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R401, H3065
STATUS INFORMATION
General Bill
Sponsors: Rep. Kirsh
Document Path: l:\council\bills\ggs\22669htc03.doc
Introduced in the House on January 14, 2003
Introduced in the Senate on April 15, 2003
Last Amended on June 3, 2004
Passed by the General Assembly on June 3, 2004
Governor's Action: December 17, 2004, Vetoed
Legislative veto action(s): Veto sustained
Summary: Overdue Tax Debit Collection Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
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12/4/2002 House Prefiled
12/4/2002 House Referred to Committee on Ways and Means
1/14/2003 House Introduced and read first time HJ-32
1/14/2003 House Referred to Committee on Ways and Means HJ-32
4/9/2003 House Committee report: Favorable with amendment Ways and
Means HJ-17
4/10/2003 House Amended HJ-34
4/10/2003 House Read second time HJ-35
4/10/2003 House Unanimous consent for third reading on next legislative
day HJ-35
4/11/2003 House Read third time and sent to Senate HJ-5
4/14/2003 Scrivener's error corrected
4/15/2003 Senate Introduced and read first time SJ-48
4/15/2003 Senate Referred to Committee on Finance SJ-48
3/10/2004 Senate Committee report: Favorable with amendment Finance SJ-14
3/11/2004 Senate Amended SJ-22
3/11/2004 Senate Read second time SJ-22
6/2/2004 Senate Amended SJ-78
6/2/2004 Senate Read third time and returned to House with amendments
SJ-78
6/3/2004 House Senate amendment amended HJ-22
6/3/2004 House Debate adjourned HJ-43
6/3/2004 House Returned to Senate with amendments HJ-56
6/3/2004 House Reconsider vote whereby amendments 2A and 5A
adopted--then both amendments tabled HJ-60
6/3/2004 House Concurred in Senate amendment and enrolled HJ-60
6/3/2004 Ratified R 401
12/17/2004 Vetoed by Governor
1/12/2005 House Veto sustained Yeas-33 Nays-76 HJ-56
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
12/4/2002
4/9/2003
4/10/2003
4/14/2003
3/10/2004
3/11/2004
6/2/2004
NOTE: THIS COPY IS A TEMPORARY VERSION. THIS DOCUMENT WILL REMAIN IN THIS VERSION UNTIL PUBLISHED IN THE ADVANCE SHEETS TO THE ACTS AND JOINT RESOLUTIONS. WHEN THIS DOCUMENT IS PUBLISHED IN THE ADVANCE SHEET, THIS NOTE WILL BE REMOVED.
(R401, H3065)
AN ACT TO AMEND SECTION 4-29-67, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE FEE IN LIEU OF PROPERTY TAX, SO AS TO DELETE THE NET PERCENT VALUE METHOD OF CALCULATING ANNUAL FEE PAYMENTS; TO AMEND SECTION 12-6-2220, RELATING TO ALLOCATION AND APPORTIONMENT FOR PURPOSES OF THE STATE INCOME TAX, SO AS TO PROVIDE FOR THE ALLOCATION OF DIVIDENDS; TO AMEND SECTION 12-6-3365, AS AMENDED, RELATING TO THE CORPORATE INCOME TAX MORATORIUM FOR JOB CREATION, SO AS TO CLARIFY THE APPLICATION OF THE MORATORIUM TO INSURANCE PREMIUM TAXES; TO AMEND SECTION 12-6-3480, RELATING TO TAX CREDITS, SO AS TO FURTHER PROVIDE THE MANNER IN WHICH CREDITS ARE ALLOWED AND MAY BE CLAIMED; TO AMEND SECTIONS 12-6-5020, AS AMENDED, AND 12-6-5030, RELATING TO THE FILING OF CONSOLIDATED CORPORATE INCOME TAX RETURNS AND COMPOSITE INDIVIDUAL INCOME TAX RETURNS, SO AS TO REQUIRE THE DETERMINATION OF CREDITS ON A CONSOLIDATED BASIS AND FURTHER PROVIDE FOR COMPOSITE RETURNS; TO AMEND SECTION 12-8-1520, RELATING TO STATE INCOME TAX WITHHOLDING, SO AS TO PROVIDE ADDITIONAL REQUIREMENTS FOR WITHHOLDING AGENTS; TO AMEND SECTION 12-10-105, RELATING TO ANNUAL FEES FOR JOB DEVELOPMENT CREDITS FOR PURPOSES OF THE ENTERPRISE ZONE ACT OF 1995, SO AS TO EXTEND THESE FEES TO JOB RETRAINING CREDITS IN EXCESS OF TEN THOUSAND DOLLARS AND PROVIDE FOR THE COLLECTION OF THESE FEES; TO AMEND SECTION 12-20-105, AS AMENDED, RELATING TO TAX CREDITS FOR PURPOSES OF THE CORPORATE LICENSE TAX, SO AS TO CLARIFY THE APPLICATION OF THESE CREDITS; TO AMEND SECTION 12-28-740, RELATING TO EXEMPTIONS FROM THE MOTOR FUELS USER FEE, SO AS TO DELETE A REFERENCE TO A CREDIT, BY ADDING SECTION 12-28-1400, SO AS TO REQUIRE SUCH REPORTING AS THE DEPARTMENT OF REVENUE MAY REQUIRE BY REGULATION FOR PURPOSES OF THE USER FEE ON MOTOR FUELS AND PROVIDE AN ADDITIONAL CIVIL PENALTY FOR VIOLATORS; TO AMEND SECTION 12-28-1730, AS AMENDED, RELATING TO PENALTIES FOR PURPOSES OF THE MOTOR FUELS TAX, SO AS TO DELETE A CIVIL PENALTY; TO AMEND SECTION 12-36-2510, RELATING TO THE SOUTH CAROLINA SALES AND USE TAX ACT, SO AS TO PROVIDE FURTHER FOR THE ISSUE OF CERTIFICATES BY THE DEPARTMENT OF REVENUE FOR DIRECT PAY AND EXEMPTIONS AND PROVIDE FOR MORE EFFICIENT ADMINISTRATION OF SALES TAXES AND SALES TAX EXEMPTIONS; TO REPEAL SECTION 12-37-290, RELATING TO AN OBSOLETE HOMESTEAD EXEMPTION PROVISION; TO AMEND SECTION 12-44-50, AS AMENDED, RELATING TO THE "FEE IN LIEU OF TAX SIMPLIFICATION ACT OF 1997", SO AS TO REVISE THE ELIGIBILITY TO USE THE NET PERCENT VALUE METHOD OF CALCULATING THE ANNUAL FEE PAYMENT, TO AMEND SECTIONS 12-54-42 AND 12-54-43, AS AMENDED, RELATING TO THE UNIFORM METHOD OF COLLECTION AND ENFORCEMENT OF STATE LEVIED TAXES, SO AS TO CLARIFY THE APPLICATION OF PENALTIES FOR FAILING TO PROVIDE WITHHOLDING STATEMENTS, AND CLARIFY AND REVISE THE APPLICATION OF CIVIL PENALTIES FOR FILING GROUNDLESS RETURNS OR FOR MISUSE OF A SALES TAX CERTIFICATE; BY ADDING SECTION 12-54-123 SO AS TO PROTECT FROM LIABILITY A PERSON WHO SURRENDERS THE PROPERTY OF ANOTHER LEVIED ON BY THE DEPARTMENT OF REVENUE; TO AMEND SECTIONS 12-54-210 AND 12-54-240, AS AMENDED, RELATING TO THE COLLECTION AND ENFORCEMENT OF STATE TAXES, SO AS TO INCREASE THE PENALTY FOR FAILURE TO KEEP RECORDS, FILE RETURNS, AND COMPLY WITH REGULATIONS, UPDATE REFERENCES RELATING TO THE CONFIDENTIALITY OF RETURNS, AND DELETE AN EXEMPTION TO THE CONFIDENTIALITY REQUIREMENTS FOR RECORDS SUBPOENAED BY A FEDERAL GRAND JURY; TO AMEND SECTIONS 12-60-420 AND 12-60-490, BOTH AS AMENDED, RELATING TO THE REVENUES PROCEDURE ACT, SO AS TO PROVIDE THAT THE APPLICATION OF A DIVISION DECISION OR A DETERMINATION OF DEFICIENCY APPLIES TO LOCAL TAXES ADMINISTERED BY THE DEPARTMENT OF REVENUE AND REQUIRE SUCH NOTICE TO PROVIDE THAT FAILURE TO FILE A PROTEST WILL RESULT IN A DECISION BECOMING FINAL AND TO PROVIDE FURTHER FOR SETOFFS AGAINST TAX REFUNDS; TO AMEND SECTION 61-4-720, AS AMENDED, RELATING TO THE REGULATION OF WINE, SO AS TO REPLACE THE LIMITATION TO DOMESTIC WINE WITH WINE PRODUCED ON THE PREMISES WITH A MAJORITY OF THE JUICE FROM FRUIT OR BERRIES GROWN IN THIS STATE FOR WINE SALES AND TASTINGS AT LICENSED WINERIES IN THIS STATE; BY ADDING SECTION 61-4-725 SO AS TO ALLOW A LICENSED WINERY TO SELL, DELIVER, AND PERMIT ON-PREMISES CONSUMPTION ON SUNDAYS IN JURISDICTIONS WHERE MINIBOTTLE SALES ARE ALLOWED ON SUNDAYS; TO AMEND SECTIONS 61-4-730 AND 61-4-747, RELATING TO REGULATION OF WINE, SO AS TO REPLACE THE REQUIREMENT THAT PERMITTED WINERIES SELL ONLY DOMESTIC WINE WITH WINE PRODUCED ON THE PREMISES WITH A MAJORITY OF THE JUICE FROM FRUIT OR BERRIES GROWN IN THIS STATE IN ORDER TO SELL AND DELIVER WINE IN THIS STATE AND TO REQUIRE OUT-OF-STATE WINE SHIPPERS TO PAY SALES AND EXCISE TAXES ON WINE SHIPPED TO RESIDENTS OF THIS STATE BY JANUARY TWENTIETH OF EACH YEAR FOR THE PRECEDING YEAR, BY ADDING SECTION 12-21-1085, SO AS TO PROVIDE THOSE TAXES ALLOWED ON BEER AND WINE, BY ADDING 61-6-1555, SO AS TO ALLOW AN AIRLINE COMPANY TO PURCHASE BEER, WINE, AND ALCOHOLIC LIQUOR DIRECTLY FROM A LICENSED WHOLESALER, TO PROVIDE THAT THE WHOLESALER MAY SELL AND DELIVER THE BEER, WINE, AND ALCOHOLIC LIQUOR TO AN AIRLINE COMPANY, AND TO PROVIDE A PENALTY IF A PERSON USES BEER, WINE, OR ALCOHOLIC LIQUOR PURCHASED PURSUANT TO THIS SECTION FOR ANOTHER PURPOSE OTHER THAN THE SALE OR USE BY THE AIRLINE COMPANY, TO AMEND SECTION 12-6-3360, AS AMENDED, RELATING TO THE TARGETED JOBS TAX CREDIT, SO AS TO REVISE THE DEFINITION OF "NEW JOB", TO AMEND SECTIONS 12-6-40 AND 12-6-50, BOTH AS AMENDED, RELATING TO DEFINITIONS AND CONFORMITY PROVISIONS FOR PURPOSES OF THE SOUTH CAROLINA INCOME TAX ACT, SO AS TO UPDATE THE REFERENCE DATE BY WHICH THIS STATE ADOPTS VARIOUS PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986 AND CLARIFY THOSE PROVISIONS NOT ADOPTED, TO AMEND TITLE 12 BY ADDING CHAPTER 55 ENACTING THE OVERDUE DEBT COLLECTION ACT AUTHORIZING THE SOUTH CAROLINA DEPARTMENT OF REVENUE TO IMPOSE A COLLECTION ASSISTANCE FEE ON CERTAIN OVERDUE TAX DEBTS EQUAL TO TWENTY PERCENT OF THE OVERDUE AMOUNT AND TO ALLOW THE DEPARTMENT TO RETAIN A PORTION OF THE COLLECTION ASSISTANCE FEE FOR ITS OPERATION, TO AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO SALES AND USE TAX EXEMPTIONS, SO AS TO EXEMPT PRESCRIPTIONS AND OVER-THE-COUNTER MEDICINES AND MEDICAL SUPPLIES SOLD TO A FREE CLINIC, BY ADDING SECTION 12-37-223 SO AS TO EXEMPT FROM PROPERTY TAX A SUFFICIENT AMOUNT OF THE FAIR MARKET VALUE OF REAL PROPERTY TO LIMIT TO TWENTY PERCENT INCREASES IN FAIR MARKET VALUE OF SUCH PROPERTY ATTRIBUTABLE TO REASSESSMENT PROGRAMS AND PROVIDE THE MANNER IN WHICH THIS EXEMPTION APPLIES AND ITS DURATION, TO REPEAL SECTION 12-37-223A, RELATING TO A COUNTY OPTION PROPERTY TAX EXEMPTION LIMITING TO FIFTEEN PERCENT INCREASES IN FAIR MARKET VALUE OF REAL PROPERTY AS A RESULT OF REASSESSMENT, BY ADDING SECTION 12-37-130, SO AS TO ESTABLISH A TASK FORCE TO STUDY THE IMPACT OF THIS NEW EXEMPTION ON HOMEOWNERS AND THE REAL ESTATE INDUSTRY, AND TO AMEND SECTION 6-1-320, AS AMENDED, RELATING TO LIMITS ON PROPERTY TAX MILLAGE INCREASES, SO AS TO CLARIFY THE CALCULATION OF THE INCREASED MILLAGE ALLOWED PURSUANT TO INCREASES IN THE CONSUMER PRICE INDEX.
Be it enacted by the General Assembly of the State of South Carolina:
Fee in lieu of taxes
SECTION 1. A. Section 4-29-67(D)(2)(b) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(b) for an investment exceeding one hundred million dollars an annual payment based on an alternative arrangement yielding a net present value of the sum of the fees for the life of the agreement not less than the net present value of the fee schedule as calculated pursuant to subsection (D)(2)(a). Net present value calculations performed pursuant to this subsection must use a discount rate equivalent to the yield in effect for new or existing United States Treasury bonds of similar maturity as published during the month in which the inducement agreement is executed. If no yield is available for the month in which the inducement agreement is executed, the last published yield for the appropriate maturity must be used. If there are no bonds of appropriate maturity available, bonds of different maturities may be averaged to obtain the appropriate maturity; or."
B. Section 4-29-67(F)(2)(b) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(b) the new replacement property that qualifies for the fee provided in subsection (D)(2) is recorded using its income tax basis, and the fee is calculated using the millage rate and assessment ratio provided on the original fee property. The fee payment for replacement property must be based on subsection (D)(2)(a) or (c) if the sponsor originally used that method, without regard to present value."
C. Notwithstanding the general effective date of this act, this section takes effect upon approval of this act by the Governor, and except where otherwise specifically provided, applies for fee agreements entered into after September 30, 2004.
Dividends allocation
SECTION 2. A. Section 12-6-2220(2) of the 1976 Code is amended to read:
"(2) Dividends received from corporate stocks not connected with the taxpayer's business, less all related expenses, are allocated to the state of the corporation's principal place of business as defined in Section 12-6-30(9) or the domicile of an individual taxpayer."
B. Section 12-6-2220(2) of the 1976 Code, as amended by this section, applies for taxable years beginning after 2003.
Jobs tax credit
SECTION 3. A. Section 12-6-3365(A) of the 1976 Code, as last amended by Act 172 of 2004, is further amended to read:
"(A) A taxpayer creating and maintaining at least one hundred full-time new jobs, as defined in Section 12-6-3360(M), at a facility of a type identified in Section 12-6-3360(M) may petition, utilizing the procedure in Section 12-6-2320(B), for a moratorium on state corporate income taxes imposed pursuant to Section 12-6-530 or insurance premium taxes imposed pursuant to Title 38 for the ten taxable years beginning the first full taxable year after the taxpayer qualifies and ending either ten years from that year or the year when the taxpayer's number of full-time new jobs falls below one hundred, whichever is earlier. For purposes of insurance premium taxes, the petition pursuant to Section 12-6-2320(B) must be made to and approved by the director of the Department of Insurance."
B. The amendment to Section 12-6-3365 of the 1976 Code in this section does not affect its repeal as provided in Section 3 of Act 277 of 2000.
Applying tax credits
SECTION 4. A. Section 12-6-3480 of the 1976 Code is amended to read:
"Section 12-6-3480. Notwithstanding any other provision of law:
(1) Any credits under Title 38 may be applied against any taxes imposed under this chapter or license fees imposed under Chapter 20 of this title.
(2) Any credits under this chapter or Chapter 14 of this title which are earned by a corporation included in a consolidated corporate income tax return under Section 12-6-5020 must be used and applied against the consolidated tax, unless otherwise specifically provided.
(3) Any limitations upon the amount of liability for taxes or license fees that can be reduced by the use of a credit must be computed one credit at a time before another credit is used to reduce any remaining tax or license fee liability under this chapter or Chapter 20 of this title. The taxpayer may apply any credits arising under this chapter or Chapter 14 of this title in any order the taxpayer elects, and may apply a credit that is allowed for use against both taxes and license fees in any order, unless otherwise specifically provided, and against either one or both taxes and license fees in any given year, subject to specific limitations in the applicable credit statute and this item.
(4) No credit amount may be used more than once. Unless otherwise provided by law, a tax credit administered by the department must be used to the extent possible in the year it is generated and cannot be refunded.
(5) As used in this section, the term 'tax credit' or 'credit' means a statutorily directed or authorized reduction in the tax liability made after any applicable tax rates are applied."
B. Section 12-6-3480 of the 1976 Code, as amended by this section, applies for taxable years beginning after 2003.
Consolidated returns
SECTION 5. A. Section 12-6-5020(F) of the 1976 Code is amended to read:
"(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 must 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 or of the consolidated group."
B. Section 12-6-5020(F), as amended by this section, applies for taxable years beginning after 2003.
Composite returns
SECTION 6. A. Section 12-6-5030 of the 1976 Code is amended to read:
"Section 12-6-5030. (A) A partnership or 'S' Corporation may file a composite individual income tax return on behalf of the nonresident partners or shareholders that are individuals, trusts, or estates in which the income is taxed to the trust or estate, or the department may require that a partnership or 'S' Corporation file a composite individual income tax return on behalf of the nonresident partners or shareholders that are individuals, or trusts, and estates in which the income is taxed to the trust or estate.
(B)(1) A composite return is a single return for two or more taxpayers having the same tax year in which each participant's share of the partnerships or 'S' Corporation's taxable income or loss is separately computed and added together to arrive at the total tax due on the composite return. The partnership or 'S' Corporation may elect to determine each participant's tax due by one of the following methods:
(a) compute the pro rata share of the standard deduction or itemized deductions, and personal exemption amount for each participant pursuant to Section 12-6-1720(2) in the same manner as if it was being separately reported; or
(b) compute each participant's share of South Carolina income without regard to any deductions or exemptions.
(2) The composite return is signed by a general partner or an authorized officer of the 'S' Corporation.
(C)(1) A composite return may be filed even if some of the nonresident fiduciary and individual shareholders and partners eligible to participate in filing a composite return choose not to participate. Corporate taxpayers may not participate in a composite return.
(2) A nonresident participating in the composite return that has South Carolina income from sources other than the entity filing the composite return is required to file appropriate returns and make payment of all South Carolina taxes required by law. Taxes paid for the nonresident with the composite return shall reduce taxes due at the time the nonresident subject to this subitem files a separate return for the tax year reporting South Carolina income from all sources. The entity shall furnish to each nonresident a written statement as required by Section 12-8-1540(A) as proof of the amount that has been paid by the partnership or 'S' corporation as estimated payments for the nonresident and the amount paid for the nonresident with the composite return.
(D) The department may establish procedures or rules and promulgate regulations necessary to carry out the provisions of this section."
B. Section 12-6-5030 of the 1976 Code, as amended by this section, applies for taxable years beginning after 2003.
Withholding agents
SECTION 7. A. Section 12-8-1520(A)(2) of the 1976 Code is amended to read:
"(2) If a resident withholding agent is required under the Internal Revenue Code to deposit withheld funds at a financial institution, then the withholding agent shall deposit the funds required to be withheld under this chapter at a financial institution selected by the State Treasurer, unless otherwise instructed by the department."
B. Section 12-8-1520 of the 1976 Code is amended by adding at the end:
"(D) Any withholding agent making at least twenty-four payments in a year must do so as provided in Section 12-54-250."
C. Section 12-8-1520(A)(2) of the 1976 Code, as amended in subsection A of this section, takes effect July 1, 2004. The amendment to Section 12-8-1520 in the 1976 Code in subsection (B) of this section applies for payments due after January 1, 2005.
Job development credits
SECTION 8. Section 12-10-105 of the 1976 Code, as added by Act 334 of 2002, is amended to read:
"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 claiming in excess of ten thousand dollars of job development credits or in excess of ten thousand dollars in job retraining credits in one calendar year. The fee is due for each project that is subject to a revitalization or retraining agreement that exceeds ten thousand dollars in one calendar year and must be remitted to the Department of Revenue to be used to reimburse the department for costs incurred auditing reports required pursuant to Section 12-10-80(A). The fee becomes due at the time the single project's claims for job development credits or job-retraining credits exceeds ten thousand dollars for that calendar year."
Infrastructure credits
SECTION 9. A. Subsections (B)(1) and (C) of Section 12-20-105 of the 1976 Code, as last amended by Act 69 of 2003, are further amended to read:
"(1) To be considered an eligible project for purposes of this section, the project must qualify for income tax credits under Chapter 6 of Title 12, withholding tax credit under Chapter 10 of Title 12, income tax credits under Chapter 14 of Title 12, or fees in lieu of property taxes under either Chapter 12 of Title 4, Chapter 29 of Title 4, or Chapter 44 of Title 12.
(C) For the purpose of this section, 'infrastructure' means improvements for water, sewer, gas, steam, electric energy, and communication services made to a building or land that are considered necessary, suitable, or useful to an eligible project. These improvements include, but are not limited to:
(1) improvements to public water and sewer systems;
(2) improvements to public electric, natural gas, and telecommunications systems including, but not limited to, ones owned or leased by an electric cooperative, electric utility, or electric supplier, as defined in Chapter 27, Title 58;
(3) fixed transportation facilities including highway, road, rail, water, and air;
(4) for a qualifying project under subsection (B)(2), infrastructure improvements include industrial shell buildings and the purchase of land for an office, business, commercial, or industrial park which is owned or constructed by a county or political subdivision of this State."
B. Subsections (B)(1) and (C) of Section 12-20-105 of the 1976 Code, as amended by this section, apply for taxable years beginning after 2003.
Motor fuel user fee
SECTION 10. Section 12-28-740(3)(b) of the 1976 Code is amended to read:
"(b) by application for a refund, if the purchase is charged to a credit card issued to an eligible government entity, the issuer of the card elects to be the ultimate vendor, and the federal agency is billed without the user fee;"
Motor fuel user fee
SECTION 11. Article 13, Chapter 28, Title 12 of the 1976 Code is amended by adding:
"Section 12-28-1400. (A) All information required to be reported in this chapter must be used in the tracking of petroleum products and must be submitted in the manner prescribed by the department by regulation. The regulation must include, but not be limited to, the data elements, the format of the data elements, and the method and medium of transmission to the department.
(B) A person liable for reporting under this chapter who fails to meet the requirements of this section within three months after notification of the failure by the department, in addition to all other penalties prescribed by this chapter, is subject to an additional penalty of five thousand dollars for each month the failure continues."
Motor fuel user fee, penalties
SECTION 12. Subsections (C) and (F) of Section 12-28-1730 of the 1976 Code are amended to read:
"(C) Reserved.
(F) The department shall impose a civil penalty in the amount of one thousand dollars or ten dollars for each gallon of dyed fuel involved, whichever is greater, on the operator of a vehicle that is used on the highways of this State, or is authorized or otherwise allowed to be used on the highways of this State, and who uses dyed fuel for the propulsion of that vehicle or who stores dyed fuel to be used for the propulsion of a vehicle on the highways of this State, regardless of whether any of such dyed fuel is used for a nontaxable purpose, unless permitted to do so under federal law.
For purposes of this section, the operator is the person responsible for the management and operation of the vehicle, whether as owner, lessee, or other party."
Sales tax, direct pay, certificates
SECTION 13. A. Section 12-36-2510 of the 1976 Code is amended to read:
"Section 12-36-2510. (A)(1) Notwithstanding other provisions of this chapter, the department, at its discretion, may issue or authorize for the efficient administration of the sales and use tax law any type of certificate allowing a taxpayer to purchase tangible personal property tax free and be liable for any taxes.
(2) In addition to any other type of certificate the department considers necessary to issue, the department may issue at its discretion:
(a) Direct Pay Certificate: a direct pay certificate allows its holder to make all purchases tax free and to report and pay directly to the department any taxes due. The holder of a direct pay certificate is liable for any taxes due. If an exemption or exclusion is not applicable, the tax is due upon the withdrawal, use, or consumption of the tangible personal property purchased with the certificate.
(b) Exemption Certificate: an exemption certificate, as opposed to allowing its holder to make all purchases tax free, allows its holder to make only certain purchases tax free such as machinery, electricity, or raw materials. The holder of an exemption certificate is liable for any taxes due. If an exemption or exclusion is not applicable, the tax is due upon purchase, or upon the withdrawal, use, or consumption of the tangible personal property purchased with the certificate if the application of the exemption or exclusion cannot be determined at the time of purchase.
(B) To reduce the complexity and administrative burden of transactions exempt from sales or use tax, the following provisions must be followed when a purchaser claims an exemption by use of an exemption certificate:
(1) the seller shall obtain at the time of the purchase any information determined necessary by the department, including the reason the purchaser is claiming a tax exemption or exclusion;
(2) the department, at its discretion, may utilize a system where the purchaser exempt from the payment of the tax is issued an identification number which must be presented to the seller at the time of the sale;
(3) the seller shall maintain proper records of exempt or excluded transactions and provide them to the department when requested and in the form requested by the department.
(C) A seller that complies with the provisions of this section is relieved from any tax otherwise applicable if it is determined that the purchaser improperly claimed an exemption or exclusion by use of a certificate, provided the seller fraudulently did not fail to collect or remit the tax, or both, or solicit a purchaser to participate in an unlawful claim of an exemption. The liability for any tax shifts to the purchaser who improperly claimed the exemption or exclusion by use of the certificate."
B. This section takes effect October 1, 2004.
Obsolete exemption repealed
SECTION 14. Section 12-37-290 of the 1976 Code is repealed.
Fee in lieu of taxes
SECTION 15. A. Section 12-44-50(A)(3) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(3) If the project subject to the fee agreement involves an investment of at least one hundred million dollars, the county and the sponsor may agree to pay the fees established in subsection (A)(1) based on an alternative payment method yielding a net present value of the fee schedule as calculated in subsection (A)(1) provided the sponsor agrees to a millage rate as established in subsection (A)(1)(b)(i). Net present value calculations must use a discount rate equivalent to the yield in effect for new or existing United States Treasury bonds of similar maturity as published during the month in which the fee agreement is executed. If no yield is available for the month in which the fee agreement is executed, the last published yield for the appropriate maturity available must be used. If there are no bonds of appropriate maturity available, bonds of different maturities may be averaged to obtain the appropriate maturity."
B. Notwithstanding the general effective date of this act, this section takes effect upon approval of this act by the Governor and except where otherwise specifically provided, applies for fee agreements entered into after September 30, 2004.
Withholding enforcement
SECTION 16. A. Subsections (a) and (b) of Section 12-54-42 of the 1976 Code are amended to read:
"(a) A person who fails to comply with the provisions of Section 12-8-1540, requiring the furnishing of a withholding statement to employees is subject to a penalty of not less than one hundred dollars nor more than one thousand dollars for each violation.
(b) A person who fails to comply with the provisions of Section 12-8-540(A)(1), requiring the filing of withholding statements with the department is subject to a penalty of not less than one hundred dollars nor more than two thousand dollars for each violation."
B. This section takes effect July 1, 2004.
Frivolous protests, misuse of certificates
SECTION 17. A. Section 12-54-43(I) of the 1976 Code is amended to read:
"(I) A person:
(1)(a) who files what purports to be a return of the tax imposed by a provision of law administered by the department but which:
(i) does not contain information on which the substantial correctness of the tax liability may be judged; or
(ii) contains information that on its face indicates the liability is substantially incorrect; or
(b) who files a claim, a protest, or document, other than a return, that contains information that on its face indicates its position is substantially incorrect; and
(2) whose conduct is due to:
(a) a position which is frivolous or groundless; or
(b) a desire, which appears on the purported return, claim, protest, or document, to delay or impede the administration of state tax laws;
(3) is liable to a penalty of five hundred dollars for the first filing, twenty-five hundred dollars for the second filing, and five thousand dollars for each subsequent filing. These penalties are in addition to all other penalties provided by law."
B. Section 12-54-43 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:
"( ) If a purchaser uses a resale, wholesale, or an exemption certificate issued or authorized by the department to purchase tangible personal property tax free which the purchaser knows is not excluded or exempt from the tax under the provisions of Chapter 36 of this title, then the purchaser, in addition to any other penalties due under this title, is liable for a penalty of five percent of the amount of the tax if the failure is for not more than one month, with an additional five percent for each additional month or fraction of the month during which the failure continues, not exceeding fifty percent in the aggregate. The provisions of this section do not apply to direct pay certificates."
C. Section 12-54-43(I) of the 1976 Code, as amended by subsection A. of this section, takes effect October 1, 2004. Section 12-54-43 of the 1976 Code, as amended by subsection B. of this section, takes effect July 1, 2004.
Liability limited
SECTION 18. A. Chapter 54, Title 12 of the 1976 Code is amended by adding:
"Section 12-54-123. A person in possession of property upon which a levy has been made who, upon demand by the department, surrenders the property to the department must not be held personally liable for any obligation or liability to the taxpayer and any other person with respect to the property that arises from the surrender or payment. If a person brings an action not allowed pursuant to this section in any court of this State, the court shall dismiss the case."
B. This section takes effect July 1, 2004.
Penalty increased
SECTION 19. A. Section 12-54-210(A) of the 1976 Code is amended to read:
"(A) A person liable for a tax, license, fee, or surcharge administered by the department or for the filing of a return with the department, including information returns shall keep books, papers, memoranda, records, render statements, make returns, and comply with regulations as the department prescribes. Persons failing to comply with the provisions of this section must be penalized in an amount to be assessed by the department not to exceed one thousand dollars for the period covered by the return in addition to other penalties provided by law."
B. This section takes effect July 1, 2004.
Disclosure
SECTION 20. A. Items (11) and (12) of Section 12-54-240(B) of the 1976 Code are amended to read:
"(11) disclosure of information contained on a return to the South Carolina Employment Security Commission, Department of Revenue, or to the Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau;
(12)(a) disclosure to any state agency, county auditor, or county assessor of whether a resident or nonresident tax return was filed by any particular taxpayer;
(b) disclosure to any county auditor or county assessor of whether the four percent assessment pursuant to Section 12-43-220(c)(1) has been claimed by a taxpayer in any county."
B. Section 12-54-240(B)(24) of the 1976 Code, as added by Act 69 of 2003, is further amended to read:
"(24) disclosure of information pursuant to a subpoena issued by the State Grand Jury of South Carolina."
Collection of taxes
SECTION 21. A. Section 12-60-420 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-60-420. (A) If a division of the department makes a division decision or determines there is a deficiency in a state or local tax administered by the department, it may send by first class mail or deliver the division decision or the proposed assessment to the taxpayer. The division decision or the proposed assessment must explain the basis for the division decision or the proposed assessment and state that assessment will be made or the decision will become final unless the taxpayer protests the division decision or the proposed assessment as provided in Section 12-60-450.
(B) If the taxpayer fails to file a protest, the division decision or proposed assessment will become final and, if applicable, an assessment will be made for the amount of a proposed assessment. The department shall make available forms which taxpayers may use to protest the division decision or the proposed assessments. The division decision or the proposed assessment is effective if mailed to the taxpayer's last known address even if the taxpayer refuses or fails to take delivery, is deceased, or is under a legal disability, or, if a corporation, has terminated its existence. For a joint tax return or liability, one division decision or the proposed assessment may be mailed to both taxpayers unless the department has notice that the taxpayers have separate addresses in which event a duplicate original of the division decision or the proposed assessment must be sent to each taxpayer at his last known address."
B. This section takes effect January 1, 2004.
Debt offset
SECTION 22. Section 12-60-490 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-60-490. If a taxpayer is due a refund, the refund must be applied first against any amount of that same tax that is assessed and is currently due from the taxpayer. The remaining refund, if any, must then be applied against any other state taxes that have been assessed against the taxpayer and that are currently due, or offset as provided in Chapter 56 of this title, or offset to collect a debt pursuant to Section 12-4-580, or both. If any excess remains, the taxpayer must be refunded the amount plus interest as determined in Section 12-54-25, or, at the taxpayer's request, it may be credited to future tax liabilities."
Winery sales
SECTION 23. A. Section 61-4-720 of the 1976 Code, as last amended by Act 76 of 2001, is further amended to read:
"Section 61-4-720. Notwithstanding any other provision of law, a licensed winery located in this State is authorized to sell wine produced on its premises with a majority of the juice from fruit and berries which are grown in this State with an alcoholic content of sixteen percent or less on the winery premises and deliver or ship this wine to consumer homes in or outside the State. These wineries are authorized to provide, with or without cost, wine taste samples to prospective customers."
B. This section takes effect July 1, 2004.
Sunday winery sales
SECTION 24. A. Article 7, Chapter 4, Title 61 of the 1976 Code is amended by adding:
"Section 61-4-725. Notwithstanding any other provision of law, a licensed winery located in a county or municipality that has conducted a favorable referendum under the provisions of Section 61-6-2010, during those same hours authorized by permits issued under Section 61-6-2010, may sell, possess, and permit the consumption of wine on the premises."
B. This section takes effect July 1, 2004.
Winery sales
SECTION 25. A. Section 61-4-730 of the 1976 Code, as added by Act 415 of 1996, is amended to read:
"Section 61-4-730. Permitted wineries which produce and sell wine produced on its premises with a majority of the juice from fruit and berries which are grown in this State may sell the wine at retail, wholesale, or both, and deliver or ship the wine to the purchaser in the State. Wine must be delivered between 7:00 a.m. and 7:00 p.m."
B. This section takes effect July 1, 2004.
Due date
SECTION 26. A. Section 61-4-747(C)(4) of the 1976 Code, as added by Act 40 of 2003, is amended to read:
"(4) annually, by January twentieth of each year, pay to the department all sales taxes and excise taxes due on sales to residents of this State in the preceding calendar year, the amount of the taxes to be calculated as if the sale were in this State at the location where delivery is made;"
B. Section 61-4-747(C)(4) of the 1976 Code, as amended by this section, applies for reports due after 2004.
Taxes allowed
SECTION 27. Article 7, Chapter 21, Title 12 of the 1976 Code is amended by adding:
"Section 12-21-1085. Except as provided in Section 12-21-1035 and Sections 12-21-1320 to 12-21-1350, the taxes provided for in this article are in lieu of all other taxes and licenses on beer and wine of the State, the county, or the municipality, except the sales and use tax, or Sections 6-1-700 through 6-1-770, and include licenses for its delivery by the wholesaler."
Airlines may buy at wholesale
SECTION 28. Subarticle 15, Article 3, Chapter 6, Title 61 of the 1976 Code is amended by adding:
"Section 61-6-1555. Notwithstanding any other provision of law, airline companies may purchase beer, wine, and alcoholic liquor directly from wholesalers licensed under the provisions of Section 61-4-520(3) or Section 61-6-100(2). Wholesalers may sell and deliver beer, wine, and alcoholic liquor to airline companies. It is a misdemeanor to use beer, wine, or alcoholic liquor purchased under the provisions of this section for any purpose other than the sale or use by the airline company on its airplanes."
New job defined
SECTION 29. The ultimate undesignated paragraph of Section 12-6-3360(M)(3) of the 1976 Code, as last amended by Act 168 of 2004, is further amended to read:
Notwithstanding another provision of law, 'new job' includes jobs created by a taxpayer when the taxpayer hires more than five hundred full-time individuals:
(a) at a manufacturing facility located in a county classified as distressed;
(b) immediately before their employment by the taxpayer, the individuals were employed by a company operating, as of the effective date of this paragraph, under Chapter 11 of the United States Bankruptcy Code; and
(c) the taxpayer, as an unrelated entity, acquires as of March 12, 2004, substantially all of the assets of the company operating under Chapter 11 of the United States Bankruptcy Code.
Income tax conformity
SECTION 30. A. Section 12-6-40(A)(1) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(1)(a) Except as otherwise provided, 'Internal Revenue Code' means the Internal Revenue Code of 1986, as amended through December 31, 2003, and includes the effective date provisions contained in it.
(b) For purposes of sections 63 and 179 of the Internal Revenue Code, the amendments made by sections 103 and 202 of the Jobs and Growth Tax Relief Reconciliation Act of 2003, P.L. 108-27 (May 28, 2003) are only effective for taxable years beginning after December 31, 2003."
B. That portion of Section 12-6-50 of the 1976 Code preceding item (1) is amended to read:
"For purposes of this chapter and references to the Internal Revenue Code and its sections, except as otherwise specifically provided, the following Internal Revenue Code provisions are specifically not adopted by this State:"
Overdue Tax Debt Collection Act
SECTION 31. A. Title 12 of the 1976 Code is amended by adding:
Section 12-55-10. This chapter may be cited as the 'Overdue Tax Debt Collection Act'.
Section 12-55-20. The General Assembly finds that the Department of Revenue has documented that the state's cost of collecting overdue tax debts exceeds twenty percent of the cost of collecting overdue debts. The General Assembly further finds that the cost of collecting overdue tax debts is currently borne by taxpayers who pay their taxes on time. It is the intent of the General Assembly by enacting the 'Overdue Tax Debt Collection Act' to ship this cost to the delinquent taxpayers who owe overdue tax debts.
Section 12-55-30. (A) As used in this chapter:
(1) 'Overdue tax debt' means any part of a tax debt that remains unpaid one hundred twenty days or more after the taxpayer receives notice as defined in Section 12-55-30(A)(2).
(2) 'Notice' means a notice of assessment issued by the department to the taxpayer pursuant to the South Carolina Revenue Procedures Act.
(3) 'Tax debt' means the total amount of tax, fees, penalties, interest, and costs for which notice has been issued by the department to the taxpayer.
(B) Except when the context clearly indicates a different meaning, the definitions in Section 12-60-30 also apply to this chapter.
Section 12-55-40. A collection assistance fee may be imposed on an overdue tax debt. To impose a collection assistance fee on a tax debt, the department shall notify the taxpayer that the collection assistance fee may be imposed if the tax debt becomes overdue tax debt.
Section 12-55-50. The collection assistance fee is collectible as part of the debt. The department may waive the fee to the same extent as if it were a penalty.
Section 12-55-60. The amount of the collection assistance fee is twenty percent of the amount of the overdue tax.
Section 12-55-70. The proceeds of the collection assistance fee must be credited to a special account within the department and must be used to fund the South Carolina Business One Stop (SCBOS) program within the department. Any excess proceeds of the collection assistance fee above the amount required to fund the SCBOS program must be credited to the department to be retained and expended for use in budgeted operations.
Section 12-55-80. The department may bring suits in the courts of other states to collect taxes legally due this State. The officials of other states are empowered to sue for the collection of taxes in the courts of this State. Whenever the department considers it expedient to employ local counsel to assist in bringing suit in an out-of-state court, the department may employ local counsel.
Section 12-55-90. Collection agencies with which the department contracts under Sections 12-4-340 and 12-54-227 are also authorized to collect on behalf of the department overdue tax debts and the collection fee imposed by this chapter."
B. The 'Overdue Tax Debt Collection Act' as added by this section applies for all tax debts incurred before which remain outstanding on December 1, 2002, and to all tax debts incurred on or after December 1, 2002.
Severability
SECTION 32. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
Airlines may buy at wholesale
SECTION 33. Subarticle 15, Article 3, Chapter 6, Title 61 of the 1976 Code is amended by adding:
"Section 61-6-1555. Notwithstanding any other provision of law, an airline company may purchase beer, wine, and alcoholic liquor directly from a wholesaler licensed pursuant to the provisions of Section 61-4-520(3) or Section 61-6-100(2). A wholesaler may sell and deliver beer, wine, and alcoholic liquor to an airline company for use on the company's airplanes. A person other than an airline passenger who uses beer, wine, or alcoholic liquor purchased pursuant to the provisions of this section for another purpose other than the sale or use by the airline company on its airplanes is guilty of a misdemeanor and, upon conviction, must be fined not more than one thousand dollars or imprisoned not more than six months, or both. Each violation of this section constitutes a separate offense."
Sales tax exemption
SECTION 34. Section 12-36-2120 of the 1976 Code is amended by adding an appropriately numbered item at the end to read:
"( ) prescription and over-the-counter medicines and medical supplies, including diabetic supplies, sold to a health care clinic that provides medical and dental care without charge to all of its patients."
Property tax exemption, repeal, task force, millage rate
SECTION 35. A. Article 3, Chapter 37, Title 12 of the 1976 Code is amended by adding:
"Section 12-37-223. (A) For purposes of this section, real property means real property classified for property tax purposes pursuant to Section 12-43-220.
(B) There is exempted from property tax an amount of fair market value of real property located in the county sufficient to limit to twenty percent any valuation increase attributable to a countywide appraisal and equalization program conducted pursuant to Section 12-43-217. An exemption allowed by this section does not apply to:
(1) value attributable to property or improvements not previously taxed, such as new construction, and for renovation of existing structures;
(2) real property transferred after the year in which the most recent countywide equalization program was implemented pursuant to Section 12-43-217; and
(3) real property valued for property tax purposes by the unit evaluation method.
(C)(1) Notwithstanding subsection (B)(2), the exemption provided in subsection (B) applies to property which has been transferred in fee simple in a transfer that is not subject to income tax pursuant to Sections 102, limited to transfer to a spouse or surviving spouse, (Gifts and Inheritances), 1033 (Conversions--Fire and Insurance Proceeds to Rebuild), 1041 (Transfers of Property Between Spouses or Incident to Divorce), 351 (Transfer to a Corporation Controlled by Transferor), 355 (Distribution by a Controlled Corporation), 368 (Corporate Reorganizations), 721 (Nonrecognition of Gain or Loss on a Contribution to a Partnership) of the Internal Revenue Code as defined in Section 12-6-40; and to distributions of real property out of corporations, partnerships, or limited liability companies to persons who initially contributed the property to the corporation, partnership, or limited liability company.
(2) Notwithstanding Subsection (B)(2), and in addition to the nondisqualifying transfers allowed pursuant to item (1) of this subsection, the transfer of any interest in real property to a spouse, whether inter vivos, testamentary, or by operation of law, is a nondisqualifying transfer, and the exemption allowed pursuant to Subsection (B) continues to apply to the interest transferred.
(D) Once the taxable value of a property is reduced because of the exemption provided in subsection (B), that reduced value remains in effect, except as otherwise provided in subsection (B)(2), until the implementation of the next equalization and reassessment program. The effect of this exemption is, that upon the implementation of each subsequent equalization and reassessment program, the value of the property as determined under Section 12-37-930, reduced by the amount of any exemption granted under this section, may not increase except in the year following a disqualifying transfer in ownership.
When a property is transferred such that the property is no longer eligible for the exemption provided for in subsection (B), the property is subject to being taxed in the tax year following the transfer at its value, as determined under Section 12-37-930, at market value based on the sale or transfer of ownership or at the appraised value determined by the county assessor.
(E) The closing attorney involved in a real estate transfer shall provide the following notice to the buyer(s):
THE INTEREST IN REAL PROPERTY TRANSFERRED AS A RESULT OF THIS TRANSACTION MAY BE SUBJECT TO PROPERTY TAXATION DURING THE NEXT TAX YEAR AT A VALUE THAT REFLECTS ITS FAIR MARKET VALUE.
(F) To qualify for the exemption authorized under subsection (B), the owner of the property for which the exemption is sought or the owner's agent must apply to the county assessor where the property is located and establish eligibility for the exemption. The time period for making application for the exemption provided for in subsection (B), or for seeking a refund of taxes paid as a result of a subsequent determination of eligibility for the exemption, is the same as provided for in Section 12-43-220(c) for administering the special legal residence assessment ratio, mutatis mutandis.
Under penalty of perjury, the taxpayer must certify that the property meets the qualifications established in subsection (B) for eligibility for the exemption and provide such other proof required by the county assessor. The burden is on the taxpayer to establish eligibility for the exemption. The Department of Revenue shall assist the applicant and the assessor to the extent practicable in providing information necessary or helpful in determining eligibility. If the assessor determines the applicant ineligible, the value of the property must be determined by the assessor.
No further application is necessary from the owner who qualified the property for the exemption while the property continues to meet the eligibility requirements. If a change in ownership occurs, the owner who had qualified for the exemption shall notify the assessor within six months of the transfer of title. Another application is required by the new owner if the new owner seeks to qualify for the exemption provided by this section.
If a person signs the certification, obtains the exemption, and is, thereafter, found not eligible, a penalty may be imposed equal to one hundred percent of the tax paid, plus interest on that amount at a rate of one-half of one percent a month, but in no case less than thirty dollars nor more than the current year's taxes assessed on the value of the property without regard to the exemption."
B. Section 12-37-223A. of the 1976 Code, is repealed for property tax years beginning after 2003.
C. Article 1, Chapter 37, Title 12 of the 1976 Code is amended by adding:
"Section 12-37-130. The Speaker of the House of Representatives and the President Pro Tempore of the Senate shall appoint, by January 14, 2014, a task force to study the effects of this chapter on homeowners and the real estate industry and recommend changes to this chapter, and shall report its findings to the General Assembly no later than January 13, 2015."
D. Section 6-1-320(A) of the 1976 Code, as last amended by Act 114 of 1999, is further amended to read:
"(A) Notwithstanding Section 12-37-251(E), a local governing body may increase the millage rate imposed for general operating purposes above the rate imposed for such purposes for the preceding tax year only to the extent of the increase in the average of the twelve monthly consumer prices indexes for the most recent twelve-month period consisting of January through December of the preceding calendar year. However, in the year in which a reassessment program is implemented, the rollback millage, as calculated pursuant to Section 12-37-251(E), must be used in lieu of the previous year's millage rate."
E. This Section takes effect upon approval by the Governor and applies for countywide reassessment values implemented after 2003. Amounts exempted pursuant to the former provisions of Section 12-37-223(A) are deemed to have been exempted pursuant to Section 12-37-223 of the 1976 Code, as added by this Section.
Time effective
SECTION 36. Except where otherwise provided, this act takes effect upon approval by the Governor.
Ratified the 3rd day of June, 2004.
__________________________________________
President of the Senate
___________________________________________
Speaker of the House of Representatives
Approved the ____________ day of _____________________2004.
___________________________________________
Governor
This web page was last updated on Wednesday, December 9, 2009 at 10:14 A.M.