Current Status Introducing Body:Senate Bill Number:699 Primary Sponsor:Land Type of Legislation:GB Subject:Jobs tax credit Residing Body:House Date Tabled:19940602 Computer Document Number:JIC/5809HC.93 Introduced Date:19930415 Date of Last Amendment:19940531 Last History Body:House Last History Date:19940602 Last History Type:Tabled Scope of Legislation:Statewide All Sponsors:Land Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
____ ______ ____________ ______________________________ ___ ____________
699 House 19940602 Tabled
699 Senate 19940531 House amendments amended,
returned to House
699 House 19940527 Read third time, returned to
Senate with amendment
699 House 19940526 Amended, read second time,
unanimous consent for third
reading on Friday, May 27,
1994
699 House 19940518 Recalled from Committee 30
699 House 19940505 Recommitted to Committee 30
699 House 19940421 Debate adjourned until
Thursday, May 5, 1994
699 House 19940406 Debate adjourned until
Thursday, April 21, 1994
699 House 19940309 Committee Report: Favorable 30
699 House 19940126 Introduced, read first time, 30
referred to Committee
699 Senate 19940125 Read third time, sent to House
699 Senate 19940120 Amended, read second time
699 Senate 19940119 Committee Report: Favorable 06
with amendment
699 Senate 19930415 Introduced, read first time, 06
referred to Committee
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Indicates Matter Stricken
Indicates New Matter
HOUSE AMENDMENTS AMENDED
May 31, 1994
S. 699
S. Printed 5/31/94--S.
Read the first time April 15, 1993.
TO AMEND SECTION 12-7-1220, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE TARGETED JOBS TAX CREDIT, SO AS TO PROVIDE TERMS AND CONDITIONS UNDER WHICH THE CREDITS MAY BE USED BY A SUCCESSOR CORPORATION FOLLOWING A MERGER, CONSOLIDATION, OR REORGANIZATION WHERE TAX ATTRIBUTES SURVIVE; AND TO AMEND THE 1976 CODE BY ADDING SECTION 12-7-1645 SO AS TO AUTHORIZE THE FILING OF A CONSOLIDATED CORPORATE INCOME TAX RETURN AND TO PROVIDE THE TERMS AND CONDITIONS UNDER WHICH SUCH RETURNS MAY BE FILED.
Amend Title To Conform
Whereas, the General Assembly has enacted various income tax credits, including the jobs tax credit, as inducements to businesses to locate, expand, or carry on certain activities in this State; and
Whereas, many businesses operate through more than one corporation, including parent and subsidiary and commonly owned sister corporations; and
Whereas, the intent of the General Assembly was that, if such a group of corporations file a consolidated income tax return, a credit generated by one member of the group should be allowed to offset the tax liability of other members. Now, therefore,
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-7-1220(F) of the 1976 Code, as last amended by Act 170 of 1987, is further amended to read:
"(F) The sale, merger, acquisition, or bankruptcy of a corporation may not create new eligibility in a succeeding corporation, but unused job tax credits may be transferred and continued by a transferee of the corporation. The appropriate commission shall determine whether or not qualifying net increases or decreases have occurred and may require reports, promulgate regulations, and hold hearings needed for substantiation and qualification. The merger, consolidation, or reorganization of a corporation where tax attributes survive does not create new eligibility in a succeeding corporation, but unused job tax credits may be transferred and continued by the succeeding corporation. In addition, a corporation may assign its rights to its jobs tax credit to another corporation if it transfers all, or substantially all, of the assets of the corporation or all, or substantially all, of the assets of a trade or business or operating division of a corporation related to the generation of the jobs tax credits to that corporation if the required number of new jobs is maintained for that amount of credit. No corporation is allowed a jobs tax credit if the net employment increase for that corporation falls below ten for a less developed county, eighteen for a moderately developed county, or fifty for a developed county. The Department of Revenue and Taxation or Department of Insurance, as appropriate, shall determine whether or not qualifying net increases or decreases have occurred and may require reports, promulgate regulations, and hold hearings needed for substantiation and qualification."
SECTION 2. Article 13, Chapter 7, Title 12 of the 1976 Code is amended by adding:
"Section 12-7-1645. (A) A consolidated return may be filed for the following corporations:
(1) a parent and substantially controlled subsidiary or subsidiaries;
(2) two or more corporations under substantially the entire control of the same interest.
The terms `substantially controlled' and `substantially the entire control' mean the ownership of at least eighty percent of the total combined voting power of all classes of stock of all corporations that are a party to a consolidated return.
(B) All corporations included in a consolidated return must be subject to tax under Section 12-7-230.
(C) A corporation doing business entirely within this State may consolidate with a corporation doing a multistate business. Two or more corporations doing a multistate business may file a consolidated return.
(D) A consolidated return means a single return for two or more corporations in which income or loss is separately determined as follows:
(1) South Carolina taxable income or loss is computed separately for each corporation;
(2) allocable income is allocated separately for each corporation;
(3) apportionable income or loss is computed utilizing separate apportionment factors for each corporation;
(4) income or loss computed in accordance with items (1) through (3) of this subsection is combined and reported on a single return for the controlled group.
(E) All corporations included in a consolidated return or a combined return must use the same accounting year.
(F) If a corporation which files or is required to file a consolidated return is entitled to one or more income tax credits, including the carryover of unused credits from prior years, the income tax credits may be determined on a consolidated basis. Limitations on credits which refer to the income or the income tax liability of a corporation are deemed to refer to the income or income tax liability of the consolidated group, and credits shall reduce the consolidated group's tax liability regardless of whether or not the corporation entitled to the credit contributed to the tax liability of the consolidated group.
(G) The election to file a consolidated return or separate returns must be made on an original and timely return and may not be changed after the return is filed.
(H) Once an election is made to file a consolidated return, this election must be adhered to until permission is granted by the Department of Revenue and Taxation to file separate returns."
SECTION 3. Section 12-7-430 of the 1976 Code is amended by adding:
"(i) Notwithstanding Section 12 of Act 101 of 1985, Internal Revenue Code Section 7518 applies retroactively to taxable years beginning after 1986 and applies to any taxpayer."
SECTION 4. Upon approval of the Governor, SECTIONS 1 and 2 of this act are effective for tax years beginning after 1993. SECTION 3 of this act takes effect upon approval of the Governor.