South Carolina General Assembly
116th Session, 2005-2006

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S. 69

STATUS INFORMATION

General Bill
Sponsors: Senators Thomas, McConnell, Cromer, Knotts, Hawkins, Grooms, O'Dell, Fair, Mescher, Bryant and Verdin
Document Path: l:\council\bills\ggs\22828htc05.doc

Introduced in the Senate on January 11, 2005
Currently residing in the Senate Committee on Finance

Summary: Sales and use tax increase

HISTORY OF LEGISLATIVE ACTIONS

     Date      Body   Action Description with journal page number
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   12/8/2004  Senate  Prefiled
   12/8/2004  Senate  Referred to Committee on Finance
   1/11/2005  Senate  Introduced and read first time SJ-113
   1/11/2005  Senate  Referred to Committee on Finance SJ-113

View the latest legislative information at the LPITS web site

VERSIONS OF THIS BILL

12/8/2004

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 11 IN CHAPTER 36 OF TITLE 12 SO AS TO IMPOSE AN ADDITIONAL STATE SALES AND USE TAX EQUAL TO TWO PERCENT AND TO REIMBURSE PROPERTY TAXING ENTITIES FOR PROPERTY TAX CREDITS ALLOWED AGAINST PROPERTY TAXES ON MOTOR VEHICLES AND MOTORCYCLES AND OWNER-OCCUPIED RESIDENTIAL PROPERTY; TO AMEND CHAPTER 37; TITLE 12, BY ADDING ARTICLE 25 SO AS TO PROVIDE A PROPERTY TAX CREDIT AGAINST PROPERTY TAX FOR OPERATING PURPOSES OTHERWISE DUE ON PRIVATE PASSENGER MOTOR VEHICLES AND MOTORCYCLES AND OWNER-OCCUPIED RESIDENTIAL PROPERTY AND PROVIDE THE METHOD OF CALCULATING THE CREDITS AND THE REIMBURSING OF PROPERTY TAXING ENTITIES FOR THE PROPERTY TAX NOT COLLECTED BECAUSE OF THE CREDITS; TO AMEND SECTION 6-1-320, RELATING TO THE LIMITS ON ANNUAL INCREASES IN LOCAL GOVERNMENT AND SCHOOL DISTRICT PROPERTY TAX MILLAGE, SO AS TO REQUIRE ALL INCREASES, INCLUDING ADJUSTMENTS FOR INFLATION, TO BE APPROVED IN A REFERENDUM HELD AT THE TIME OF THE GENERAL ELECTION, AND TO PROVIDE TRANSITIONAL PROVISIONS AND EFFECTIVE DATES.

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:

"Article 11

Additional Sales and Use Tax

Section 12-36-1110.    (A)    An additional tax equal to two percent is imposed on amounts taxable pursuant to this chapter, but this tax does not apply to items subject to a maximum tax pursuant to Section 12-36-2110. The Department of Revenue shall prescribe amounts that may be added to sales price as a result of this additional tax. The tax imposed pursuant to this article must be reported, paid, collected, and enforced in the manner that the taxes imposed pursuant to Articles 9 and 13 of this chapter are reported, paid, collected, and enforced.

(B)    Notwithstanding any other provision of law providing for the use of sales and use tax revenue, all revenue of the tax imposed pursuant to this section must be credited to a fund in the State Treasury separate and distinct from the general fund and all other funds styled the Property Tax Credit Reimbursement Fund. Earnings on this fund must be credited to it and any unexpended balance in this fund at the end of a fiscal year remains in the fund and is carried forward in the fund to the succeeding fiscal year and must be used for the same purposes. Revenue collected pursuant to this section must not be considered in any formula providing for minimum appropriations. Revenue in the fund must be used each fiscal year as follows:

(1)    An amount necessary is allocated for the credits replacing the LOST credits pursuant to Section 12-37-3010(E).

(2)    The remaining revenue must be distributed as follows:

(a)    Fifty-five percent must be paid to county treasurers and used to reimburse local property taxing entities for the credit allowed pursuant to Section 12-37-3010(A);

(b)    Forty-five percent must be paid to county treasurers and used to reimburse local property taxing entities for the credit allowed pursuant to Section 12-37-3010(B).

(3)    The payments pursuant to item (2)(a) of this section must be distributed by the Comptroller General monthly to counties in the proportion that the total of assessed value of private passenger motor vehicles and motorcycles in the county is of the total of such assessed value statewide updated annually. The payments pursuant to item (2)(b) of this section must be distributed by the Comptroller General to counties on a per capita basis using the most recent United States Census annual population data. The payments must be scheduled in six equal installments beginning in January of each year. In no case may the reimbursement paid for 2004 result in a reimbursement equaling less than the revenue derived in the county from property taxes of owner-occupied residential property and motor vehicles and motorcycles in the county in 2004 and for distributions after 2005, a county's reimbursement must equal at least the amount of its prior-year reimbursement pursuant to this item. Distributions to counties receiving an increased distribution must be proportionately reduced to meet this minimum distribution requirement. This minimum distribution requirement does not apply in a year in which revenues of the tax imposed pursuant to this section are less than the revenue of this tax in the previous year."

SECTION 2.    Chapter 37, Title 12 of the 1976 Code is amended by adding:

"Article 25

Property Tax Credit

Section 12-37-3010(A)    There is allowed a credit against the property tax due on a private passenger motor vehicle as defined in Section 56-3-630 and a motorcycle, but the credit does not apply to:

(1)    property taxes imposed for bonded indebtedness for capital construction and property taxes imposed to make payments pursuant to a lease-purchase agreement or other financing instruments for capital construction; and

(2)    property tax millage imposed for operating purposes in excess of the amount of such millage imposed by a property taxing entity for property tax year 2004.

(B)    There is allowed a credit as calculated pursuant to this section against any remaining property tax due after the exemptions allowed pursuant to Sections 12-37-250 and 12-37-251 on an owner-occupied residence classified for property tax purposes pursuant to Section 12-43-220(c) but the credit does not apply to:

(1)    property taxes imposed for bonded indebtedness for capital contributions and property tax imposed to payments pursuant to a lease-purchase agreement or other financing instruments for capital construction;

(2)    property tax millage imposed for operating purposes in excess of the amount of such millage imposed by a property taxing entity for property tax year 2004.

(C)    The millage rate that is the subject of the limitation imposed pursuant to subsection (A)(2) and (B)(2) must be adjusted after reassessments to an equivalent millage rate as the Department of Revenue shall prescribe.

(D)(1)    The credit allowed pursuant to subsection (A) of this section is an amount determined by multiplying the amount received by the county pursuant to Section 12-36-1110(B)(3)(a) in a fiscal year by a fraction in which the assessed value of the vehicle is the numerator and the assessed value of all eligible vehicles in the county is the denominator. This credit and the reimbursement for it is allocated to property taxing entities in the proportion that the tax resulting from the millage against which the credit is allowed is of the total of such tax on the vehicle.

(2)    The credit allowed pursuant to subsection (B) of this section is an amount determined by multiplying the amount received by the county pursuant to Section 12-36-1110(B)(3)(b) by a fraction in which the tax to which the credit applies remaining due on the eligible residence after other exemptions are applied is the numerator and the tax remaining is due on all eligible residences in the county after other exemptions are applied is the denominator. This credit and the reimbursement for it is allocated to property taxing entities in the proportion that the entity's tax eligible for credit remaining due on the residence is of the total of such tax due on the residence.

(E)    In a county area in which is imposed the local option sales tax pursuant to Article 1, Chapter 10 of Title 4 (LOST) on July 1, 2005, where the credits allowed pursuant to this subsection overlap with the credits allowed pursuant to LOST, the credit allowed by this section replaces the credit allowed pursuant to LOST and the amount of the LOST credit is deemed a distribution from the LOST County/Municipal Revenue Fund. If the LOST is imposed in a county after June 30, 2005, the credit allowed by this section applies only to tax liability remaining after applying the LOST credit and the amount of unused credit provided pursuant to this section is credited back to the Property Tax Credit Reimbursement Fund."

SECTION 3.A.    Section 6-1-320(A) of the 1976 Code, as amended by Act 114 of 1999, is further amended to read:

"(A) Notwithstanding Section 12-37-251(E), A local governing body may not 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 consumer price index for 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."

B.    Section 6-1-320(C) of the 1976 Code, as added by Act 138 of 1997, is amended to read:

"(C)    The millage rate limitation provided for in subsection (A) of this section may be overridden and the millage rate may be further increased by a positive majority vote of the appropriate governing body. The vote must be taken at a specially-called meeting held solely for the purpose of taking a vote to increase the millage rate. The governing body must provide public notice of the meeting notifying the public that the governing body is meeting to vote to override the limitation and increase the millage rate. Public comment must be received by the governing body prior to the override vote upon a favorable vote of a majority of the qualified electors of the jurisdiction voting in a referendum held for this purpose. An election held pursuant to this subsection may be held only at the time of the general election."

SECTION    4.    The General Assembly finds that the payments to counties pursuant to the provisions of Section 12-36-1110(B)(1) and (2) of the 1976 Code, as added by this act, considered in combination with amendments to Section 6-1-320 of the 1976 Code as amended in this act, do not reduce the authority of counties to raise revenue in the aggregate and therefore the provisions of this act are not subject to the super majority requirements of Section 4-9-55(B) of the 1976 Code.

SECTION    5.    With respect to the tax imposed pursuant to Article 11, Chapter 36, Title 12 of the 1976 Code, as added by subsection A of this section, the provisions of Section 4-10-350(F) and (G) of the 1976 Code apply, mutatis mutandis.

SECTION    6.    Sections 1 and 5 of this act take effect July 1, 2005. The provisions of Section 12-37-3010(A) of the 1976 Code, as contained in Section 2 of this act, take effect upon approval of this act by the Governor and apply for motor vehicle property tax years beginning after December, 2005. The provisions of Section 12-37-3010(B) of the 1976 Code, as contained in Section 2 of this act take effect upon approval of this act by the Governor and apply for property tax years beginning after 2004. The remaining provisions of this act take effect upon approval of this act by the Governor.

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