $40,000 tax bill for the plant-watering service.

When business owners and lawmakers cried foul, the agency said it would not enforce the provision until lawmakers had a chance to correct the law. A bill has been introduced this session to do that.

It's just one more reason for lawmakers to make sure they understand what they're doing with even the smallest changes in the law, and it's one more reason for the rest of us to watch carefully what they do.

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