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TO ENACT THE SCHOOL EQUITY AND PROPERTY TAX RELIEF ACT BY AMENDING THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 11 TO CHAPTER 36, TITLE 12, SO AS TO IMPOSE AN ADDITIONAL STATE SALES, USE, AND CASUAL EXCISE TAX EQUAL TO TWO PERCENT OF GROSS PROCEEDS OF SALES OR SALES PRICE, AND TO PROVIDE THAT THIS ADDITIONAL TWO PERCENT TAX DOES NOT APPLY TO THE SALE OF UNPREPARED FOOD AND ON ACCOMMODATIONS FOR TRANSIENTS; BY AMENDING SECTION 11-11-150, AS AMENDED, RELATING TO THE TRUST FUND FOR TAX RELIEF, SO AS TO PROVIDE THAT REVENUES FROM THE TRUST FUND TO BE DISTRIBUTED TO A SCHOOL DISTRICT SHALL BE PAID MONTHLY IN AN AMOUNT THAT IS THE DISTRICT'S PROPORTIONATE SHARE OF TRUST FUND REVENUES BASED ON THE DISTRICT'S WEIGHTED PUPIL UNITS AS A PERCENTAGE OF STATEWIDE WEIGHTED PUPIL UNITS; BY ADDING SECTION 11-11-155 SO AS TO CREATE THE SCHOOL MILLAGE TAX EXEMPTION TRUST FUND (THE SCHOOL TRUST FUND) AND REQUIRE REVENUES OF THE ADDITIONAL SALES AND USE TAX AND ADDITIONAL REVENUE GENERATED BY ELIMINATING OR REVISING SALES TAX EXEMPTIONS AND CAPS TO BE CREDITED TO THIS FUND, BY ADDING SECTION 12-6-1145 SO AS TO PROVIDE THAT A DEDUCTION IS ALLOWED FROM SOUTH CAROLINA TAXABLE INCOME FOR CASH CONTRIBUTIONS FOR ANY EDUCATIONAL PURPOSE MADE TO A PUBLIC SCHOOL OR TO A SCHOOL DISTRICT OF THE STATE, OR MADE TO THE SCHOOL TRUST FUND; BY AMENDING SECTIONS 12-36-60 AND 12-36-90, BOTH AS AMENDED, RELATING TO THE DEFINITIONS OF "TANGIBLE PERSONAL PROPERTY" AND "GROSS PROCEEDS OF SALES" FOR PURPOSES OF THE IMPOSITION OF THE SALES AND USE TAX AND EXEMPTIONS FROM THE SALES TAX, SO AS TO PROVIDE THAT THE SALE OF SOUTH CAROLINA EDUCATION LOTTERY TICKETS IS A SALE OF TANGIBLE PERSONAL PROPERTY GIVING RISE TO GROSS PROCEEDS OF SALES IN THE AMOUNT OF THE TICKET PRICE AND IS SUBJECT TO THE SALES TAX; BY AMENDING SECTION 12-36-2110, AS AMENDED, RELATING TO THE MAXIMUM SALES, USE, AND CASUAL EXCISE TAX ON VARIOUS ITEMS OF TANGIBLE PERSONAL PROPERTY, INCLUDING MOTOR VEHICLES, SO AS TO RAISE THE MAXIMUM TAX; BY AMENDING SECTION 12-36-2120, AS AMENDED, RELATING TO SALES TAX EXEMPTIONS, SO AS TO DELETE CERTAIN EXEMPTIONS; BY ADDING SECTION 12-37-253 SO AS TO PROVIDE FOR A PROPERTY TAX EXEMPTION FOR ALL PROPERTY FROM SCHOOL OPERATING MILLAGE NOT OTHERWISE EXEMPT, PROVIDE THE METHOD OF DETERMINING AND PHASING IN THE EXEMPTION, AND TO PROVIDE REIMBURSEMENTS TO SCHOOL DISTRICTS FOR THIS NEW EXEMPTION WITH A PAYMENT BASED ON WEIGHTED PUPIL UNITS; BY AMENDING SECTION 59-20-40, AS AMENDED, RELATING TO THE EDUCATION FINANCE ACT, SO AS TO REVISE WEIGHTINGS USED TO PROVIDE RELATIVE COST DIFFERENCES; BY ADDING SECTION 59-20-42 SO AS TO PROVIDE THAT BEGINNING WITH FISCAL YEAR 2003-2004 EDUCATION FINANCE ACT APPROPRIATIONS SHALL BE DISTRIBUTED TO A SCHOOL DISTRICT IN AN AMOUNT THAT IS THE DISTRICT'S PROPORTIONATE SHARE OF SUCH FUNDS BASED ON THE DISTRICT'S WEIGHTED PUPIL UNITS AS A PERCENTAGE OF STATEWIDE WEIGHTED PUPIL UNITS AS DETERMINED ANNUALLY PURSUANT TO THE EDUCATION FINANCE ACT; TO PROVIDE THAT ALL STATE REVENUES FROM ANY SOURCE THE DISTRIBUTION OF WHICH IS NOT OTHERWISE PROVIDED FOR IN THIS ACT, EXCEPT FOR EDUCATION ACCOUNTABILITY ACT FUNDS, TO BE DISTRIBUTED TO SCHOOL DISTRICTS SHALL BE DISTRIBUTED IN AN AMOUNT THAT IS THE DISTRICT'S PROPORTIONATE SHARE OF SUCH FUNDS BASED ON THE DISTRICT'S WEIGHTED PUPIL UNITS AS A PERCENTAGE OF STATEWIDE WEIGHTED PUPIL UNITS AS DETERMINED ANNUALLY PURSUANT TO THE EDUCATION FINANCE ACT; TO PROVIDE THAT EACH SCHOOL DISTRICT FROM ALL FUNDS DISTRIBUTED TO IT FROM STATE SOURCES AS FUNDED BY THE GENERAL ASSEMBLY, EXCEPT THE EDUCATION ACCOUNTABILITY ACT, SHALL RECEIVE THE SUM OF FIVE THOUSAND DOLLARS PER WEIGHTED PUPIL UNIT; TO REQUIRE THE SOUTH CAROLINA PUBLIC SERVICE COMMISSION TO ORDER RATE REDUCTIONS IN RATES CHARGED CUSTOMERS OF REGULATED PUBLIC UTILITIES SUFFICIENT TO REFLECT NET PROPERTY TAX REDUCTIONS TO UTILITIES PROVIDED PURSUANT TO THIS ACT, TO PROVIDE THAT FOR A PERIOD OF THREE YEARS BEGINNING JULY 1, 2003, AND ENDING JUNE 30, 2006, A LOCAL GOVERNING BODY UNDER PROVISIONS OF LAW AUTHORIZING THE ASSESSMENT OF TAXES AND FEES UNDER SPECIFIED CONDITIONS MAY INCREASE THE MILLAGE RATE IMPOSED FOR GENERAL OPERATING PURPOSES ABOVE THE RATE IMPOSED FOR SUCH PURPOSES FOR THE PRECEDING TAX YEAR ONLY BY A TWO-THIRDS VOTE OF THE MEMBERSHIP OF THE GOVERNING BODY, PRESENT OR NOT, RATHER THAN BY A POSITIVE MAJORITY VOTE; BY REPEALING ARTICLE 3, CHAPTER 10 OF TITLE 4, RELATING TO THE CAPITAL PROJECT SALES TAX ACT, AND CHAPTER 37 OF TITLE 4 RELATING TO OPTIONAL METHODS FOR FINANCING TRANSPORTATION FACILITIES INCLUDING LEVY OF ADDITIONAL SALES TAXES, AND TO PROVIDE THAT SALES TAXES FOR PROJECTS PREVIOUSLY AUTHORIZED UNDER THESE PROVISIONS SHALL CONTINUE UNTIL THEIR SCHEDULED TERMINATION DATE; TO REQUIRE A REFERENDUM IN COUNTIES IN WHICH THE LOCAL OPTION SALES TAX IS CURRENTLY IMPOSED FOR THE PURPOSE OF DETERMINING WHETHER TO RESCIND THE TAX AND BY PROVIDING THAT THIS ACT TAKES EFFECT JULY 1, 2003, AND APPLIES FOR PROPERTY TAX YEARS BEGINNING AFTER 2003 AND MOTOR VEHICLE TAX YEARS BEGINNING AFTER JUNE 30, 2003.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 36, Title 12 of the 1976 Code is amended by adding:
Section 12-36-1110. An additional sales, use, and casual excise tax equal to two percent is imposed on amounts taxable pursuant to this chapter, except that this additional two percent tax does not apply to the sale of unprepared food which can be purchased with USDA food coupons nor does it apply to amounts taxed pursuant to Section 12-36-920, the tax on accommodations for transients."
SECTION 2. Section 11-11-150 of the 1976 Code, as last amended by Act 387 of 2000, is further amended by adding:
"(H) Beginning July 1, 2003, revenues from the Trust Fund for Tax Relief to be distributed to a school district as a reimbursement for the property tax exemptions or exclusions enumerated in items (1) through (5) of subsection (A) shall be paid monthly in an amount that is the district's proportionate share of trust fund revenues based on the district's weighted pupil units as a percentage of statewide weighted pupil units as determined annually pursuant to the Education Finance Act."
SECTION 3. Chapter 11, Title 11 of the 1976 Code is amended by adding:
"Section 11-11-155. (A) For each fiscal year, the revenue from the tax imposed pursuant to Section 12-36-1110, one dollar and fifteen cents of the revenue derived from the additional documentary stamp tax, and all estimated additional sales, use, and casual excise tax revenue collected as a result of tax exemptions and tax caps deleted, revised, or repealed effective July 1, 2003, as determined by the Board of Economic Advisors, are automatically credited to a fund separate and distinct from the state general fund known as the "School Tax Millage Exemption Trust Fund" (the School Trust Fund). The Board of Economic Advisors shall account for the School Trust Fund revenue separately from general fund revenues in reports to the Governor and the General Assembly. No portion of these revenues shall be credited to the Education Improvement Act (EIA) Fund.
(B) An unexpended balance in the School Trust Fund at the end of a fiscal year must remain in the School Trust Fund.
(C) Earnings on the School Trust Fund must be credited to the School Trust Fund.
(D) Nothing in this section prohibits appropriations by the General Assembly of additional revenues to the School Trust Fund.
(E) The School Trust Fund may also accept cash contributions from taxpayers authorized by Section 12-6-1145 and these contributions must be used and applied in the same manner other School Trust Fund revenues are used and applied."
SECTION 4. Chapter 6 of Title 12 of the 1976 Code is amended by adding:
"Section 12-6-1145. A deduction is allowed from South Carolina taxable income for cash contributions for any educational purpose made to a public school or to a school district of the State, or made to the School Tax Millage Exemption Trust Fund established by Section 11-11-155."
SECTION 5. Section 12-36-60 of the 1976 Code is amended to read:
"Section 12-36-60. 'Tangible personal property' means personal property which may be seen, weighed, measured, felt, touched, or which is in any other manner perceptible to the senses. It also includes a South Carolina Education Lottery Ticket sold by a lottery retailer as provided in Chapter 150 of Title 59. It also includes services and intangibles, including communications, laundry and related services, furnishing of accommodations, and sales of electricity, the sale or use of which is subject to tax under this chapter and does not include stocks, notes, bonds, mortgages, or other evidences of debt. Tangible personal property does not include the transmission of computer database information by a cooperative service when the database information has been assembled by and for the exclusive use of the members of the cooperative service."
SECTION 6. Section 12-36-90(1) of the 1976 Code is amended by adding a subitem appropriately lettered at the end to read:
"( ) the proceeds from the sale of a South Carolina Education Lottery Ticket. The ticket prices shall be in whole dollar amounts to which the required sales tax shall be added."
SECTION 7. Section 12-36-2110 of the 1976 Code, as last amended by Act 283 of 2000, is further amended to read:
"Section 12-36-2110. (A) The maximum tax imposed by this chapter is three eight hundred dollars for each sale made or lease executed after June 30, 1984, or lease executed after August 31, 1985 2003, of each:
(1) aircraft, including unassembled aircraft which is to be assembled by the purchaser, but not items to be added to the unassembled aircraft;
(2) motor vehicle;
(3) motorcycle;
(4) boat;
(5) trailer or semitrailer, pulled by a truck tractor, as defined in Section 56-3-20, and horse trailers but not including house trailers or campers as defined in Section 56-3-710;
(6) recreational vehicle, including tent campers, travel trailer, park model, park trailer, motor home, and fifth wheel; or
(7) self-propelled light construction equipment with compatible attachments limited to a maximum of one hundred sixty net engine horsepower.
In the case of a lease, the total tax rate required by law applies on each payment until the total tax paid equals three eight hundred dollars. Nothing in this section prohibits a taxpayer from paying the total tax due at the time of execution of the lease, or with any payment under the lease. To qualify for the tax limitation provided by this section, a lease must be in writing and specifically state the term of, and remain in force for, a period in excess of ninety continuous days.
(B) For the sale of a manufactured home, as defined in Section 40-29-20, the tax is calculated as follows:
(1) subtract trade-in allowance from the sales price;
(2) multiply the result from (1) by sixty-five percent;
(3) if the result from (2) is no greater than six sixteen thousand dollars, multiply by five percent for the amount of tax due;
(4) if the result from (2) is greater than six sixteen thousand dollars, the tax due is three eight hundred dollars plus two percent of the amount greater than six sixteen thousand dollars.
However, a manufactured home is exempt from any tax that may be due above three eight hundred dollars as a result of the calculation in item (4) if it meets these energy efficiency levels: storm or double pane glass windows, insulated or storm doors, a minimum thermal resistance rating of the insulation only of R-11 for walls, R-19 for floors, and R-30 for ceilings. However, variations in the energy efficiency levels for walls, floors, and ceilings are allowed and the exemption on tax due above three eight hundred dollars applies if the total heat loss does not exceed that calculated using the levels of R-11 for walls, R-19 for floors, and R-30 for ceilings. The edition of the American Society of Heating, Refrigerating, and Air Conditioning Engineers Guide in effect at the time is the source for heat loss calculation. The dealer selling the manufactured home must maintain records, on forms provided by the State Energy Office, on each manufactured home sold which contains the above calculations and verifying whether or not the manufactured home met the energy efficiency levels provided for in this subsection. These records must be maintained for three years and must be made available for inspection upon request of the Department of Consumer Affairs or the State Energy Office. Modular homes are also subject to the sales tax in the same manner manufactured homes are subject to the sales tax under this subsection, mutates mutandi.
(C) For the sale of each musical instrument, or each piece of office equipment, purchased by a religious organization exempt under Internal Revenue Code Section 501(c)(3), the maximum tax imposed by this chapter is three eight hundred dollars. The musical instrument or office equipment must be located on church property and used exclusively for the organization's exempt purpose. The religious organization must furnish to the seller an affidavit on forms prescribed by the department. The affidavit must be retained by the seller.
(D) Repealed Reserved.
(E) Equipment provided, supplied, or installed on a firefighting vehicle is included with the vehicle for purposes of calculating the maximum tax due under this section.
(F) Effective July 1, 2004, the maximum sales tax cap under this section is increased by one hundred dollars and by an additional one hundred dollars effective July 1, 2005, and the revenue generated from these increases must be credited to the School Trust Fund established pursuant to Section 11-11-155. Appropriate adjustments in the maximum sales tax cap on modular and manufactured homes shall also be made to reflect these increases."
SECTION 8. Section 12-36-2120 of the 1976 Code, as last amended by Act 356 of 2002, is further amended to read:
"Section 12-36-2120. Exempted from the taxes imposed by this chapter are the gross proceeds of sales or sales price of:
(1) tangible personal property or receipts of any business which the State is prohibited from taxing by the Constitution or laws of the United States of America or by the Constitution or laws of this State;
(2) tangible personal property sold to the federal government;
(3)(a) textbooks, books, magazines, periodicals, newspapers, and access to on-line information systems used in a course of study in primary and secondary schools and institutions of higher learning or for students' use in the school library of these schools and institutions;
(b) books, magazines, periodicals, newspapers, and access to on-line information systems sold to publicly supported state, county, or regional libraries.
Items in this category may be in any form, including microfilm, microfiche, and CD ROM; however, transactions subject to tax under Sections 12-36-910(B)(3) and 12-36-1310(B)(3) do not fall within this exemption;
(4) livestock. 'Livestock' is defined as domesticated animals customarily raised on South Carolina farms for use primarily as beasts of burden, or food, and certain mammals when raised for their pelts or fur. Animals such as dogs, cats, reptiles, fowls (except baby chicks and poults), and animals of a wild nature, are not considered livestock;
(5) feed used for the production and maintenance of poultry and livestock;
(6) insecticides, chemicals, fertilizers, soil conditioners, seeds, or seedlings, or nursery stock, used solely in the production for sale of farm, dairy, grove, vineyard, or garden products or in the cultivation of poultry or livestock feed;
(7) containers and labels used in:
(a) preparing agricultural, dairy, grove, or garden products for sale; or
(b) preparing turpentine gum, gum spirits of turpentine, and gum resin for sale.
For purposes of this exemption, containers mean boxes, crates, bags, bagging, ties, barrels, and other containers;
(8) newsprint paper, newspapers, and religious publications, including the Holy Bible and the South Carolina Department of Agriculture's The Market Bulletin;
(9) coal, coke or other fuel sold to manufacturers, electric power companies, and transportation companies for:
(a) use or consumption in the production of by-products;
(b) the generation of heat or power used in manufacturing tangible personal property for sale. For purposes of this item, 'manufacturer' or 'manufacturing' includes the activities of a processor;
(c) the generation of electric power or energy for use in manufacturing tangible personal property for sale; or
(d) the generation of motive power for transportation. For the purposes of this exemption, 'manufacturer' or 'manufacturing' includes the activities of mining and quarrying;
(10)(a) meals or foodstuffs used in furnishing meals to school children, if the sales or use are within school buildings and are not for profit;
(b) meals or foodstuffs provided to elderly or disabled persons at home by nonprofit organizations that receive only charitable contributions in addition to sale proceeds from the meals;
(c) foodstuffs, either prepared or packaged for the homeless or needy that are sold to nonprofit organizations, or foodstuffs that are subsequently sold or donated by a nonprofit organization to another nonprofit organization. This subitem is only applicable to foodstuffs which are eligible for purchase under the USDA food stamp program;
(d) meals or foodstuffs prepared or packaged that are sold to public or nonprofit organizations for congregate or in-home service to the homeless or needy or disabled adults over eighteen years of age or individuals over sixty years of age. This subitem only applies to meals and foodstuffs eligible for purchase under the USDA food stamp program.;
(11)[Reserved](a) toll charges for the transmission of voice or messages between telephone exchanges;
(b) charges for telegraph messages;
(c) carrier access charges and customer access line charges established by the Federal Communications department or the South Carolina Public Service department; and
(d)transactions involving automatic teller machines;
(12) [Reserved]water sold by public utilities, if rates and charges are of the kind determined by the Public Service Commission, or water sold by nonprofit corporations organized pursuant to Chapter 36 of Title 33;
(13) [Reserved]fuel, lubricants, and supplies for use or consumption aboard ships in intercoastal trade or foreign commerce. This exemption does not exempt or exclude from the tax the sale of materials and supplies used in fulfilling a contract for the painting, repair or reconditioning of ships and other watercraft;
(14) [Reserved]wrapping paper, wrapping twine, paper bags, and containers, used incident to the sale and delivery of tangible personal property;
(15)(a) motor fuel, blended fuel, and alternative fuel subject to tax under Chapter 28 of Title 12; however, gasoline used in aircraft is not exempt from the sales and use tax;
(b) if the fuel tax is subsequently refunded under Section 12-28-710, the sales or use tax is due unless otherwise exempt, and the person receiving the refund is liable for the sales or use tax;
(c) fuels used in farm machinery and farm tractors; and
(d) fuels used in commercial fishing vessels.;
(16) farm machinery and their replacement parts and attachments, used in planting, cultivating or harvesting farm crops, including bulk coolers (farm dairy tanks) used in the production and preservation of milk on dairy farms, and machines used in the production of poultry and poultry products on poultry farms, when such products are sold in the original state of production or preparation for sale. This exemption does not include automobiles or trucks;
(17) machines used in manufacturing, processing, recycling, compounding, mining, or quarrying tangible personal property for sale. 'Machines' include the parts of machines, attachments, and replacements used, or manufactured for use, on or in the operation of the machines and which (a) are necessary to the operation of the machines and are customarily so used, or (b) are necessary to comply with the order of an agency of the United States or of this State for the prevention or abatement of pollution of air, water, or noise that is caused or threatened by any machine used as provided in this section. This exemption does not include automobiles or trucks. As used in this item 'recycling' means a process by which materials that otherwise would become solid waste are collected, separated, or processed and reused, or returned to use in the form of raw materials or products, including composting, for sale. In applying this exemption to machines used in recycling, the following percentage of the gross proceeds of sale, or sales price of, machines used in recycling are exempt from the taxes imposed by this chapter:
Fiscal Year of Sale Percentage
Fiscal year 1997-98 fifty percent
After June 30, 1998 one hundred percent;
(18) fuel used exclusively to cure agricultural products;
(19) electricity used by cotton gins, manufacturers, miners, or quarriers to manufacture, mine, or quarry tangible personal property for sale. For purposes of this item, 'manufacture' or 'manufacture' includes the activities of processors;
(20) [Reserved]railroad cars, locomotives, and their parts, monorail cars, and the engines or motors that propel them, and their parts;
(21) [Reserved]vessels and barges of more than fifty tons burden;
(22) materials necessary to assemble missiles to be used by the Armed Forces of the United States;
(23) farm, grove, vineyard, and garden products, if sold in the original state of production or preparation for sale, when sold by the producer or by members of the producers immediate family;
(24) supplies and machinery used by laundries, cleaning, dyeing, pressing, or garment or other textile rental establishments in the direct performance of their primary function, but not sales of supplies and machinery used by coin-operated laundromats;
(25) motor vehicles (excluding trucks) or motorcycles, which are required to be licensed to be used on the highways, sold to a resident of another state, but who is located in South Carolina by reason of orders of the United States Armed Forces. This exemption is allowed only if within ten days of the sale the vendor is furnished a statement from a commissioned officer of the armed forces of a higher rank than the purchaser certifying that the buyer is a member of the armed forces on active duty and a resident of another state or if the buyer furnishes a leave and earnings statement from the appropriate department of the armed services which designates the state of residence of the buyer;
(26) [Reserved]all supplies, technical equipment, machinery, and electricity sold to radio and television stations, and cable television systems, for use in producing, broadcasting, or distributing programs. For the purpose of this exemption, radio stations, television stations, and cable television systems are deemed to be manufacturers;
(27) all plants and animals sold to any a publicly supported zoological park or garden or to any of its nonprofit support corporations;
(28)(a) medicine and prosthetic devices sold by prescription, prescription medicines, and therapeutic radiopharmaceuticals used in the treatment of cancer, lymphoma, leukemia, or related diseases, including prescription medicines used to relieve the effects of any such treatment, and free samples of prescription medicine distributed by its manufacturer and any use of these free samples;
(b) hypodermic needles, insulin, alcohol swabs, blood sugar testing strips, monolet lancets, dextrometer supplies, blood glucose meters, and other similar diabetic supplies sold to diabetics under the authorization and direction of a physician;
(c) disposable medical supplies such as bags, tubing, needles, and syringes, which are dispensed by a licensed pharmacist in accordance with an individual prescription written for the use of a human being by a licensed health care provider, which are used for the intravenous administration of a prescription drug or medicine, and which come into direct contact with the prescription drug or medicine. This exemption applies only to supplies used in the treatment of a patient outside of a hospital, skilled nursing facility, or ambulatory surgical treatment center;
(d) medicine donated by its manufacturer to a public institution of higher education for research or for the treatment of indigent patients; and
(e) dental prosthetic devices;
(29) tangible personal property purchased by persons under a written contract with the federal government when the contract necessitating the purchase provides that title and possession of the property is to transfer from the contractor to the federal government at the time of purchase or after the time of purchase. This exemption also applies to purchases of tangible personal property which becomes part of real or personal property owned by the federal government or, as provided in the written contract, is to transfer to the federal government. This exemption does not apply to purchases of tangible personal property used or consumed by the purchaser;
(30) office supplies, or other commodities, and services resold by the Division of General Services of the State Budget and Control Board to departments and agencies of the state government, if the tax was paid on the division's original purchase;
(31) vacation time sharing plans, vacation multiple ownership interests, and exchanges of interests in vacation time sharing plans and vacation multiple ownership interests as provided by Chapter 32 of Title 27, and any other exchange of accommodations in which the accommodations to be exchanged are the primary consideration;
(32) natural and liquefied petroleum gas and electricity used exclusively in the production of poultry, livestock, swine, and milk;
(33) [Reserved]electricity, natural gas, fuel oil, kerosene, LP gas, coal, or any other combustible heating material or substance used for residential purposes. Individual sales of kerosene or LP gas of twenty gallons or less by retailers are considered used for residential heating purposes;
(34) thirty-five percent of the gross proceeds of the sale of modular homes as defined in Section 31-17-20;
(35) [Reserved]motion picture film sold or rented to or by theaters;
(36) tangible personal property where the seller, by contract of sale, is obligated to deliver to the buyer, or to an agent or donee of the buyer, at a point outside this State or to deliver it to a carrier or to the mails for transportation to the buyer, or to an agent or donee of the buyer, at a point outside this State;
(37) [Reserved]petroleum asphalt products, commonly used in paving, purchased in this State, which are transported and consumed out of this State;
(38) hearing aids, as defined by Section 40-25-20(5);
(39) concession sales at a festival by an organization devoted exclusively to public or charitable purposes, if:
(a) all the net proceeds are used for those purposes;
(b) in advance of the festival, its organizers provide the department, on a form it prescribes, information necessary to ensure compliance with this item.
For purposes of this item, a 'festival' does not include a recognized state or county fair;
(40) [Reserved]containers and chassis, including all parts, components, and attachments, sold to international shipping lines which have a contractual relationship with the South Carolina State Ports Authority and which are used in the import or export of goods to and from this State;
(41) items sold by organizations exempt under Section 12-37-220A(3) and (4) and B(5), (6), (7), (8), (12), (16), (19), (22), and (24), if the net proceeds are used exclusively for exempt purposes and no benefit inures to any individual. An organization whose sales are exempted by this item is also exempt from the retail license tax provided in Article 5 of this chapter;
(42) depreciable assets, used in the operation of a business, pursuant to the sale of the business. This exemption only applies when the entire business is sold by the owner of it, pursuant to a written contract and the purchaser continues operation of the business;
(43) all supplies, technical equipment, machinery, and electricity sold to motion picture companies for use in filming or producing motion pictures. For the purposes of this item, 'motion picture' means any audiovisual work with a series of related images either on film, tape, or other embodiment, where the images shown in succession impart an impression of motion together with accompanying sound, if any, which is produced, adapted, or altered for exploitation as entertainment, advertising, promotional, industrial, or educational media; and a 'motion picture company' means a company generally engaged in the business of filming or producing motion pictures;
(44) electricity used to irrigate crops;
(45) building materials, supplies, fixtures, and equipment for the construction, repair, or improvement of or that become a part of a self-contained enclosure or structure specifically designed, constructed, and used for the commercial housing of poultry or livestock.
(46) war memorials or monuments honoring units or contingents of the Armed Forces of the United States or of the National Guard, including United States military vessels, which memorials or monuments are affixed to public property;
(47) tangible personal property sold to charitable hospitals predominantly serving children exempt under Section 12-37-220, where care is provided without charge to the patient.;
(48) solid waste disposal collection bags required pursuant to the solid waste disposal plan of a county or other political subdivision if the plan requires the purchase of a specifically designated containment bag for solid waste disposal;
(49) [Reserved]postage purchased by a person engaged in the business of selling advertising services for clients consisting of mailing, or directing the mailing of, printed advertising material through the United States mail directly to the client's customers or potential customers or by a person to mail or direct the mailing of printed advertising material through the United States mail to a potential customer;
(50)(a) recycling property;
(b) electricity, natural gas, propane, or fuels of any type, oxygen, hydrogen, nitrogen, or gasses of any type, and fluids and lubricants used by a qualified recycling facility;
(c) tangible personal property which becomes, or will become, an ingredient or component part of products manufactured for sale by a qualified recycling facility;
(d) tangible personal property of or for a qualified recycling facility which is or will be used (1) for the handling or transfer of postconsumer waste material, (2) in or for the manufacturing process, or (3) in or for the handling or transfer of manufactured products;
(e) machinery and equipment foundations used or to be used by a qualified recycling facility;
(f) as used in this item, 'recycling property', 'qualified recycling facility', and 'postconsumer waste material' have the meanings provided in Section 12-6-3460;
(51) material handling systems and material handling equipment including, but not limited to, racks used in the operation of a distribution facility or a manufacturing facility and either used or not used to support a facility structure or part of it. To qualify for this exemption, the taxpayer shall notify the department before the first month it uses the exemption and shall invest at least thirty-five million dollars in real or personal property in this State over the five-year period beginning on the date provided by the taxpayer to the department in its notices. The taxpayer shall notify the department in writing that it has met the thirty-five million dollar investment requirement or, after the expiration of the five years, that it has not met the thirty-five million dollar investment requirement. The department may assess any tax due on material handling systems and material handling equipment purchased tax-free pursuant to this item but due the State as a result of the taxpayer's failure to meet the thirty-five million dollar investment requirement. The running of the periods of limitations for assessment of taxes provided in Section 12-54-85 is suspended for the time period beginning with notice to the department before the taxpayer uses the exemption and ending with notice to the department that the taxpayer either has met or has not met the thirty-five million dollar investment requirement.;
(52) parts and supplies used by persons engaged in the business of repairing or reconditioning aircraft owned by or leased to the federal government or commercial air carriers. This exemption does not extend to tools and other equipment not attached to or that do not become a part of the aircraft.;
(53) [Reserved]motor vehicle extended service contracts and motor vehicle extended warranty contracts.
(54) [Reserved]clothing and other attire required for working in a Class 100 or better as defined in Federal Standard 209E clean room environment.
(55) [Reserved]audiovisual masters made or used by a production company in making visual and audio images for first generation reproduction. For purposes of this item:
(a) 'Audiovisual master' means an audio or video film, tape, or disk, or another audio or video storage device from which all other copies are made.
(b) 'Production company' means a person or entity engaged in the business of making motion picture, television, or radio images for theatrical, commercial, advertising, or education purposes.;
(56) Machines used in research and development. 'Machines' includes machines and parts of machines, attachments, and replacements which are used or manufactured for use on or in the operation of the machines, which are necessary to the operation of the machines, and which are customarily used in that way. 'Machines used in research and development' means machines used directly and primarily in research and development, in the experimental or laboratory sense, of new products, new uses for existing products, or improvement of existing products.;
(57)[Reserved](a) sales taking place during a period beginning 12:01 a.m. on the first Friday in August and ending at twelve midnight the following Sunday of:
(i) clothing;
(ii) clothing accessories including, but not limited to, hats, scarves, hosiery, and handbags;
(iii) footwear;
(iv) school supplies including, but not limited to, pens, pencils, paper, binders, notebooks, books, bookbags, lunchboxes, and calculators;
(v) computers, printers and printer supplies, and computer software.;
(b) the exemption allowed by this item does not apply to:
(i) sales of jewelry, cosmetics, eyewear, wallets, and watches;
(ii) sales of furniture;
(iii) a sale of an item placed on layaway or similar deferred payment and delivery plan however described;
(iv) rental of clothing or footwear;
(v) a sale or lease of an item for use in a trade or business.;
(c) before July tenth of each year, the department shall publish and make available to the public and retailers a list of those articles qualifying for the exemption allowed by this item.;
(58) [Reserved]cooperative direct mail promotional advertising materials delivered by means of interstate carrier, a mailing house, or a United States Post Office to residents of this State from locations both inside and outside the State. For purposes of this item, "cooperative direct mail promotional advertising materials" means discount coupons, advertising leaflets, and similar printed advertising, including any accompanying envelopes and labels which are distributed with promotional advertising materials of more than one business in a single package to potential customers, at no charge to the potential customer, of the businesses paying for the delivery of the material.
(59) [Reserved]facilities for transmitting electricity that is transferred, sold, or exchanged by electrical utilities, municipalities, electric cooperatives, or political subdivisions to a limited liability company which is subject to regulation under the Federal Power Act (16 U.S.C. Section 791(a)) and which is formed to operate or to take functional control of electric transmission assets as defined in the Federal Power Act;
(60) [Reserved]a lottery ticket sold pursuant to Chapter 150 of Title 59;
(61) copies of or access to legislation or other informational documents provided to the general public or any other person by a legislative agency when a charge for these copies is made reflecting the agency's cost of the copies.;"
SECTION 9. Chapter 37 of Title 12 of the 1976 Code is amended by adding:
"Section 12-37-253. (A) After the exemption allowed pursuant to Section 12-37-250 and Section 12-37-251, any remaining fair market value otherwise subject to tax is exempt from all school taxes except taxes:
(1) levied for bonded indebtedness for capital construction for schools;
(2) levied to make payments pursuant to a lease purchase agreement or other financing instrument for capital construction for schools; and
(3) levied for school operations sufficient to prevent any decline in the district's operating budget from state funds and property taxes from fiscal year 2002-2003 to 2003-2004. Millage for fiscal year 2003-2004 to prevent a reduction and fund teacher salaries may not be increased in subsequent years, and it must be decreased in subsequent years through millage adjustments by a dollar amount equal to one-half of the new revenue provided to the district from EFA distributions and the School Trust Fund for those years. It must also be decreased to reflect any rollback resulting from reassessment.
(B) School districts must be paid monthly from revenues credited to the School Trust Fund for a fiscal year for the exemption allowed by this section in an amount that is the district's proportionate share of School Trust Fund revenues based on the district's weighted pupil units as a percentage of statewide weighted pupil units as determined annually pursuant to the Education Finance Act. The School Trust Fund revenues that must be paid to school districts comprise the total of the following amounts:
(1) the revenue of the taxes imposed pursuant to Section 12-36-1110;
(2) one dollar and fifteen cents of the additional documentary stamp tax imposed pursuant to Section 12-24-10(B);
(3) annual sales, use and casual excise tax revenue attributable to the exemptions and caps deleted or revised as of July 1, 2003; and
(4) the General Assembly expresses its intent to fund annual growth in School Trust Fund revenues at least equal to the increase in the Consumer Price Index and state population each year.
(C) Notwithstanding any other provision of law, property exempted from property taxation in the manner provided in this section is considered taxable property for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State.
(D) The exemption provided by this section applies for property taxes imposed by any property taxing entity if the revenues of taxes imposed by the entity are used directly or indirectly for school operations."
SECTION 10. Notwithstanding any other provisions of law, the South Carolina Public Service Commission shall order reductions on regulated utility rates charged customers of public utilities with rates regulated by the commission sufficient to reflect the net reduced property tax paid by these utilities.
SECTION 11. Section 59-20-40(1)(c) of the 1976 Code, as last amended by Act 429 of 1996, is further amended to read:
"(c) Weightings, used to provide for relative cost differences, between programs for different students are established in order that funds may be equitably distributed on the basis of pupil needs. The criteria for qualifications for each special classification must be established by the State Board of Education according to definitions established in this article and in accordance with Sections 59-21-510, 59-35-10, 59-53-1860, and 59-53-1900. Cost factors enumerated in this section must be used to fund programs approved by the State Board of Education. Pupil data received by the Department of Education is subject to audit by the department. Cost factors or weightings are as follows:
Pupil Classification Weightings
(1) Kindergarten pupils 1.30
(2) Primary pupils (grades 1 through 3) 1.24
(3) Elementary pupils (grades 4 through 8)
base students 1.00
(4) High school pupils (grades 9
through 12) 1.25
Special Programs for
Exceptional Students Weightings
(5) Handicapped 1.74
a. Educable mentally handicapped pupils
b. Learning disabilities pupils
(6) Handicapped 2.04
a. Trainable mentally handicapped pupils
b. Emotionally handicapped pupils
c. Orthopedically handicapped pupils
(7) Handicapped 2.57
a. Visually handicapped pupils
b. Hearing handicapped pupils
c. Pupils with autism.
(8) Speech handicapped pupils 1.90
(9) Homebound pupils 2.10
Vocational technical Programs Weightings
(10) Pre-vocational 1.20
(11) Vocational 1.29
Add-on Weights for Early Childhood
Development and Academic Assistance Weightings
(12) Early Childhood Assistance 0.26
(13) Grades 4-12
Academic Assistance 0.114
Adult Education
(14) Adult Education 0.15
(5) Trainable Mentally Handicapped 2.04
(6) Speech Handicapped 1.90
(7) Homebound 2.10
(8) Emotionally Handicapped 2.04
(9) Educable Mentally Handicapped 1.74
(10) Learning Disabilities 1.74
(11) Hearing Handicapped 2.57
(12) Visually Handicapped 2.57
(13) Orthopedically Handicapped 2.04
(14) Vocational (Grades 9-12) 1.29
(15) Autism 2.57
No local match is required for adult education and the number of weighted pupil units funded depends on funding available from the general fund of the State and the Education Improvement Act of 1984 Fund.
Each student in the State must be counted in only one of the first eleven pupil classifications. Students shall generate funds for early childhood assistance and grades 4-12 academic assistance in accordance with Section 59-139-20. The State Board of Education must determine the qualifications for each classification in accordance with Sections 59-21-510, 59-35-10, 59-53-1860, 59-53-1900, and Chapter 30 of this title. The program for each classification must meet specifications approved by the State Board of Education.
School districts may count each student who is instructed at home under the provisions of Section 59-65-40 in the district's weighted pupil units at a weighting of .25 for supervising, overseeing, or reviewing the student's program of home instruction. No local match is required for students instructed at home under the provisions of Section 59-65-40."
SECTION 12. Chapter 20 of Title 59 of the 1976 Code is amended by adding:
"Section 59-20-42. (A) Notwithstanding any other provision of law, beginning with fiscal year 2003-2004, Education Finance Act appropriations and employer contributions shall be distributed to a school district in an amount that is the district's proportionate share of such funds based on the district's weighted pupil units as a percentage of statewide weighted pupil units as determined annually pursuant to the Education Finance Act.
(B) It is the intent of the General Assembly that funding for weighted pupil unit growth for Education Finance Act purposes shall be at least equal to the growth in the Consumer Price Index each year.
(C) Beginning July 1, 2003, a base student cost shall no longer be established annually by the General Assembly nor shall the Division of Research and Statistics calculate an annual inflation factor as required by Section 59-20-40(1)(b)."
SECTION 13. Notwithstanding any other provision of law:
(1) all state revenues from any source the distribution of which is not otherwise provided for in this act, except for Education Accountability Act funds, to be distributed to school districts shall be distributed in an amount that is the district's proportionate share of such funds based on the district's weighted pupil units as a percentage of statewide weighted pupil units as determined annually pursuant to the Education Finance Act; and
(2) each school district from all funds distributed to it from state sources as funded by the General Assembly, except the Education Accountability Act, shall receive the sum of five thousand dollars per weighted pupil unit.
SECTION 14. Notwithstanding the provisions of Section 6-1-320 of the 1976 Code, for a period of three years beginning July 1, 2003, and ending June 30, 2008, a local governing body pursuant to Article 3, Chapter 1 of Title 6, and if otherwise permitted to do so by law may increase the millage rate imposed for general operating purposes above the rate imposed for such purposes for the preceding tax year only by a two-thirds vote of the membership of the governing body, present or not, rather than by a positive majority vote as defined therein. If there is a vacancy in the membership of the governing body, a two-thirds vote of the membership of the governing body as constituted on the date of the vote is required.
SECTION 15. (A) Article 3, Chapter 10 of Title 4 and Chapter 37 of Title 4 of the 1976 Code are repealed; provided, however, that the special sales taxes authorized before the effective date of this section to support capital projects under Article 3, Chapter 10 of Title 4 and the special sales taxes or tolls authorized before the effective date of this section to support transportation infrastructure projects under Chapter 37 of Title 4 shall continue until their termination date to provide financing or debt service funding for the projects authorized.
(B) In those counties in which is imposed on the effective date of this act the local sales and use tax allowed pursuant to Article 1, Chapter 10, Title 4 of the 1976 Code, there must be conducted a referendum held on the Tuesday following the first Monday in November following such effective date on rescinding the tax in the county as provided in Section 4-10-35 of the 1976 Code, without regard to the petition requirements provided therein. If a majority of the qualified electors voting in the referendum favor rescinding the tax, the tax is rescinded on a date determined by the governing body of the county not more than twenty-four months following the date the result of the referendum is certified to county council. The governing body of the county shall notify the Department of Revenue of the date the tax is rescinded.
SECTION 16. This act takes effect July 1, 2003, and for purposes of the tax exemption allowed pursuant to Section 12-37-253 of the 1976 Code as amended by this act, applies for property tax years beginning after 2003 and motor vehicle tax years beginning after June 30, 2003.
This web page was last updated on Thursday, June 25, 2009 at 9:49 A.M.