H*3739 Session 108 (1989-1990)
H*3739(Rat #0329, Act #0317 of 1990) General Bill, By Sheheen, J.J. Bailey,
G.A. Brown, R.B. Brown, P.M. Burch, Elliott, J.G. Felder, J.V. Gregory, Harvin,
B.H. Harwell, B.L. Hendricks, J.H. Hodges, T.E. Huff, M.F. Jaskwhich,
J.W. Johnson, W.P. Keesley, H.H. Keyserling, J.E. Lockemy, T.T. Mappus,
J.G. McAbee, W.S. McCain, D.M. McEachin, J.T. McElveen, A.C. McGinnis,
R.N. McLellan, E.L. Nettles, J. Rama, Rhoad, T.F. Rogers, R. Smith, J.J. Snow,
E.C. Stoddard, J.W. Tucker, C.Y. Waites, J.B. Wilder and D.A. Wright
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Chapter 10
to Title 4 so as to provide for the levy of a sales and use tax in a county
area by setting forth definitions, purposes, and requirements for a
referendum, collection, uses, and distribution; to amend Section 12-35-580,
relating to a statement and prepayment of estimated sales tax liability, so as
to exclude the imposition of the local option sales and use tax from the
Section and to provide for an allocation to and reimbursement by the Tax
Commission for administrative expenses to implement the tax.-amended title
03/23/89 House Introduced and read first time HJ-1
03/23/89 House Referred to Committee on Ways and Means HJ-2
04/20/89 House Committee report: Majority favorable with amend.,
minority unfavorable Ways and Means HJ-21
04/25/89 House Special order, set for Wed. 4/26/89 after call of
uncontested cal (Under H 3968) HJ-218
04/26/89 House Amended HJ-32
04/26/89 House Read second time HJ-65
04/27/89 House Read third time and sent to Senate HJ-36
05/02/89 Senate Introduced and read first time SJ-13
05/02/89 Senate Referred to Committee on Finance SJ-13
05/03/89 Senate Committee report: Favorable Finance SJ-5
05/23/89 Senate Special order SJ-75
05/24/89 Senate Debate interrupted SJ-68
05/25/89 Senate Amended SJ-53
05/25/89 Senate Read second time SJ-106
05/25/89 Senate Ordered to third reading with notice of
amendments SJ-106
05/25/89 Senate Special order SJ-106
05/29/89 Senate Amended SJ-139
05/29/89 Senate Read third time and returned to House with
amendments SJ-151
05/30/89 House Senate amendment amended HJ-85
05/30/89 House Returned to Senate with amendments HJ-94
05/30/89 Senate Non-concurrence in House amendment SJ-33
05/30/89 House House insists upon amendment and conference
committee appointed Reps. Gentry, Boan, McCain HJ-130
05/30/89 Senate Conference committee appointed Sens. Stilwell,
Bryan, Land SJ-29
06/21/89 House Free conference powers granted HJ-13
06/21/89 House Free conference committee appointed Gentry, Boan
& McCain HJ-15
01/10/90 Senate Free conference powers granted SJ-11
01/10/90 Senate Free conference committee appointed Sens.
Stilwell, Bryan, Land SJ-13
01/10/90 House Free conference report received HJ-3
01/10/90 House Point of order -Rule 5.15-Report not printed in
House Journal HJ-14
01/11/90 House Free conference report adopted HJ-7
01/11/90 Senate Free conference report received SJ-33
01/11/90 Senate Free conference report adopted SJ-33
01/11/90 Senate Ordered enrolled for ratification SJ-45
01/30/90 Ratified R 329
02/02/90 Signed By Governor
02/02/90 Effective date 02/02/90
02/02/90 Act No. 317
02/13/90 Copies available
(A317, R329, H3739)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING
CHAPTER 10 TO TITLE 4 SO AS TO PROVIDE FOR THE LEVY OF A SALES AND USE
TAX IN A COUNTY AREA BY SETTING FORTH DEFINITIONS, PURPOSES, AND
REQUIREMENTS FOR A REFERENDUM, COLLECTION, USES, AND DISTRIBUTION; TO
AMEND SECTION 12-35-580, RELATING TO A STATEMENT AND PREPAYMENT OF
ESTIMATED SALES TAX LIABILITY, SO AS TO EXCLUDE THE IMPOSITION OF THE
LOCAL OPTION SALES AND USE TAX FROM THE SECTION AND TO PROVIDE FOR AN
ALLOCATION TO AND REIMBURSEMENT BY THE TAX COMMISSION FOR
ADMINISTRATIVE EXPENSES TO IMPLEMENT THE TAX.
Be it enacted by the General Assembly of the State of South Carolina:
Local sales and use tax
SECTION 1. Title 4 of the 1976 Code is amended by adding:
"CHAPTER 10
Local Sales and Use Tax
Section 4-10-10. For purposes of this chapter:
(1) 'County area' means a county and all municipalities within
its geographical boundaries.
(2) 'County' means the unincorporated areas of a county area or
county government as the use of the term dictates.
(3) 'Municipality' means a municipal corporation created
pursuant to Chapter 1 of Title 5 or a municipal government as the use
of the term dictates.
(4) 'Minimum distribution' means an amount equal to two million
dollars for the first distribution and after that adjusted annually on
a cumulative basis by a percentage equal to the increase in revenues
credited to the Education Improvement Act Fund for the most recently
completed fiscal year over the revenues credited to that fund in the
preceding fiscal year.
(5) 'Population' means population as determined in the most
recent official United States Census.
Section 4-10-20. A county, upon referendum approval, may
levy a sales and use tax of one percent on the gross proceeds of sales
within the county area which are subject to tax under Chapter 35 of
Title 12 and the enforcement provisions of Chapter 54 of Title 12.
The sale of items with a maximum tax levied in accordance with
Sections 12-35-516, 12-35-518, and 12-35-519 and Article 11 of Chapter
35 of Title 12 are exempt from the local sales and use tax. The
adopted rate also applies to tangible personal property subject to the
use tax in Section 12-35-810. Taxpayers required to remit taxes under
Section 12-35-810 shall identify the county or municipality in the
county area in which tangible personal property purchased at retail is
stored, used, or consumed in this State. Utilities are required to
report sales in the county or municipality in which consumption of the
tangible personal property occurs. A taxpayer subject to the tax
imposed by Article 6, Chapter 35 of Title 12, who owns or manages
rental units in more than one county or municipality shall report
separately in his sales tax return the total gross proceeds from
business done in each county or municipality.
Section 4-10-25. The gross proceeds of sales of tangible
personal property delivered after the imposition date of the tax
levied under Section 4-10-20 in a county, either under the terms of a
construction contract executed before the imposition date, or a
written bid submitted before the imposition date, culminating in a
construction contract entered into before or after the imposition
date, are exempt from the local sales and use tax provided in Section
4-10-20 if a verified copy of the contract is filed with the South
Carolina Tax Commission within six months after the imposition of the
local sales and use tax.
Section 4-10-30. (A) The county election commission in each
county shall conduct a referendum on the Tuesday following the first
Monday in November on the question of implementing the local option
sales and use tax within the county area. The state election laws
apply to the referendum mutatis mutandis. The county election
commission shall publish the results of the referendum and certify
them to the county council. The sales and use tax must not be imposed
in the county area, unless a majority of the qualified electors voting
in the referendum approve the question.
(B) The ballot must read substantially as follows:
'Must a one percent sales and use tax be levied in
County for the purpose of allowing a credit against a taxpayer's
county and municipal ad valorem tax liability and for the purpose of
funding county and municipal operations in the
County area?
Yes []
No [] '
(C) If the question is not approved at the initial referendum,
the county council may call for another referendum on the question.
However, following the initial referendum, a referendum for this
purpose must not be held more often than once in twelve months and
must be held on the Tuesday following the first Monday in November.
(D) Two weeks before the referendum the county council and the
municipal councils in the county area shall publish in a newspaper of
general circulation within the jurisdiction the anticipated credit
against property taxes in the first year of implementation of the
property tax credit fund. The notice must show the anticipated credit
on the following classes of property:
(1) a primary residence;
(2) personal property including, but not limited to, an
automobile;
(3) a commercial facility;
(4) an industrial facility.
Section 4-10-35. (A) Upon petition of fifteen percent of
the qualified electors of a county presented to the governing body of
that county which has implemented the one percent sales and use tax
authorized by this chapter requesting that this tax be rescinded, the
county governing body shall conduct a referendum on the Tuesday
following the first Monday in November next following on the question
of rescinding the local option sales and use tax within the county
area. The state election laws apply to the referendum mutatis
mutandis. The county election commission shall publish the results of
the referendum and certify them to the county council. The sales and
use tax must be rescinded in the county area upon the certification of
the results if a majority of the qualified electors voting in the
referendum vote in favor of rescinding the tax.
(B) The ballot must read substantially as follows:
'Must the one percent local option sales and use tax levied in
County pursuant to Chapter 10, Title 4 of the 1976
Code be rescinded?
Yes []
No []
(C) A referendum for rescission of this tax may not be held
earlier than two years after the tax has been levied in the county.
If a majority of the qualified electors voting in the rescission
referendum vote against rescinding the tax, no further rescission
referendums may be held for a period of two years. If a majority of
the qualified electors vote in favor of rescinding the tax, the tax
may not be reimposed in the county for a period of two years. The
petition requesting rescission must be presented to the county
governing body at least one hundred twenty days before the Tuesday
following the first Monday of November of that year or the referendum
must be held on the Tuesday following the first Monday of November of
the following year.
Section 4-10-40. (A) The revenue allocated to the Property
Tax Credit Fund, as provided in Section 4-10-90, must be distributed
to the county and the municipalities in the county area as follows:
(1) sixty-seven percent to the county;
(2) thirty-three percent to the municipalities in the
county area so that each municipality receives an amount equal to what
its percentage of population bears to the total population in all the
municipalities in the county area.
(B) All of the revenue received by a county and municipality
from the Property Tax Credit Fund must be used to provide a credit
against the property tax liability of taxpayers in the county and
municipality in an amount determined by multiplying the appraised
value of the taxpayer's taxable property by a fraction in which the
numerator is the total estimated revenue received by the county or
municipality from the Property Tax Credit Fund during the applicable
tax year and the denominator is the total of the appraised value of
taxable property in the county or municipality as of January first of
the applicable taxable year.
(C) All interest accruing to the credit funds received by a
county or a municipality from the Property Tax Credit Fund must be
used to provide an additional credit as provided in this section.
(D) If a municipality has adopted or adopts a redevelopment plan
for a tax increment financed redevelopment project pursuant to Chapter
6 of Title 31, a deficiency resulting from the application of this
section in the tax allocation fund or separate fund established to pay
project costs must be funded from the municipality's allocation from
the County/Municipal Revenue Fund each year so as to provide full
funding for the project. A tax increment financing bond holder,
agent, or trustee may enforce this requirement.
Section 4-10-50. (A) The revenue generated in a county area
and set aside and allocated to the County/Municipal Revenue Fund must
be distributed to the county and the municipalities in the county area
as follows:
(1) fifty percent based upon the location of the sale;
(2) fifty percent based on population.
(B) The population of the county is the population of the county
area, and the population of the municipalities is the population
within the corporate boundaries of the municipalities in the county
area.
Section 4-10-60. (A) At the end of each fiscal year and
before August first a percentage, to be determined by the State
Treasurer and not to exceed five percent of collections, must be
withheld from those county areas collecting five million dollars or
more from the sales and use tax authorized by this chapter, and that
amount must be distributed to assure that each county area receives a
minimum distribution. The difference between the minimum distribution
and the actual collections within a county area must be distributed to
the eligible units within the county area based on population as
provided for in this chapter.
(B) The amount withheld from those county areas collecting five
million dollars or more must be apportioned among the county and the
municipalities in the county area in the same proportion as those
units received remittances as provided in this chapter. An amount
withheld in excess must be distributed back to the county areas whose
collections exceed five million dollars based on the ratio of the
funds available to the collections by each county area.
(C) As a condition precedent to a county area being subject to
an assessment by the State Treasurer or being a recipient of revenue
pursuant to this section, the county area must have implemented the
sales and use tax as authorized by this chapter.
(D) The provisions of subsection (A) do not apply if the total
number of county areas adopting the sales and use tax authorized by
this chapter, which are projected by the Tax Commission to collect
five million dollars or more, generated fifty percent or less during
the most currently available fiscal year of the total statewide
collections from the levy of a one percent sales and use tax, then
those county areas generating five million dollars or more must be
assessed five percent of the amount generated in the county area, and
that amount must be used as a supplement to those county areas
generating less than the minimum distribution. The supplement to
those county areas generating less than the minimum distribution must
be distributed so that each county area receives an amount equal to
what its percentage of population bears to the total population in all
of the county areas generating less than the minimum distribution
which have implemented the sales and use tax authorized by this
chapter. Once the amount of the supplement has been determined for
each of the county areas to be supplemented, then the supplement must
be distributed to the eligible units within the county area based on
population as provided for in this chapter. However, the supplement
to the county area combined with collections within the county area
may not exceed the minimum distribution.
Section 4-10-70. No eligible unit within a county area may
receive less from the distribution of the sales and use tax authorized
by this chapter than it received in the previous fiscal year.
However, if the amount of collections from the sales and use tax in
the county area is less than the preceding fiscal year's collections,
then the distributions to the eligible units within the county area
must be reduced on a proportional basis.
Section 4-10-80. Annually by August fifteenth the State
Treasurer shall report to the county chief administrative officers,
county treasurers, and municipal clerks in those county areas which
levy the sales and use tax authorized by this chapter the total amount
of revenue collected as reported by the Tax Commission in the county
area for the preceding fiscal year.
Section 4-10-90. (A) The Tax Commission shall administer
and collect the local sales and use tax in the manner that sales and
use taxes are administered and collected pursuant to Chapter 35 of
Title 12. The commission may prescribe forms and promulgate
regulations in conformity with this chapter, including tables
prescribing the amount to be added to the sales price. The county
shall notify the Tax Commission and the State Treasurer through
delivery of a certified copy of a resolution adopted by the county
following the referendum within ten days of the date of the referendum
for the tax to be imposed at the beginning of the next quarter.
Failure to deliver the resolution within the ten days shall cause a
delay of the imposition until the first day of the subsequent calendar
quarter. Notwithstanding the provisions of this subsection, the local
sales and use tax must not be imposed before July first following the
first referendum held pursuant to Section 4-10-30.
(B) All revenues collected by the Tax Commission on behalf of a
county area pursuant to this chapter must be remitted to the State
Treasurer to be credited to a Local Sales and Use Tax Fund which is
separate and distinct from the state general fund. After deducting
the amount of refunds made and the costs to the Tax Commission of
administering the tax, not to exceed one-half of one percent of the
fund or seven hundred fifty thousand dollars, whichever is greater,
the State Treasurer shall deposit the revenue into the Local Sales and
Use Tax Fund which consists of two separate funds: the Property Tax
Credit Fund and the County/Municipal Revenue Fund. The revenue
collected pursuant to this chapter must be allocated to each fund as
follows:
(1) During the first year after the effective date of this
act, sixty-three percent to the Property Tax Credit Fund and
thirty-seven percent to the County/Municipal Revenue Fund.
(2) During the second year after the effective date of
this act, sixty-five percent to the Property Tax Credit Fund and
thirty-five percent to the County/Municipal Revenue Fund.
(3) During the third year after the effective date of this
act, sixty-seven percent to the Property Tax Credit Fund and
thirty-three percent to the County/Municipal Revenue Fund.
(4) During the fourth year after the effective date of
this act, sixty-nine percent to the Property Tax Credit Fund and
thirty-one percent to the County/Municipal Revenue Fund.
(5) During the fifth year after the effective date of this
act, and each year thereafter, seventy-one percent to the Property Tax
Credit Fund and twenty-nine percent to the County/Municipal Revenue
Fund.
The allocation of revenue to each fund provided for in this section
must remain uniform as to the percentage allocated to each fund
regardless of the year in which a county adopts the local sales and
use tax. The State Treasurer shall distribute monthly the revenues
according to the provisions of this chapter.
(C) The Tax Commission shall furnish data to the State Treasurer
and to the governing bodies of the counties and municipalities
receiving revenues for the purpose of calculating distributions and
estimating revenues. The information which may be supplied to
counties and municipalities includes, but is not limited to, gross
receipts, net taxable sales, and tax liability by taxpayers.
Information by taxpayer received by appropriate county or municipal
officials is considered confidential and is governed by the provisions
of Section 12-54-240. A person violating this section is subject to
the penalties provided in Section 12-54-240. If because of refunds by
the Tax Commission or for any other reason, an overpayment is made to
a county or municipality, the State Treasurer shall withhold from
subsequent payments a sufficient amount to adjust for the overpayment
and direct funds to the proper entity. However, all corrections of
allocations from the Local Sales and Use Tax Fund must be made within
the current fiscal year.
Section 4-10-100. Notwithstanding the date of general
imposition of the local sales and use tax authorized pursuant to this
chapter, with respect to services that are regularly billed on a
monthly basis, the local sales and use tax is imposed beginning on the
first day of the billing period beginning on or after the date of
general imposition."
Estimated sales tax liability exclusion
SECTION 2. Section 12-35-580 of the 1976 Code is amended by
adding at the end:
"For the purposes of this section the imposition of a local
option sales and use tax provided for in Chapter 10 of Title 4 must
not be taken into account."
Tax Commission administrative expenses
SECTION 3. (A) Of the funds appropriated in Part I of the
1990-91 General Appropriations Act under formula funded Aid to
Counties and Municipalities, an amount not to exceed seven hundred
fifty thousand dollars must be allocated to the South Carolina Tax
Commission to defray the administrative start-up expenses incurred by
the commission in fiscal year 1990-91 for the implementation of the
local sales and use tax provided for in Chapter 10 of Title 4 of the
1976 Code and as added in Section 1 of this act. The State Treasurer
shall withhold this amount from the income tax distribution with
counties and municipalities sharing equally. No funds provided for in
this section may be drawn upon by the commission before November,
1990. However, no funds may be drawn unless at least one favorable
referendum has been conducted in which the electors of that county
have approved the imposition of the tax. If the expenses are not
incurred by the commission by May 31, 1991, the funds must be
distributed to the counties and municipalities.
(B) The amount allocated to the commission pursuant to
subsection (A) must be reimbursed by the commission from the
administrative expense provided to the commission in Section
4-10-90(B) of the 1976 Code, as added in Section 1 of this act.
Time effective
SECTION 4. This act takes effect upon approval by the Governor.
Approved the 2nd day of February, 1990.
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