H 3761 General Bill, By Kirsh
 A BILL TO AMEND SECTION 12-36-90, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO GROSS PROCEEDS FOR PURPOSES OF THE SALES AND USE TAX, SO AS TO
 EXCLUDE AS GROSS PROCEEDS THE FAIR MARKET VALUE OF TANGIBLE PERSONAL PROPERTY
 USED OR CONSUMED FROM BUSINESS OR STOCK IF THE PROPERTY IS REPLACING A
 DEFECTIVE PART IN CONNECTION WITH A WARRANTY OR SERVICE CONTRACT AND THE TAX
 WAS PAID EARLIER ON THE SALE OR RENEWAL OF THE CONTRACT OR THE TAX WAS PAID ON
 THE SALE OF THE DEFECTIVE PART OR THE PROPERTY IT WAS PART OF; TO AMEND
 SECTION 12-36-910, AS AMENDED, RELATING TO THE IMPOSITION OF THE SALES TAX ON
 TANGIBLE PERSONAL PROPERTY, SO AS TO INCLUDE THE GROSS PROCEEDS ACCRUING FROM
 THE SALE OR RENEWAL OF A WARRANTY OR SERVICE CONTRACT; AND SECTION 12-36-1310,
 AS AMENDED, RELATING TO IMPOSITION OF THE USE TAX, SO AS TO APPLY IT TO GROSS
 PROCEEDS ACCRUING FROM THE SALE OR RENEWAL OF A WARRANTY OR SERVICE CONTRACT.

   03/15/05  House  Introduced and read first time HJ-49
   03/15/05  House  Referred to Committee on Ways and Means HJ-50

TO AMEND SECTION 12-36-90, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO GROSS PROCEEDS FOR PURPOSES OF THE SALES AND USE TAX, SO AS TO EXCLUDE AS GROSS PROCEEDS THE FAIR MARKET VALUE OF TANGIBLE PERSONAL PROPERTY USED OR CONSUMED FROM BUSINESS OR STOCK IF THE PROPERTY IS REPLACING A DEFECTIVE PART IN CONNECTION WITH A WARRANTY OR SERVICE CONTRACT AND THE TAX WAS PAID EARLIER ON THE SALE OR RENEWAL OF THE CONTRACT OR THE TAX WAS PAID ON THE SALE OF THE DEFECTIVE PART OR THE PROPERTY IT WAS PART OF; TO AMEND SECTION 12-36-910, AS AMENDED, RELATING TO THE IMPOSITION OF THE SALES TAX ON TANGIBLE PERSONAL PROPERTY, SO AS TO INCLUDE THE GROSS PROCEEDS ACCRUING FROM THE SALE OR RENEWAL OF A WARRANTY OR SERVICE CONTRACT; AND SECTION 12-36-1310, AS AMENDED, RELATING TO IMPOSITION OF THE USE TAX, SO AS TO APPLY IT TO GROSS PROCEEDS ACCRUING FROM THE SALE OR RENEWAL OF A WARRANTY OR SERVICE CONTRACT.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Section 12-36-90(1)(c)(iii) of the 1976 Code is amended to read:

"(iii)        tangible personal property replacing defective parts under written warranty contracts if:

(A)    the warranty, maintenance, service, or similar contract is given without charge, at the time of original purchase of the defective property, or the tax was paid on the sale or renewal of warranty, maintenance, or similar service contract for tangible personal property of which the defective part was a component, whether or not such contract was purchased in conjunction with the sale of tangible personal property,

(B)    in the case of a warranty, maintenance, service, or similar contract that is given without charge at the time of original purchase of the defective property, the tax was paid on the sale of the defective part or on the sale of the property of which the defective part was a component, and

(C)    the warrantee is not charged for any labor or materials,"

SECTION    2.    Section 12-36-910(B) of the 1976 Code, as last amended by Act 69 of 2003, is further amended by adding an appropriately numbered item at the end to read:

"( )    gross proceeds accruing or proceeding from the sale or renewal of warranty, maintenance, or similar service contracts for tangible property, whether or not such contracts are purchased in conjunction with the sale of tangible personal property."

SECTION    3.    Section 12-36-1310(B) of the 1976 Code, as last amended by Act 334 of 2002, is further amended by adding an appropriately numbered item at the end to read:

"( )    gross proceeds accruing or proceeding from the sale or renewal of warranty, maintenance, or similar service contracts for tangible personal property, whether or not such contracts are purchased in conjunction with the sale of tangible personal property."

SECTION    4.    This act takes effect the first day of the fourth month after the approval of the Governor.