UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

COLLINS HOLDING CORPORATION,
Plaintiff-Appellant,

v.
                                                                         No. 98-2366
JASPER COUNTY, a political
subdivision of South Carolina,
Defendant-Appellee.

Appeal from the United States District Court
for the District of South Carolina, at Charleston.
Dennis W. Shedd, District Judge;
Julian Abele Cook, Jr., Senior District Judge, sitting by designation.
(CA-94-2719-9-19)

Argued: April 7, 1999

Decided: June 7, 1999

Before NIEMEYER, MICHAEL, and MOTZ, Circuit Judges.

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Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: George Marion Earle, HUNTER, MACLEAN, EXLEY
& DUNN, P.C., Savannah, Georgia, for Appellant. David Scott
Mathews, JASPER COUNTY ATTORNEY'S OFFICE, Ridgeland,
South Carolina, for Appellee.

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Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

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OPINION

PER CURIAM:

The district court held on remand that the assessment imposed by
the Jasper County, South Carolina, Business License Ordinance was
a tax, not a fee. The court therefore concluded that the Tax Injunction
Act, 28 U.S.C. § 1341 (1994), barred it from entertaining Collins
Holding Corporation's action to challenge the ordinance. We affirm.

I.

In 1993 Jasper County, South Carolina, enacted a Business License
Ordinance. The ordinance requires most businesses in unincorporated
areas of the county to obtain a business license each year. The cost
of the license is based on a percentage of the business's gross income
for the past year. Businesses are classified and assessment rates vary
among the classifications.

Collins leases video poker machines to retail establishments in
South Carolina. Collins contends that the rate applied by the Jasper
County ordinance to "Video Poker Arcades, Distributors and Lessors"
is excessive and illegal. In 1994 Collins sued the county in federal
court, alleging that the ordinance (or assessment) violated the Equal
Protection Clause of the United States Constitution and South Caro-
lina law. The district court ruled for Collins, concluding the ordinance
imposed a license fee on Collins's business in excess of that allowed
by South Carolina law. Jasper County appealed.

In the first appeal we concluded that it was necessary to decide
whether the Tax Injunction Act bars Collins's action. The Act pro-
vides that "district courts shall not enjoin, suspend or restrain the
assessment, levy or collection of any tax under State law where a
plain, speedy and efficient remedy may be had in the courts of such
State." 28 U.S.C. § 1341. We did not decide the Tax Injunction Act

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issue. Instead, we remanded for the district court to develop a record
and to decide that issue in the first instance. See Collins Holding
Corp. v. Jasper County, South Carolina, 123 F.3d 797 (4th Cir.
1997). The district court concluded on remand that the business
license assessment was a tax and dismissed the case for lack of juris-
diction. This time, Collins appeals.

II.

On remand Collins did not dispute that South Carolina provided a
"plain, speedy and efficient remedy." It only argued that the Jasper
County assessment was a "fee," not a "tax," and was therefore not
subject to the Tax Injunction Act.

In our first opinion we observed that the case law"make[s] a gen-
eral distinction between broader-based taxes that sustain the essential
flow of revenue to state (or local) government and fees that are con-
nected to some regulatory scheme." 123 F.3d at 800. We noted, how-
ever, that "the line between `tax' and `fee' can be a blurry one." Id.
We therefore offered the district court some guidance:

           It is useful to begin with a look at who imposes, adminis-
          ters, and collects the assessment. An assessment imposed
          directly by a legislature is more likely to be a tax than one
          imposed by an administrative agency. If responsibility for
          administering and collecting the assessment lies with the
          general tax assessor, it is more likely to be a tax; if this
          responsibility lies with a regulatory agency, it is more likely
          to be a fee. But the heart of the inquiry centers on function,
          requiring an analysis of the purpose and ultimate use of the
          assessment. If the revenue is paid into the state's (or coun-
          ty's) general fund and provides a general benefit to the pub-
          lic, it sounds like a tax. If, on the other hand, the assessment
          covers only a narrow class of persons and is paid into a spe-
          cial fund to benefit regulated entities or defray the cost of
          regulation, it sounds like a fee.

Id. (citations omitted).

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On remand the district court applied these guidelines in analyzing
the nature of the Jasper County business license assessment. The
court concluded that the following factors indicated that the assess-
ment is a tax: (1) the ordinance that levied the assessment was enacted
by the county legislative body, the County Council, (2) a stated pur-
pose of the assessment is to raise revenue for the county's general
fund, (3) most of the assessments collected have been spent for the
general benefit of the county (specifically, for the development of an
industrial and business park),* and (4) the assessment is not levied in
connection with a regulatory scheme; instead, it is essentially a tax on
gross income.

The district court acknowledged that the following factors indicate
that the assessment is a fee: (1) the assessment is collected by a busi-
ness license coordinator, not the county treasurer, and (2) the assess-
ments are deposited in a segregated escrow account. This second
factor is negated by the fact that revenue projections for business
license assessments are included in the county's general fund budget
and that assessment revenues may be used for general purposes.

The district court concluded that on balance "the assessment by
Jasper County is more in the nature of a tax than a fee." As a result,
the district court dismissed the action (without prejudice) for lack of
subject matter jurisdiction because of the Tax Injunction Act.

We believe that the district court weighed all of the factors prop-
erly, and we agree with its conclusion that the Jasper County business
license assessment is a tax and not a fee. We therefore affirm on the
reasoning of the district court. See Collins Holding Corporation v.
Jasper County, South Carolina, No. 9:94-2719-19 (D. S.C. Aug. 11,
1998).

AFFIRMED
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*A portion of the collections were used to buy a vehicle for the coun-
ty's business license coordinator. However, the coordinator's salary and
expenses (except for the purchase price of the vehicle) are paid from the
general fund.

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