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Indicates Matter Stricken
Indicates New Matter
AMENDED
May 7, 2002
S. 852
S. Printed 5/7/02--H.
Read the first time February 19, 2002.
TO AMEND SECTION 12-44-30, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS FOR PURPOSES OF THE FEE IN LIEU OF TAX SIMPLIFICATION ACT, SO AS TO INCREASE THE EXTENSION ALLOWED IN THE INVESTMENT PERIOD FROM TWO TO FIVE YEARS; AND TO AMEND SECTION 12-44-90, RELATING TO THE FILING REQUIREMENTS UNDER THE FEE IN LIEU OF TAX SIMPLIFICATION ACT, SO AS TO ALLOW THE DEPARTMENT OF REVENUE TO GRANT A MAXIMUM SIXTY-DAY EXTENSION FOR FILING RETURNS AND TO PROVIDE THE REQUIREMENTS TO OBTAIN THE EXTENSION.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-44-30(13) of the 1976 Code is amended to read:
"(13) 'Investment period' means the period beginning sixty days before the county takes action or identifies the project under Section 12-44-40(C), and ending five years after the commencement date; except that for a project with an enhanced investment as described above, the period ends eight years after the commencement date. The minimum investment must be completed within five years of the commencement date. For an enhanced investment, the enhanced investment must be completed within eight years of the commencement date. If the sponsor does not anticipate completing the project within this period, the sponsor may apply to the county before the end of the period for an extension of time to complete the project. If the county agrees to an extension, it must do so in writing and furnish a copy of the extension to the Department of Revenue within thirty days of the date the extension was granted. The extension may not exceed two five years in which to complete the project. An extension is not allowed for the time period in which the sponsor must meet the minimum investment requirement."
SECTION 2. Section 12-44-90 of the 1976 Code is amended by adding at the end:
"(H) The department, for good cause, may allow additional time for filing of returns required under this chapter. The request for an extension may be granted only if the request is filed with the department on or before the date the return is due. However, the extension must not exceed sixty days from the date the return is due. The department shall develop applicable forms and procedures for handling and processing extension requests. An extension may not be granted to a taxpayer who has been granted an extension for a previous period and has not fulfilled the requirements of the previous period."
SECTION 3. Section 4-29-67 of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding an appropriately lettered subsection at the end to read:
"( )(1) All agreements entered into pursuant to this section must include as the first portion of the document a recapitulation of the remaining contents of the document which includes, but is not limited to, the following:
(a) the legal name of each party to the agreement;
(b) the county and street address of the project and property to be subject to the agreement;
(c) the minimum investment agreed upon;
(d) the length and term of the agreement;
(e) the assessment ratio applicable for each year of the agreement;
(f) the millage rate applicable for each year of the agreement;
(g) a schedule showing the amount of the fee and its calculation for each year of the agreement;
(h) a schedule showing the amount to be distributed annually to each of the affected taxing entities;
(i) a statement answering the following questions:
(i) Is the project to be located in a multi-county park formed pursuant to Chapter 29 of Title 4?;
(ii) Is disposal of property subject to the fee allowed?;
(iii) Will special source revenue bonds be issued or credits for infrastructure investment be allowed in connection with this project?;
(iv) Will payment amounts be modified using a net present value calculation?; and
(v) Do replacement property provisions apply?
(j) any other feature or aspect of the agreement which may affect the calculation of subitems (g) and (h) of this item;
(k) a description of the effect upon the schedules required by subitems (g) and (h) of this item of any feature covered by subitems (i) and (j) not reflected in the schedules for subitems (g) and (h);
(l) which party or parties to the agreement are responsible for updating any information contained in the summary document.
(2) The auditor shall prepare a bill for each installment of the fee according to the schedule set forth in subitem (1)(g) or as modified pursuant to subitem (1)(j), (k), or (l) and that payment must be distributed to the affected taxing entities according to the schedule in subitem (1)(g) or as modified pursuant to subitem (1)(j), (k), or (l)."
SECTION 4. Chapter 12, Title 4 of the 1976 Code is amended by adding:
"Section 4-12-45. (A) All agreements entered into pursuant to this chapter must include as the first portion of the document a recapitulation of the remaining contents of the document which includes, but is not limited to, the following:
(1) the legal name of each party to the agreement;
(2) the county and street address of the project and property to be subject to the agreement;
(3) the minimum investment agreed upon;
(4) the length and term of the agreement;
(5) the assessment ratio applicable for each year of the agreement;
(6) the millage rate applicable for each year of the agreement;
(7) a schedule showing the amount of the fee and its calculation for each year of the agreement;
(8) a schedule showing the amount to be distributed annually to each of the affected taxing entities;
(9) a statement answering the following questions:
(a) Is the project to be located in a multi-county park formed pursuant to Chapter 29 of Title 4?;
(b) Is disposal of property subject to the fee allowed?;
(c) Will special source revenue bonds be issued or credits for infrastructure investment be allowed in connection with this project?;
(d) will payment amounts be modified using a net present value calculation; and
(e) Do replacement property provisions apply?
(10) any other feature or aspect of the agreement which may affect the calculation of items (7) and (8) of this subsection;
(11) a description of the effect upon the schedules required by items (7) and (8) of this subsection of any feature covered by items (9) and (10) not reflected in the schedules for items (7) and (8) of this subsection;
(12) which party or parties to the agreement are responsible for updating any information contained in the summary document.
(B) The auditor shall prepare a bill for each installment of the fee according to the schedule set forth in subsection (A)(7) or as modified pursuant to subsection (A)(10), (11), or (12) and that payment must be distributed to the affected taxing entities according to the schedule in subsection (A)(8) or as modified pursuant to subsection (A)(10), (11), or (12)."
SECTION 5. Chapter 44, Title 12 of the 1976 Code is amended by adding:
"Section 12-44-55. (A) All agreements entered into pursuant to this chapter must include as the first portion of the document a recapitulation of the remaining contents of the document which includes, but is not limited to, the following:
(1) the legal name of each party to the agreement;
(2) the county and street address of the project and property to be subject to the agreement;
(3) the minimum investment agreed upon;
(4) the length and term of the agreement;
(5) the assessment ratio applicable for each year of the agreement;
(6) the millage rate applicable for each year of the agreement;
(7) a schedule showing the amount of the fee and its calculation for each year of the agreement;
(8) a schedule showing the amount to be distributed annually to each of the affected taxing entities;
(9) a statement answering the following questions:
(a) Is the project to be located in a multi-county park formed pursuant to Chapter 29 of Title 4?;
(b) Is disposal of property subject to the fee allowed?;
(c) Will special source revenue bonds be issued or credits for infrastructure investment be allowed in connection with this project?;
(d) Will payment amounts be modified using a net present value calculation?; and
(e) Do replacement property provisions apply?
(10) any other feature or aspect of the agreement which may affect the calculation of items (7) and (8) of this subsection;
(11) a description of the effect upon the schedules required by items (7) and (8) of this subsection of any feature covered by items (9) and (10) not reflected in the schedules for items (7) and (8) of this subsection;
(12) which party or parties to the agreement are responsible for updating any information contained in the summary document.
(B) The auditor shall prepare a bill for each installment of the fee according to the schedule set forth in subsection (A)(7) or as modified pursuant to subsection (A)(10), (11), or (12) and that payment must be distributed to the affected taxing entities according to the schedule in subsection (A)(8) or as modified pursuant to subsection (A)(10, (11), or (12)."
SECTION 6. Chapter 12 of the 1976 Code is amended by adding:
Section 12-35-10. This act may be cited as the 'Simplified Sales and Use Tax Administration Act'.
Section 12-35-20. As used in this chapter:
(1) 'Agreement' means the Streamlined Sales and Use Tax Agreement.
(2) 'Certified automated system' means software certified jointly by the states that are signatories to the agreement to calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit to the appropriate state, and maintain a record of the transaction.
(3) 'Certified service provider' means an agent certified jointly by the states that are signatories to the agreement to perform all of the seller's sales tax functions.
(4) 'Department' means the South Carolina Department of Revenue.
(5) 'Director' means the director of the department.
(6) 'Person' means an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or any other legal entity.
(7) 'Sales tax' means the tax imposed pursuant to Article 9, Chapter 36 of this title.
(8) 'Seller' means a person making sales, leases, or rentals of personal property or services.
(9) 'State' means a state of the United States and the District of Columbia.
(10) 'Use tax' means the tax imposed pursuant to Article 13, Chapter 36 of this title.
Section 12-35-30. The General Assembly finds that a simplified sales and use tax system will reduce and over time eliminate the burden and cost for all vendors to collect this State's sales and use tax. The General Assembly further finds that this State should participate in multistate discussions to review or amend, or both, the terms of the agreement to simplify and modernize sales and use tax administration in order substantially to reduce the burden of tax compliance for all sellers and for all types of commerce.
Section 12-35-40. For the purposes of reviewing or amending, or both, the agreement embodying the simplification requirements as contained in Section 12-35-70 of this chapter, this State shall enter into multistate discussions. For purposes of the discussions, this State must be represented by four delegates. The four delegates are the director of the department or the director's designee, the Chairman of the House Ways and Means Committee or the chairman's designee, the Chairman of the Senate Finance Committee or the chairman's designee, and one delegate appointed by the Governor from the business community. Any decision concerning the agreement must be made by a majority of this State's delegation present at the meeting. Members of the delegation shall receive the mileage, subsistence, and per diem authorized by law for members of state boards, committees, and commissions, and must be paid from sales and use tax collections.
Section 12-35-50. The department shall enter into the Streamlined Sales and Use Tax Agreement with one or more states to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance for all sellers and for all types of commerce. In furtherance of the agreement, the department may act jointly with other states that are members of the agreement to establish standards for certification of a certified service provider and certified automated system and establish performance standards for multistate sellers.
The department or the director's designee also may take other actions reasonably required to implement the provisions set forth in this chapter. Other actions authorized by this section include, but are not limited to, the adoption of rules and regulations and the joint procurement, with other member states, of goods and services in furtherance of the cooperative agreement.
The director or the director's designee may represent this State before the other states that are signatories to the agreement.
Section 12-35-60. No provision of the agreement authorized by this chapter in whole or part invalidates or amends any provision of the law of this State. Adoption of the agreement by this State does not amend or modify any law of this State. Implementation of any condition of the agreement in this State, whether adopted before, at, or after membership of this State in the agreement, must be by the action of this State.
Section 12-35-70. The department shall not enter into the Streamlined Sales and Use Tax Agreement unless the agreement requires each state to abide by the following requirements:
(1) Simplified State Rate. The agreement must set restrictions to limit over time the number of state rates.
(2) Uniform Standards. The agreement must establish uniform standards for the following:
(a) the sourcing of transactions to taxing jurisdictions;
(b) the administration of exempt sales;
(c) sales and use tax returns and remittances.
(3) Central Registration. The agreement must provide a central, electronic registration system that allows a seller to register to collect and remit sales and use taxes for all signatory states.
(4) No Nexus Attribution. The agreement must provide that registration with the central registration system and the collection of sales and use taxes in the signatory states is not used as a factor in determining whether the seller has nexus with a state for any tax.
(5) Local Sales and Use Taxes. The agreement must provide for reduction of the burdens of complying with local sales and use taxes through the following:
(a) restricting variances between the state and local tax bases;
(b) requiring states to administer any sales and use taxes levied by local jurisdictions within the state so that sellers collecting and remitting these taxes do not have to register or file returns with, remit funds to, or be subject to independent audits from local taxing jurisdictions;
(c) restricting the frequency of changes in the local sales and use tax rates and setting effective dates for the application of local jurisdictional boundary changes to local sales and use taxes;
(d) providing notice of changes in local sales and use tax rates and of changes in the boundaries of local taxing jurisdictions.
(6) Monetary Allowances. The agreement must outline any monetary allowances that are to be provided by the states to sellers or certified service providers.
(7) State Compliance. The agreement must require each state to certify compliance with the terms of the agreement before joining and to maintain compliance, under the laws of the member state, with all provisions of the agreement while a member.
(8) Consumer Privacy. The agreement must require each state to adopt a uniform policy for certified service providers that protects the privacy of consumers and maintains the confidentiality of tax information.
(9) Advisory Councils. The agreement must provide for the appointment of an advisory council of private sector representatives and an advisory council of nonmember state representatives to consult with in the administration of the agreement.
Section 12-35-80 The agreement authorized by this chapter is an accord among individual cooperating sovereigns in furtherance of their governmental functions. The agreement provides a mechanism among the member states to establish and maintain a cooperative, simplified system for the application and administration of sales and use taxes under the duly adopted law of each member state.
Section 12-35-90. (A) The agreement authorized by this chapter binds and inures only to the benefit of this State and the other member states. No person, other than a member state, is an intended beneficiary of the agreement. Any benefit to a person other than a state is established by the law of this State and the other member states and not by the terms of the agreement.
(B) Consistent with subsection (A), no person has any cause of action or defense under the agreement or by virtue of this state's approval of the agreement. No person, in any action brought under any provision of law, may challenge any action or inaction by any department, agency, or other instrumentality of this State, or any political subdivision of this State on the ground that the action or inaction is inconsistent with the agreement.
(C) No law of this State, or the application of the law, may be declared invalid as to any person or circumstance on the ground that the provision or application is inconsistent with the agreement.
Section 12-35-100. (A) A certified service provider is the agent of a seller, with whom the certified service provider has contracted, for the collection and remittance of sales and use taxes. As the seller's agent, the certified service provider is liable for sales and use tax due each member state on all sales transactions it processes for the seller except as set out in this section.
A seller that contracts with a certified service provider is not liable to the state for sales or use tax due on transactions processed by the certified service provider unless the seller misrepresented the type of items it sells or committed fraud. In the absence of probable cause to believe that the seller has committed fraud or made a material misrepresentation, the seller is not subject to audit on the transactions processed by the certified service provider. A seller is subject to audit for transactions not processed by the certified service provider. The member states acting jointly may perform a system check of the seller and review the seller's procedures to determine if the certified service provider's system is functioning properly and the extent to which the seller's transactions are being processed by the certified service provider.
(B) A person that provides a certified automated system is responsible for the proper functioning of that system and is liable to the state for underpayments of tax attributable to errors in the functioning of the certified automated system. A seller that uses a certified automated system remains responsible and is liable to the state for reporting and remitting tax.
(C) A seller that has a proprietary system for determining the amount of tax due on transactions and has signed an agreement establishing a performance standard for that system is liable for the failure of the system to meet the performance standard."
SECTION 7. A. Section 4-12-30(C)(2), as last amended by Act 399 of 2000, is further amended to read:
"(2) From the end of the property tax year in which the sponsor and the county execute the initial lease agreement, the sponsor has five years in which to complete its investment for purposes of qualifying for this section. If the sponsor does not anticipate completing the project within five years, the sponsor may apply to the county before the end of the five-year period for an extension of time to complete the project. If the county agrees to grant the extension, the county must do so in writing, and a copy must be delivered to the department within thirty days of the date the extension was granted. The extension may not exceed two five years in which to complete the project. There is no extension allowed for the five-year period in which to meet the minimum level of investment. If the minimum level of investment is not met within five years, all property under the lease agreement or agreements, reverts retroactively to the payments required by Section 4-12-20. The difference between the fee actually paid by the sponsor and the payment which is due under Section 4-12-20 is subject to interest, as provided in Section 12-54-25(D). Any property placed in service after the five-year period, or seven up to ten years in the case of a project which has received an extension, is not part of the fee agreement under subsection (D)(2) and is subject to the payments required by Section 4-12-20 if the county has title to the property, or to property taxes, as provided in Chapter 37 of Title 12 if the sponsor has title to the property.
For purposes of those businesses qualifying under subsection (D)(4), the five-year period referred to in this subsection is eight years and the seven-year period is ten years."
B. Section 4-12-30(Q) of the 1976 Code, as last amended by Act 149 of 1997, is further amended by adding an item at the end to read:
"(8) The department, for good cause, may allow additional time for filing of returns required under this chapter. The request for an extension may be granted only if the request is filed with the department on or before the date the return is due. However, the extension must not exceed sixty days from the date the return is due. The department shall develop applicable forms and procedures for handling and processing extension requests. An extension may not be granted to a taxpayer who has been granted an extension for a previous period and has not fulfilled the requirements of the previous period."
C. Section 4-29-67(C)(2)(a) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(a) From the end of the property tax year in which the investor and the county execute the initial lease agreement, the investor has five years in which to complete its investment for purposes of qualifying for this section. If the investor does not anticipate completing the project within five years, the investor may apply to the county before the end of the five-year period for an extension of time, up to two five years, to complete the project. The county's agreement to grant the extension must be in writing, and a copy must be delivered to the Department of Revenue within thirty days of the date the extension was granted."
D. Section 4-29-67(C)(2)(c) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(c) Unless property qualifies as replacement property pursuant to a contract provision enacted pursuant to subsection (F)(2), property placed in service after the five-year period, or seven up to ten years in the case of a project which has received an extension, is not part of the fee agreement pursuant to subsection (D)(2) and is subject to the payments required by Section 4-29-60 if the county has title to:
(i) the property; or
(ii) to property taxes, as provided in Chapter 37 of Title 12, if the investor has title to the property."
E. Section 4-29-67(S) of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding a new item at the end to read:
"(7) The department, for good cause, may allow additional time for filing of returns required under this section. The request for an extension may be granted only if the request is filed with the department on or before the date the return is due. However, the extension must not exceed sixty days from the date the return is due. The department shall develop applicable forms and procedures for handling and processing extension requests. An extension may not be granted to a taxpayer who has been granted an extension for a previous period and has not fulfilled the requirements of the previous period."
F. Section 12-10-80(A)(9) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(9) Each qualifying business claiming in excess of ten thousand dollars in a calendar year must furnish an audited to the council and to the department a report prepared by an independent certified public accountant that itemizes the sources and uses of the funds. The audited report must be filed with the council and the department no later than June thirtieth following the calendar year in which the job development credits are claimed, except when a qualifying business obtains the written approval by the council for an extension of that date. Extensions may be granted only for good cause shown. The department shall impose a penalty pursuant to Section 12-54-210 for all reports filed after June thirtieth or the approved extension date, whichever is later. The department shall audit each qualifying business with claims in excess of ten thousand dollars in a calendar year at least once every three years to verify proper sources and uses of the funds."
G. Section 12-10-80(C)(3) of the 1976 Code, as last amended by Act 399 of 2000, is further amended by adding two new subitems at the end to read:
"(h) training for all relevant employees that enable a company to export or increase a company's ability to export its products, including training for logistics, regulatory, and administrative areas connected to the company's export process and other export process training that allows a qualified company to maintain or expand its business in this State;
(i) apprenticeship programs."
H. Chapter 10, Title 12 of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding:
"Section 12-10-105. In addition to the application fee provided in Section 12-10-100, an additional annual fee of one thousand dollars must be remitted by those qualifying businesses receiving in excess of ten thousand dollars of job development credits in one calendar year to the department to be used to reimburse the Department of Revenue for costs incurred auditing reports required pursuant to Section 12-10-80(A)."
I. Section 12-37-220(B)(11) of the 1976 Code is amended by adding a subitem at the end to read:
"(e) All property of nonprofit housing corporations or solely-owned instrumentalities of these corporations which is devoted to providing housing to low or very low income residents. A nonprofit housing corporation must satisfy the safe harbor provisions of Revenue Procedure 96-32 issued by the Internal Revenue Service to qualify for this exemption."
SECTION 8. A. Section 12-6-3910 of the 1976 Code is amended to read:
"Section 12-6-3910. (A) South Carolina estimated tax payments must be made in a form prescribed by the department in accordance with Internal Revenue Code Sections 6654 and 6655 except that:
(1) the small amount provisions in Internal Revenue Code Sections 6654(e)(1) and 6655(f) are one hundred dollars rather than five hundred dollars;
(2) income for the first installment for corporations is annualized using the first two three months of the taxable year;
(3)(a) The due dates of the installment payments for calendar year taxpayers other than corporations are:
First quarter: April 15
Second quarter: June 15
Third quarter: September 15
Fourth quarter: January 15
of the following
taxable year.
(b) The due dates of the installment payments for calendar year corporations are:
First quarter: March April 15
Second quarter: June 15
Third quarter: September 15
Fourth quarter: December 15.
(c) In applying the estimated tax payment provisions to a taxable year beginning on a date other than January 1, the month that corresponds to the months specified above must be substituted.
(B) Payments required by this section are considered payments on account of income taxes imposed by this chapter and license fees imposed by Chapter 20 for the taxable year designated.
(C) To the extent that estimated tax payments and withholdings are in excess of the taxpayer's income tax and license fee liability as shown on the income tax return, the taxpayer may claim a:
(1) refund; or
(2) credit for estimated income tax for the succeeding taxable year; or.
(3) credit against the corporate license fee for the current taxable year in the case of corporations.
(D) For corporate taxpayers, estimated tax payments will be deemed to first apply to income taxes and then apply to license fees."
B. Section 12-6-4980(B) of the 1976 Code is amended to read:
"(B) When a taxpayer other than a corporation is not required to make a payment of tax at the time of the extension, and the taxpayer has been granted an extension of time to file a federal income tax return, the taxpayer is not required to apply to the department for an extension of time to file the South Carolina return. The department shall accept a copy, if applicable, of a properly filed federal extension attached to the South Carolina return when filed. Any tax taxes shown to be due on a return required pursuant to this chapter must be paid at the time the return is due to be filed, without regard to any extension of time granted for filing the return."
C. Section 12-20-20(C) of the 1976 Code is amended to read:
"(C) The department, for good cause, may allow an extension of time for filing an annual report. A request for an extension of time for filing an annual report must be filed in accordance with Section 12-6-4980(A). An extension of time for filing does not extend the time for paying the license fee due."
D. Section 12-54-55 of the 1976 Code is amended to read:
"Section 12-54-55. In the case of an underpayment of declaration of estimated tax by an individual, estate, trust, or corporate taxpayer, instead of all other penalties provided by law, there must be added to the tax for the taxable year a penalty to be determined as follows:
(1) In the case of an individual taxpayer, estate, or trust in the same manner as prescribed by the provisions of Internal Revenue Code Section 6654. No interest or penalty is due under this item for underpayments attributable to personal service income earned in another state on which income tax due the other state was withheld.
(2) In the case of a corporate taxpayer, in the same manner as prescribed by the provisions of Internal Revenue Code Section 6655 and applicable regulations, except that:
(a) the small amount provisions are one hundred dollars rather than five hundred dollars;.
(b) the first installment payment for corporations is due on March 15, or in the case of a taxable year beginning on any date other than January 1, there is substituted the month which corresponds to that date; and
(c) for the annualized installment method, income for the first installment is annualized using the first two months of the taxable year."
E. This section takes effect upon approval by the Governor and applies for estimated taxes due after 2002.
SECTION 9. Section 12-60-470(C) of the 1976 Code is amended to read:
"(C) Only the taxpayer legally liable for the tax may file a claim for refund or receive a refund, except that after the application of Section 12-60-490: against the person claiming or receiving the refund.
(1) the assignment of a refund may be made, but only after the department has authorized the refund and issued an order for the refund to the State Treasurer's office, or
(2) a person who acts as a collector and remitter of state taxes may claim a credit or refund of the tax collected, but only if the person establishes that he has paid the tax in question to the State, and
(a) repaid the tax to the person from whom he collected it; or
(b) obtained the written consent of the person from whom he collected the tax to the allowance of the credit or refund.
(2) a purchaser who has paid sales tax to a retailer for a specific transaction may claim a refund if the retailer who paid the sales tax to the State has assigned, in writing, the right to a refund of that sales tax to the purchaser.
(3) Except as allowed in items (1) and (2) of this subsection, the taxpayer legally liable for the tax may only assign a refund to another person after the taxpayer's claim is allowed, the amount of the refund is finally decided, and the department has approved the refund."
SECTION 10. Section 12-56-20(1) of the 1976 Code is amended to read:
"(1) 'Claimant agency' means a state agency, board, committee, commission, public institution of higher learning, political subdivision, or any other governmental or quasi governmental entity of any state or the United States. It includes the South Carolina Student Loan Corporation, housing authorities established pursuant to Articles 5, 7, and 9 of Chapter 3 of Title 31, and the Internal Revenue Service, and the United States Department of Education. It also includes a private institution of higher learning for the purpose of collecting debts related to default on authorized educational loans made pursuant to Chapters Chapter 111, 113, or 115 of Title 59. 'Political subdivision' includes the Municipal Association of South Carolina and the South Carolina Association of Counties when these organizations submit claims on behalf of their members, other political subdivisions, or other claimant agencies as defined in this item. A political subdivision who submits a claim through an association is a claimant agency for the purpose of the notice and appeal provisions and other requirements of this chapter."
SECTION 11. The second paragraph of Section 59-20-20(3) of the 1976 Code, as last amended by Act 497 of 1994, is further amended to read:
"The index must be determined annually by the Department of Revenue from sales ratio data based on the most recent studies made which correspond with the base year assessments used to compute the current index pursuant to Section 12-43-250 for assessed property within a school district. The base year is the second completed taxable year preceding the fiscal year in which the index is used. The Department of Revenue shall provide the index a preliminary index by November December first of each year end and a final index by February first of each year to the State Department of Education and to the auditor of each county who shall provide the index to any governmental entity responsible for approving or levying of millages for school purposes. Changes and corrections may be made to the index before February first but no change is allowed after that date. When the assessment of property is under appeal and the appeal extends beyond the year in which the assessment made pursuant to Section 12-43-305 is applied, the Department of Revenue shall adjust the index of taxpaying ability in the year in which the appeal is resolved by the amount of any difference between the assessments. Any school district is entitled to a hearing before the Department of Revenue to review its designated index of taxpaying ability within thirty days of filing a request for the hearing. The data gathered by the Department of Revenue for the purpose of determining an annual index must be preserved as public records in the offices of the Department of Revenue for four years. The raw information gathered from the various county officers reflecting the representative sales within the school districts, the consideration, and the reported market value or assessed value for each sale are a part of the public records so preserved. The Department of Revenue shall file a statement stating the methodology employed in making the annual determination of the index and refer to all sources of factual information used in making the determination. All work sheets, computer printouts, and the actual calculation must be included as the public records to be preserved by the Department of Revenue. In determining sales to assessment ratio, the Department of Revenue shall use only reported consideration on sales for which deeds have been placed on public record. Where sufficient sales data is not available, the Department of Revenue shall make appraisals in lieu of sales in order to determine the index. The appraisals, including all working papers, must be included as the public records to be preserved by the Department of Revenue. With respect to school districts within counties where abstracts of duplicates reflecting the assessed value have been filed pursuant to Section 12-39-290, the same having been adopted by the auditors under Article 3, Chapter 43 of Title 12, the index must be on the basis of the value of the property as stated in the abstracts as adjusted by sales ratio studies up to full assessments based on full fair market value."
SECTION 12. Section 12-36-910(B)(3) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(3) gross proceeds accruing or proceeding from the charges for the ways or means for the transmission of the voice or messages, including the charges for use of equipment furnished by the seller or supplier of the ways or means for the transmission of the voice or messages. Gross proceeds from the sale of prepaid wireless calling arrangements subject to tax at retail pursuant to item (5) of this subsection are not subject to tax pursuant to this item. Effective for bills rendered after August 1, 2002, charges for mobile telecommunications services subject to the tax under this item must be sourced in accordance with the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code. The term 'charges for mobile telecommunications services' is defined for purposes of this section the same as it is defined in the Mobile Telecommunications Sourcing Act. All other definitions and provisions of the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code are adopted;"
SECTION 13. Section 12-36-1310(B)(3) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(3) gross proceeds accruing or proceeding from the charges for the ways or means for the transmission of the voice or messages, including the charges for use of equipment furnished by the seller or supplier of the ways or means for the transmission of the voice or messages. Gross proceeds from the sale of prepaid wireless calling arrangements subject to tax at retail pursuant to item (5) of this subsection are not subject to tax pursuant to this item. Effective for bills rendered after August 1, 2002, charges for mobile telecommunications services subject to the tax under this item must be sourced in accordance with the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code. The term "charges for mobile telecommunications services" is defined for purposes of this section the same as it is defined in the Mobile Telecommunications Sourcing Act. All other definitions and provisions of the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code are adopted;"
SECTION 14. Section 12-54-195 of the 1976 Code, as added by Act 89 of 2001, is amended to read:
"Section 12-54-195. (A) As used in this section, 'responsible person' includes any officer, partner, or employee of the taxpayer who has a duty to pay to the department the any state or local sales tax due by the taxpayer or use tax required or authorized to be collected by the retailer pursuant to Chapter 36 of this title or with respect to any local sales and use tax collected by the department on behalf of a political subdivision of the State.
(B) If a retailer adds and collects the a state or local sales tax as permitted by Section 12-36-940, or collects the a state or local use tax from the purchaser as required by Section 12-36-1350, but the retailer fails to remit the tax collected to the department, then any a responsible person may be held liable, individually and personally, for a penalty equal to one hundred percent of the tax collected but not remitted to the department, along with penalties and interest from the date the tax was due. The tax, penalties, and interest is are not collectible from the retailer to the extent the penalty tax, penalties, and interest imposed by this subsection is are collected from a responsible person."
SECTION 15. Section 12-54-240(B) of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding a new item at the end to read:
"(23) disclosure of information to department employees and collection agencies, and the staffs under contract with the department."
SECTION 16. Section 12-6-1130(9) of the 1976 Code is amended to read:
"(9) If for federal income tax purposes a taxpayer claims a credit which requires a reduction of basis to Section 38 property under Internal Revenue Code Section 48(q) or 49(d) 50(c), the taxpayer may deduct the amount of the basis reduction for South Carolina income tax purposes by the amount of the basis reduction in the tax year in which basis is reduced for federal income tax purposes. If a taxpayer makes an election under Internal Revenue Code Section 48(q)(4) to reduce the credit and not the basis, this subitem does not apply."
SECTION 17. Section 12-36-90(2) of the 1976 Code is amended by adding an undesignated subitem at the end to read:
"( ) the purchase price paid by the lessee during or at the end of the term of a consumer automobile lease pursuant to the provisions of the lease, to the extent that the sales tax has already been paid on the lease as provided by this chapter. When the lessee purchases the automobile during or at the end of the term of the lease, sales tax remaining to be paid by the lessee on the purchase price is due and payable at that time."
SECTION 18. Section 12-54-25(C)(3) of the 1976 Code, as amended by Act 399 of 2000, is amended by adding at the end:
"(d) for refunds of overpayments of property taxes due to taxpayer error or as a result of an amended property tax return."
SECTION 19. Section 12-43-220(c)(2)(ii) of the 1976 Code is amended to read:
"(ii) This item does not apply unless the owner of the property or the owner's agent applies for the four percent assessment ratio before the first penalty date for the payment of taxes for the tax year for which the owner first claims eligibility for this assessment ratio. In the application the owner or his agent must certify to the following statement:
"Under penalty of perjury I certify that:
(A) the residence which is the subject of this application is my legal residence and where I am domiciled at the time of this application and that I do not claim to be a legal resident of a jurisdiction other than South Carolina for any purpose; and
(B) that neither I nor any other member of my household is residing in or occupying any other residence in South Carolina which I or any member of my immediate family has qualified for the special assessment ratio allowed by this section."
SECTION 20. A. Chapter 45, Title 12 of the 1976 Code is amended by adding:
"Section 12-45-65. For purposes of collection of taxes on a hotel, rooming house, apartment, or timeshare unit rented or leased as a furnished unit, the estate includes both the real estate and the personal property it contains. The real property tax notice on the estate must describe the real estate, including a tax map number, and the value of the taxable personal property it contains."
B. Section 12-49-40 of the 1976 Code is amended to read:
"Section 12-49-40. (A)All personal property subject to taxation shall be is liable to distress and sale for the payment of taxes, in the manner provided in this title, and all real property returned delinquent by the county treasurer upon which the taxes shall are not be paid by distress or otherwise may be seized and sold as provided in this title. The distress and sale of personal property shall is not be a condition precedent to seizure and sale of any real property under this title.
(B) For purposes of collection and enforcement of taxes on a hotel, rooming house, apartment, or timeshare unit rented or leased as a furnished unit, the estate includes both the real estate and the personal property it contains. The estate may be seized and sold as undivided real property as provided in this title for the sale to collect delinquent taxes on real property."
C. Section 12-51-50 of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:
"Section 12-51-50. The property duly advertised must be sold, by the person officially charged with the collection of delinquent taxes, at public auction at the courthouse or other convenient place within the county, if designated and advertised, on a legal sales date during regular hours for legal tender payable in full by cash, cashier's check, certified check, or money order on the date of the sale. If the defaulting taxpayer or the grantee of record of the property has more than one item advertised to be sold, as soon as sufficient funds have been accrued to cover all of the delinquent taxes, assessments, penalties, and costs, further items may not be sold; except that a hotel, rooming house, apartment, or timeshare unit rented or leased as a furnished unit is deemed to be both the real estate and the personal property it contains. It may be sold as undivided real property."
D. Article 5, Chapter 37, Title 12 of the 1976 Code is amended by adding:
"Section 12-37-805. As an alternative to the procedures provided in Section 12-37-760, if the owner of a hotel, rooming house, apartment, or timeshare unit rented or leased as a furnished unit, in any one year, fails to list personal property required by law to be listed, the auditor may return a statement of the personal property with the value being that of twice the average value of the reported personal property contained within similar units in the county."
SECTION 21. A. Section 12-21-3920(4) and (6) of the 1976 Code are amended to read:
"(4) 'Promoter' means an individual, corporation, partnership, or organization licensed as a professional solicitor by the Secretary of State who is hired by a nonprofit organization to manage, operate, or conduct the licensee's bingo game. The person hired under written contract is considered the promoter.
(6) 'Session' means a consecutive series of games which must occur only between one o'clock p.m. and one o'clock a.m the hours of 12:00 p.m. and 2:00 a.m. No more than one session may occur during the permitted twelve-hour period. These limitations do not apply to games operated by state or county fairs."
B. Section 12-21-3920 is amended by adding at the end:
"(20) 'Electronic dabber' means a hand-held electronic device that allows a player to store, display, and mark a bingo card face. All systems and electronic dabbers must be tested and approved by an independent testing facility to be determined by the department.
(21) 'Electronic dabber bingo ticket' means a perforated two-part ticket bearing a sequential serial ticket number bearing the South Carolina State Seal, denomination, and the department's license number. The ticket must have designated blanks for entry of the date sold and electronic dabber unit supplied. Electronic dabber bingo tickets must be printed and sold only by distributors of bingo paper licensed by the department.
(22) 'Site system' means a computer accounting system commonly referred to as a point of sale system used in conjunction with electronic dabbers. This computer software is used at a site by an organization that allows an electronic dabber bingo ticket purchased from a license distributor to be downloaded to electronic dabbers, accounts for gross proceeds, and provides accounting information on all activity for one year from the end of the quarter in which the activity occurred. All systems and electronic dabbers must be tested and approved by an independent testing facility to be determined by the department."
C. Section 12-21-3950(B) of the 1976 Code is amended to read:
"(B) Upon application for a license, the department has thirty forty-five days to approve or reject the application based on the requirements of this article."
D. Section 12-21-3970 of the 1976 Code is amended to read:
"Section 12-21-3970. For each licensed nonprofit organization the promoter manages, operates, or conducts bingo, the promoter must purchase a promoter's license as provided in Section 12-21-3950 before operating or conducting bingo. No A promoter is not permitted more than five fifteen licenses. This license must be prominently displayed at the location where bingo is conducted."
E. Section 12-21-3990(A)(1), (2), and (4) of the 1976 Code are amended to read:
"(1) Bingo is played by more than one player and a caller who is associated with the house. Each player must pay no more than face value for each card to be played during the course of a game and may purchase the card for a specified number of games. All cards sold for a game must sell for face value and cards may not be given to players as prizes or for free. After the player has purchased a card or cards for a specified number of games, the house cannot require or accept an additional payment or consideration by the player in order to complete the specified number of games.
(2) Before each game begins, the caller shall announce to the players the configuration or configurations that will win the game. A configuration consists of a number of grids covered in the manner announced by the caller. Any method of playing the games is allowed if the method is announced before each game game's beginning including, but not limited to, wild card games. In addition, at the conclusion of each game, the prize, specifically stating the dollar amount or value of merchandise awarded to the winner or winners for the game completed, must be announced before the next game begins.
(4) The caller shall draw and announce numbers from the cage one at a time. If a player has a card with the called number on it, he may use a marker or electronic dabber to cover the square which contains the number. After the number is announced, it must be indicated on the master-board by the caller."
F. Section 12-21-4000(8) of the 1976 Code is amended to read:
"(8) The prize must be awarded to the first person who successfully achieves the winning configuration of covered squares. All winning configurations must be verified using an electronic verifying system and must be displayed on the monitor for all players to see."
G. Section 12-21-4000(12)(b) of the 1976 Code is amended to read:
"(b) A bingo operation may take in only two times more in gross proceeds than the prize for that session averaged on a quarterly basis. Amounts in excess of this limit are subject to a tax, in addition to any other bingo license taxes and fees equal to the amount of the excess. Each session that the gross proceeds are greater than twice the prize amounts paid constitutes a separate offense if the tax is unpaid. These excess proceeds tax must be remitted to the department on the organization's quarterly bingo report and distributed as provided in Section 12-21-4190. Failure to remit this excess proceeds tax to the department shall result in immediate suspension of both the promoter's license and the organization's license. The department, after a conference with the promoter and organization, may permanently revoke the license of the promoter or the nonprofit organization, or both. If permanently revoked, the promoter, nonprofit organization, or any partner or member of the organization may no longer manage, conduct, or assist in any manner with a bingo operation in this State."
H. Section 12-21-4000 of the 1976 Code is amended by adding at the end:
"(15) The house may hold promotions of special events during a session offering players prizes other than from the play of bingo not to exceed one hundred dollars in cash or merchandise for each session. This amount is not to be paid out of the bingo account and is not included in total payouts for a session. There is no additional charge to players to participate in a special promotion. The promotion must not be a form of gambling or a game of chance."
I. Section 12-21-4020(2) and (3) of the 1976 Code are amended to read:
"(2) CLASS B: An organization operating a bingo game offering prizes, which do not exceed eight twelve thousand dollars a session, shall obtain a Class B bingo license at a cost of one thousand dollars. The holder of a Class B license may not conduct more than three six bingo sessions a week.
(3) CLASS C: An organization operating a bingo game and offering prizes of twenty dollars or less a game during a single session shall obtain a Class C bingo license at no cost. However, the organization may offer a prize in cash or merchandise of no more than one hundred fifty dollars for six jackpot games a session. The department, in its discretion, may allow certain Class C licenses to use hard bingo cards in lieu instead of the paper cards required by this article. An organization operating a Class C bingo game must not exceed gross proceeds of one hundred thousand dollars a calendar quarter. If the gross bingo proceeds for any calendar quarter exceed one hundred thousand dollars, the organization is required to notify the department within ten days by making application for a Class G license.
Once the organization exceeds the limit of one hundred thousand dollars, the organization is subject to tax on the dollar face value of each card at the rate of nine and one-half percent. At the time that a Class G license is issued by the department, an audit of the organization must be conducted to determine any tax owed during the interim operating period from the time the limits were exceeded until the time the Class G license was issued by the department.
To qualify to play on hard cards, a bingo game conducted by a Class C license must meet the following criteria:
(a) be operated solely by volunteers;
(b) the person managing, conducting, or operating the bingo game may must not be paid or otherwise be compensated and must be a designated member of the organization;
(c) remuneration, (including wages or other compensation), may must not be made to any individual or corporation;
(d) all equipment used to operate a game of bingo, including chairs, tables, and other equipment, must be owned by the charity;
(e) the organization must may lease the building directly from the owner of the building or own the building in which the game of bingo is played. The organization may not lease or sublease the building from a person who is not the owner;
(f) the only expenses allowed to be paid from the proceeds of the game are utility bills, prizes, purchases of cards, payments for the lease of a building, purchases of equipment required to operate a game of bingo, and the charitable purposes of the organization;
(g) one hundred percent of the net proceeds from the operation of the game must be used for charitable purposes."
J. Section 12-21-4020 of the 1976 Code is amended by adding at the end:
"(7) CLASS G: An organization operating a bingo game and offering prizes of twenty dollars or less a game during a single session and whose gross receipts exceed one hundred thousand dollars a calendar quarter shall obtain a Class G license at a cost of three hundred dollars. However, the organization may offer a prize in cash or merchandise of not more than one hundred fifty dollars for ten jackpot games a session."
K. Section 12-21-4080(A) of the 1976 Code is amended to read:
"(A) Upon completion of the session, the promoter or the organization member representative shall deliver to the representative member of the organization deposit the gross proceeds from the session less the amount paid out as prizes and collected as entrance fees into the bingo checking account. If the promoter is authorized by the organization to make the session deposit, the promoter shall deliver to the organization representative evidence that the deposit was made in a timely manner. This evidence must be furnished no later than the next business day following the day of the bingo session on which the proceeds were obtained."
L. Section 12-21-4090(C) of the 1976 Code is amended to read:
"(C) An organization receiving an annual license to conduct bingo shall establish and maintain one regular checking account designated the 'bingo account' and also may maintain an interest-bearing savings account designated the 'bingo savings account'. All funds derived from the conduct of bingo, less the amount awarded as cash prizes, must be deposited in the bingo account. No Other funds may not be deposited in the bingo account, unless there is a deficit, and then both the organization and promoter shall deposit a loan equal to fifty percent of the deficit. Each loan deposited into the bingo checking account must be accounted for on the quarterly financial reports filed with the department. Detailed information substantiating these loans must be maintained by the organization. Deposits must be made no later than the next business day following the day of the bingo occasion on which the receipts were obtained. All accounts must be maintained in a financial institution in this State."
M. Section 12-21-4120 of the 1976 Code is amended to read:
"Section 12-21-4120. A person who is found in violation of the provisions of this article and assessed additional taxes, penalties, fines, or interest is entitled to a conference upon request. Any organization or promoter seeking clarification on the play of or operation of a bingo game shall submit to the department's bingo regulatory section a written request seeking a determination as to whether or not a certain or specific action constitutes a violation. A conference may be requested upon the receipt of the clarification request. Any organization or promoter found in violation of the provisions of this article and assessed additional taxes, penalties, fines, or interest is entitled to a conference upon request."
N. Section 12-21-4150 of the 1976 Code is amended to read:
"Section 12-21-4150. A person who poses as a bingo player, or a person who conspires to have a person pose as a bingo player with the intent to defraud regular customers of the game, or a person who is using unauthorized bingo supplies, or a person using counterfeit electronic dabber bingo tickets is guilty of a felony and, upon conviction, must be imprisoned not more than five years or fined not more than five thousand dollars, or both."
O. Section 12-21-4190(A) of the 1976 Code is amended to read:
(A) The department shall charge and retain sixteen and one-half cents for each dollar of face value for each bingo card sold for AA, B, D, and E licenses. The department shall charge and retain five cents for each dollar of face value for each bingo card sold to an F license. There shall be no charge for a C license. There is a charge of nine and one-half cents for each dollar of face value for each bingo card sold to a G license. For any holder of a Class G license that is charged nine and one-half cents for each dollar of face value for each bingo card sold, a distribution in the amount of four and twenty-nine hundredths percent of total face value of bingo cards purchased must be distributed back to the sponsoring organization for which the bingo cards were purchased."
P. Section 12-21-4210 of the 1976 Code is amended to read:
"Section 12-21-4210. Bingo cards may not be sold or transferred between licensed organizations, between distributors, or between manufacturers. All unused bingo cards may be returned to the department for refund and destruction. For any Class C paper in inventory at the time that the organization applies for a Class G license and begins to pay tax, a department agent shall inventory any untaxed paper and conduct an examination of books and records from the point of time that the game exceeded one hundred thousand dollars and an assessment must be issued on the dollar face value of each card and the tax must be paid within fifteen days from the date of the assessment. The department is required to refund only the amount retained by the department previously based on the face value of each card and does not include the manufacturer's price or transportation charges to the consignee at destination and such additional charges. If an organization operating a bingo game ceases operation within fifteen days from the purchase of the last voucher and the voucher remains outstanding, the department shall accept the returned paper and credit the value of returned paper against the outstanding voucher. The organization then shall pay the balance of the voucher less the value of returned paper."
Q. Section 12-21-4270 of the 1976 Code is amended to read:
"Section 12-21-4270. Each licensed nonprofit organization or promoter, in the name of a licensed organization, may obtain bingo cards approved by the department by making application and remitting sixteen and one-half percent of the total face value of the cards to be purchased. Payment to the State for the issuance of bingo cards must be made by check, certified check, any electronic method, or cash within fifteen days of receipt of the application. If payment is made by check and the check is returned by the bank for any reason, the organization or promoter then is required to make payment to the department by certified funds for the remainder of the time that the bingo session is in operation. Upon receipt of the application, the department shall notify a licensed distributor, who has purchased bingo cards from a licensed manufacturer that the licensed distributor may release the face value of the bingo cards requested to the licensed organization or promoter. However, no additional bingo cards must be released until payment is received for the prior application of bingo cards. The department is required to set forth procedures to ensure that there is a crosscheck between manufacturers, distributors, and licensed nonprofit organizations or promoters. A quarterly return is required by each manufacturer, distributor, and licensed nonprofit organization or promoter on or before the last day of the month following the close of the calendar quarter, outlining those items the department determines necessary to verify the sale and distribution of bingo cards. The sale of bingo cards and entrance fees provided by Section 12-21-4030 are not subject to the admissions tax provided by Section 12-21-2420."
R. The 1976 Code is amended by adding:
"Section 12-21-4005. (A) A site system and an electronic bingo dabber must meet the following specifications:
(1) A site system must:
(a) record a nonresetable electronic consecutive six digit receipt number for each transaction;
(b) issue a player a receipt for each transaction containing:
(i) name of a site or organization;
(ii) date and time of the transaction;
(iii) number of electronic bingo card images downloaded;
(iv) selling price of a card or package, gross proceeds, and receipt number; and
(v) serial number of device issued to a player;
(c) print a summary report for each session containing:
(i) date and time of the report;
(ii) name of site;
(iii) date of the session;
(iv) sequential session number;
(v) number of transactions;
(vi) number of voided transactions;
(vii) number of electronic bingo card images downloaded;
(viii) number of devices used;
(ix) total gross proceeds; and
(x) any other information required by the department.
(2) An electronic dabber:
(a) must be a portable hand-held unit and may not be wired directly to a site system;
(b) may not have more than one hundred forty-four faces to be played each game when used in a Class B game and not more than two hundred eighty-eight faces to be played each game when used in a Class AA game;
(c) must require a player to manually enter each bingo number called by using an input function key;
(d) shall display a player's best card or a winning card and alert only that player through an audio or video method, or both, of that result;
(e) must automatically erase all stored cards at the end of the last game of a session or when the device is turned off; and
(f) must be downloaded with new cards at the beginning of each session.
(B) The department's representative may examine and inspect a site system, electronic bingo dabber, and related equipment. The examination and inspection must include immediate access to the electronic dabber and unlimited inspection of all parts, equipment, and associated systems.
(C) A player may exchange a defective electronic dabber for another provided a disinterested player verifies that the electronic dabber is not functioning. A disinterested player also shall verify that no numbers called for the game in progress have been keyed into the replacement electronic dabber before the exchange.
(D) Before a player uses an electronic dabber, he must purchase an electronic dabber bingo ticket from the house which entitles the player to mark his cards electronically rather than using paper cards and marking them manually.
(E) The electronic dabber ticket as defined in Section 12-21-3920(22) is perforated and allows both the player and the house to retain a copy. The ticket must be sold at face value. The cards must be purchased on a bingo voucher only from a distributor licensed in this State.
(F) After completion of each session, the organization shall generate an activity report containing the number of electronic dabbers used in the session along with the house receipts for each electronic dabber bingo tickets sold. This report must be printed and maintained with the daily reports of the bingo session held."
S. Notwithstanding the general effective date provided in this act, this section takes effect October 1, 2002.
SECTION 22. This act takes effect upon approval by the Governor.
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