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AMENDED
February 2, 2005
H. 3007
Introduced by Reps. Wilkins, W.D. Smith, Harrell, Cato, Chellis, Harrison, Townsend, Witherspoon, G.R. Smith, Vaughn, Sandifer, Coates, Barfield, Young, Kirsh, Leach, E.H. Pitts, Battle, Viers, Clyburn, Littlejohn, Taylor, Rice, Hinson, Clark, Walker, Bales, Simrill, Mahaffey, Toole, Talley, Umphlett, Brady, Bailey, Hagood, Edge, Clemmons, Huggins, Neilson, Vick and Delleney
S. Printed 2/2/05--H.
Read the first time January 11, 2005.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-6-515 SO AS TO REDUCE THE SEVEN PERCENT TOP MARGINAL RATE OF SOUTH CAROLINA INDIVIDUAL INCOME TAX IN EQUAL ANNUAL INCREMENTS OF .225 PERCENT UNTIL A PERMANENT TOP MARGINAL RATE EQUAL TO 4.75 PERCENT IS ACHIEVED AND TO PROVIDE THAT A SCHEDULED REDUCTION IS POSTPONED IF GENERAL FUND REVENUE GROWTH FOR THE APPLICABLE FISCAL YEAR IS LESS THAN TWO PERCENT.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Article 5, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-515. (A) Notwithstanding the rates of taxes imposed pursuant to Section 12-6-510, beginning with taxes due for the 2006 taxable year and continuing each taxable year thereafter, the then applicable top marginal rate of income tax imposed by that section is reduced by .225 until the top marginal rate of income tax attains a permanent rate of 4.75 percent. The department shall make the necessary adjustments to the rates and the brackets otherwise applicable pursuant to Section 12-6-510.
(B) Notwithstanding the scheduled reductions in the top marginal income tax rate provided in subsection (A) of this section, beginning with the top marginal rate applicable for taxable year 2007, the reduction otherwise scheduled must not be made for that taxable year if estimated general fund revenue growth as established in the February fifteenth revenue forecast of the Board of Economic Advisors is less than two percent of the most recent estimate by the board of general fund revenues for the current fiscal year. No reduction in the top marginal rate made pursuant to this section may exceed .225 for any one taxable year.
In addition, no reductions in the income tax rates provided for in this section for any taxable year may occur unless the Board of Economic Advisors certifies that sufficient general fund revenues for the fiscal year immediately following the reduction will remain available for the General Assembly in the annual general appropriations act for that year to maintain K-12 education funding at the level of the previous year.
In addition, no reductions in the income tax rates provided for in this section for any taxable year may occur unless the Board of Economic Advisors certifies that sufficient general fund revenues for the fiscal year immediately following the reduction will remain available for the General Assembly in the annual general appropriations act for that year to maintain law enforcement funding at the level of the previous year."
SECTION 2. Section 12-6-520 of the 1976 Code is amended to read:
"Section 12-6-520. Each December 15, the department shall cumulatively adjust the brackets in Section 12-6-510 in the same manner that brackets are adjusted in Internal Revenue Code Section (1)(f). However, the adjustment is limited to one-half of the adjustment determined by Internal Revenue Code Section (1)(f), may not exceed four percent a year, and the rounding amount provided in (1)(f)(6) is ten dollars. The brackets, as adjusted, apply in lieu of those provided in Section 12-6-510 for taxable years beginning in the succeeding calendar year. Inflation adjustments must be made cumulatively to the income tax brackets."
SECTION 3. Section 1 of this act takes effect January 1, 2006. Section 2 of this act takes effect upon approval of this act by the Governor and first applies for bracket adjustments calculated for taxable year 2006.
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