Reference is to the bill as introduced.
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/ SECTION 1. Section 12-6-3535 of the 1976 Code is amended to read:
"Section 12-6-3535.
(A)(1) A taxpayer who is
allowed a federal income tax credit pursuant to Section 47 of
the Internal Revenue Code for making qualified rehabilitation
expenditures for a certified historic structure located in this
State is allowed to claim a credit against a combination
of income taxes and license fees imposed by this title. For
the purposes of this section, 'qualified rehabilitation
expenditures' and 'certified historic structure are defined as
provided in the Internal Revenue Code Section 47 and the
applicable treasury regulations. Except as provided in
subsection (A)(2), The the amount of
the credit is ten percent of the expenditures that qualify for
the federal credit. To claim the credit allowed by this
subsection, a taxpayer filing a paper return must attach a copy
of the section of the federal income tax return showing the
credit claimed, along with other information that the Department
of Revenue determines is necessary for the calculation of the
credit provided by this subsection.
(2) A
taxpayer may elect a twenty-five percent tax credit in lieu of
the ten percent tax credit, not to exceed one million dollars
for each certified historic structure.
(B) A taxpayer who
is not eligible for a federal income tax credit under Section 47
of the Internal Revenue Code and who makes rehabilitation
expenses for a certified historic residential structure located
in this State is allowed to claim a credit against the tax
imposed by this chapter. The amount of the credit is twenty-five
percent of the rehabilitation expenses. To claim the credit
allowed by this subsection, a taxpayer filing a paper return
must attach a copy of the certification obtained from the State
Historic Preservation Officer verifying that the historic
structure has been rehabilitated in accordance with this
subsection, along with all information that the Department of
Revenue determines is necessary for the calculation of the
credit provided by this subsection. A taxpayer filing an
electronic return shall keep a copy of the certification with
his tax records.
For the purposes of subsections (B) through
(F):
(1)
'Certified historic residential structure' means an
owner-occupied residence that is:
(a)
listed individually in the National Register of Historic
Places;
(b)
considered by the State Historic Preservation Officer to
contribute to the historic significance of a National Register
Historic District;
(c)
considered by the State Historic Preservation Officer to
meet the criteria for individual listing in the National
Register of Historic Places; or
(d)
an outbuilding of an otherwise eligible property
considered by the State Historic Preservation Officer to
contribute to the historic significance of the property.
(2)
'Certified rehabilitation' means repairs or alterations
consistent with the Secretary of the Interior's Standards for
Rehabilitation and certified as such by the State Historic
Preservation Officer before commencement of the work. The review
by the State Historic Preservation Officer shall include all
repairs, alterations, rehabilitation, and new construction on
the certified historic residential structure and the property on
which it is located. To qualify for the credit, the taxpayer
shall receive documentation from the State Historic Preservation
Officer verifying that the completed project was rehabilitated
in accordance with the standards for rehabilitation. The
rehabilitation expenses must, within a thirty-six-month period,
exceed fifteen thousand dollars. A taxpayer shall not take more
than one credit on the same certified historic residential
structure within ten years.
(3)
'Rehabilitation expenses' means expenses incurred by the
taxpayer in the certified rehabilitation of a certified historic
residential structure that are paid before the credit is claimed
including preservation and rehabilitation work done to the
exterior of a certified historic residential structure, repair
and stabilization of historic structural systems, restoration of
historic plaster, energy efficiency measures except insulation
in frame walls, repairs or rehabilitation of heating,
air-conditioning, or ventilating systems, repairs or
rehabilitation of electrical or plumbing systems exclusive of
new electrical appliances and electrical or plumbing fixtures,
and architectural and engineering fees.
'Rehabilitation
expenses' do not include the cost of acquiring or marketing the
property, the cost of new construction beyond the volume of the
existing certified historic residential structure, the value of
an owner's personal labor, or the cost of personal property.
(4)
'State Historic Preservation Officer' means the Director
of the Department of Archives and History or the director's
designee who administers the historic preservation programs
within the State.
(5)
'Owner-occupied residence' means a building or portion of
a building in which the taxpayer has an ownership interest, in
whole or in part, in fee, by life estate, or as the income
beneficiary of a property trust, that is, after being placed in
service, the residence of the taxpayer and is not:
(a)
actively used in a trade or business;
(b)
held for the production of income; or
(c)
held for sales or disposition in the ordinary course of
the taxpayer's trade or business.
(C)(1) The entire
credit may not be taken for the taxable year in which the
property is placed in service but must be taken in equal
installments over a five-year three-year
period beginning with the year in which the property is placed
in service. 'Placed in service' means the rehabilitation is
completed and allows for the intended use. Any unused portion of
any credit installment may be carried forward for the succeeding
five years.
(2)
The credit earned pursuant to this section by an 'S'
corporation owing corporate level income tax must be used first
at the entity level. Remaining credit passes through to each
shareholder in a percentage equal to each shareholder's
percentage of stock ownership. The credit earned pursuant to
this section by a general partnership, limited partnership,
limited liability company, or other pass-through
entity, as defined in Section 12-6-545, taxed as
a partnership must be passed through to its partners
and may be allocated among partners, including without
limitation, an allocation of the entire credit to one partner,
in a manner agreed by the partners that is consistent
with Subchapter K of the Internal Revenue Code. As used
in this item the term 'partner' means a partner, member, or
owner of an interest in the pass-through entity, as applicable.
If the taxpayer makes a pass-through election under Section
50(d) of the Internal Revenue Code, the taxpayer may elect to
pass the credit claimed pursuant to this section to the tenant
of the eligible structure or to retain the credit.
(D) Additional work
done by the taxpayer while the credit is being claimed, for a
period of up to five years, must be consistent with the
Secretary of the Interior's Standards for Rehabilitation.
During this period the State Historic Preservation Officer may
review additional work to the certified historic structure or
certified historic residential structure and has the right to
inspect certified historic structures and certified historic
residential structures. If additional work is not consistent
with the Standards for Rehabilitation, the taxpayer and
Department of Revenue must be notified in writing and any unused
portion of the credit, including carry forward, is
forfeited.
(E) The South Carolina
Department of Archives and History shall develop an application
and may promulgate regulations, including the establishment of
fees, needed to administer the certification process. The
Department of Revenue may promulgate regulations, including the
establishment of fees, to administer the tax credit.
(F) A taxpayer may
appeal a decision of the State Historic Preservation Officer to
a committee of the State Review Board appointed by the
chairperson."
SECTION 2. Section 12-67-120 of the 1976 Code, as added by Act 57 of 2013, is amended by adding an item at the end to read:
"(8) 'State-owned abandoned building' means an abandoned building and its ancillary service buildings or a project consisting of one or more abandoned buildings, the aggregate size of which is greater than fifty thousand square feet, that has been abandoned for more than five years, and, prior to the taxpayer's acquisition of such building, was most recently owned by the State, or an agency, instrumentality, or political subdivision of the State. For purposes of this definition, the taxpayer shall include any entity under common control or common ownership with the taxpayer."
SECTION 3. Section 12-67-140(A) and (B) of the 1976 Code, as added by Act 57 of 2013, is amended to read:
"(A) Subject to
the terms and conditions of this chapter, a taxpayer who
rehabilitates an abandoned building is eligible for either:
(1)
a credit against income taxes imposed pursuant to Chapter
6 and Chapter 11 of this title, corporate license fees pursuant
to Chapter 20 of this title, or taxes on
associations pursuant to Chapter 13 of this title, or
insurance premium taxes, including retaliatory taxes, imposed by
Chapter 7, Title 38, or a combination
thereof of them; or
(2)
a credit against real property taxes levied by local
taxing entities.
(B) If the taxpayer
elects to receive the credit pursuant to subsection (A)(1), the
following provisions apply:
(1)
The taxpayer shall file with the department a Notice of
Intent to Rehabilitate before incurring its first rehabilitation
expenses at the building site. Failure to provide the Notice of
Intent to Rehabilitate results in qualification of only those
rehabilitation expenses incurred after the notice is
provided.
(2)
The amount of the credit is equal to twenty-five percent
of the actual rehabilitation expenses incurred at the building
site if the actual rehabilitation expenses incurred in
rehabilitating the building site are between eighty percent and
one hundred twenty-five percent of the estimated rehabilitation
expenses set forth in the Notice of Intent to Rehabilitate. If
the actual rehabilitation expenses exceed one hundred
twenty-five percent of the estimated expenses set forth in the
Notice of Intent to Rehabilitate, the taxpayer qualifies for the
credit based on one hundred twenty-five percent of the estimated
expenses as opposed to the actual expenses it incurred in
rehabilitating the building site. If the actual rehabilitation
expenses are below eighty percent of the estimated
rehabilitation expenses, the credit is not allowed.
(3)(a)
The entire credit is earned in the taxable year in which
the applicable phase or portion of the building site is placed
in service but must be taken in equal installments over a
five-year three-year period beginning
with the tax year in which the applicable phase or portion of
the building site is placed in service. Unused credit may be
carried forward for the succeeding five years.
(b)
The entire credit earned pursuant to this subsection may
not exceed five hundred thousand dollars for any taxpayer in a
tax year for each abandoned building site. The limitation
provided in this subitem applies to each unit or parcel deemed
to be an abandoned building site.
(4)
If the taxpayer qualifies for both the credit allowed by
this section and the credit allowed pursuant to the Textiles
Communities Revitalization Act or the Retail Facilities
Revitalization Act, the taxpayer only may claim one of the three
credits. However, the taxpayer is not disqualified from claiming
any other tax credit in conjunction with the credit allowed by
this section.
(5)
The credit allowed by this subsection is limited
in use to fifty percent of either:
(a)
the taxpayer's income tax liability
for the taxable year if the taxpayer claims the credit allowed
by this section as a credit against income tax imposed pursuant
to Chapter 6 or Chapter 11 of this title, or taxes on
associations pursuant to Chapter 13 of this title, or both;
or
(b)
the taxpayer's corporate license
fees for the taxable year if the taxpayer claims the credit
allowed by this section as a credit against license fees imposed
pursuant to Chapter 20.
(6)(a) If the
taxpayer leases the building site, or part of the building site,
the taxpayer may transfer any applicable remaining credit
associated with the rehabilitation expenses incurred with
respect to that part of the site to the lessee of the site. If a
taxpayer sells the building site, or any phase or portion of the
building site, the taxpayer may transfer all or part of the
remaining credit, associated with the rehabilitation expenses
incurred with respect to that phase or portion of the site, to
the purchaser of the applicable portion of the building
site.
(b)
To the extent that the taxpayer transfers the credit, the
taxpayer shall notify the department of the transfer in the
manner the department prescribes.
(7)(6) To the
extent that the taxpayer is a partnership or a limited liability
company taxed as a partnership, the credit may be passed through
to the partners or members and may be allocated among any of its
partners or members including, without limitation, an allocation
of the entire credit to one partner or member, without regard to
any provision of the Internal Revenue Code or regulations
promulgated pursuant thereto, that may be interpreted as
contrary to the allocation, including, without limitation, the
treatment of the allocation as a disguised sale."
SECTION 4. Chapter 67, Title 12 of the 1976 Code is amended by adding:
"Section 12-67-160.
(A) Notwithstanding any other
provision of law, the taxpayer may apply to the municipality or
county in which the abandoned building is located for a
certification of the abandoned building site made by ordinance
or binding resolution of the governing body of the municipality
or county. The certification must including findings that
the:
(1)
abandoned building site was an abandoned building as
defined in Section 12-67-120(1); and
(2)
geographic area of the abandoned building site is
consistent with Section 12-67-120(2).
(B) The taxpayer may
apply to the municipality or county in which the state-owned
abandoned building is located for a certification of the
state-owned abandoned building site made by ordinance or binding
resolution of the governing body of the municipality or county.
The certification must include findings that the:
(1)
state-owned abandoned building site was a state-owned
abandoned building as defined in Section 12-67-120(8); and
(2)
geographic area of the state-owned abandoned building site
is consistent with Section 12-67-120(8).
(C) The taxpayer
conclusively may rely upon the certification in determining the
credit allowed; provided, however, that if the taxpayer is
relying upon the certification, the taxpayer shall include a
copy of the certification on the first return for which the
credit is claimed."
SECTION 5. This act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend title to conform.