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Indicates Matter Stricken
Indicates New Matter
April 19, 2005
Introduced by Reps. Vaughn, Cato, Scott, Haskins, Leach, Cobb-Hunter, Whipper, Rutherford, Taylor, Battle, Branham, J. Brown, Ceips, Chalk, Cooper, Hagood, Howard, Jennings, Lee, Limehouse, Littlejohn, Mack, Martin, McCraw, McGee, Miller, Moody-Lawrence, J.H. Neal, Rice, J.E. Smith and W.D. Smith
S. Printed 4/19/05--H.
Read the first time January 25, 2005.
To whom was referred a Bill (H. 3350) to amend the Code of Laws of South Carolina, 1976, by adding Article 7 to Chapter 10, Title 4 so as to provide for the imposition of a one percent, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking Section 4-10-740(A)(1)(f) and (g), as contained in Section 1, page 2 and inserting:
/ (f) acquisition of land for active and passive recreational needs, preservation of historic sites, protection of natural resources, and public facilities;
(g) beach access and beach renourishment;
(h) jointly operated projects of the municipality, county, special purpose district, and school district, or any combination of those entities, for the projects delineated in subitems (a) through (g) of this subsection;
(i) any combination of the projects described in subitems (a) through (h) of this item; /
Renumber sections to conform.
Amend title to conform.
ROBERT W. HARRELL, JR. for Committee.
This bill is not expected to have any impact on state revenues. Until a municipality proposes a capital project sales tax, we will not be able to estimate the local revenue impact.
Under current law, counties, by ordinance, subject to a referendum, may impose one-percent sales and use tax to fund certain capital projects. According to data from the Department of Revenue, seven counties are imposing a Capital Projects Tax. This bill would allow the municipalities to impose, by ordinance, subject to a referendum a sales and use tax to defray debt service on bonds issued to pay for projects authorized in this article. The tax would be imposed for a specific purpose or purposes and for a limited amount of time to collect a limited amount of money. However, this bill does not increase or decrease any existing revenues.
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact by the BEA, or Section 2-7-76 for a local revenue impact or Section 6-1-85(B) for an estimate of the shift in local property tax incidence by the Office of Economic Research.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 7 TO CHAPTER 10, TITLE 4 SO AS TO PROVIDE FOR THE IMPOSITION OF A ONE PERCENT SALES AND USE TAX BY REFERENDUM IN A MUNICIPALITY FOR A SPECIFIC PERIOD OF TIME AND FOR SPECIFIC PROJECTS, AND TO PROVIDE THE METHOD FOR IMPOSITION, PAYMENT, AND COLLECTION OF THIS TAX.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 10, Title 4 of the 1976 Code is amended by adding:
Section 4-10-710. This article may be cited as the 'Municipal Capital Project Sales Tax Act'.
Section 4-10-720. Subject to the requirements of this article, the municipal governing body may impose a one percent sales and use tax by ordinance, subject to a referendum, within the municipality for a specific purpose or purposes and for a limited amount of time to collect a limited amount of money. The revenues collected pursuant to this article may be used to defray debt service on bonds issued to pay for projects authorized in this article.
Section 4-10-730. The governing body of a municipality must consider proposals for funding capital projects within the municipality and formulate the referendum question that is to appear on the ballot pursuant to Section 4-10-740(D).
Section 4-10-740. (A) The sales and use tax authorized by this article is imposed by an enacting ordinance of the municipal governing body containing the ballot question formulated by its governing body pursuant to Section 4-10-730, subject to referendum approval in the municipality. The ordinance must specify:
(1) the purpose for which the proceeds of the tax are to be used, which may include projects located within or without, or both within and without, the boundaries of the municipality and may include the following types of projects:
(a) highways, roads, streets, and bridges;
(b) administration buildings, civic centers, hospitals, emergency medical facilities, police stations, fire stations, jails, correctional facilities, detention facilities, libraries, coliseums, parking facilities, or any combination of these projects;
(c) cultural, recreational, or historic facilities, or any combination of these facilities;
(d) water, sewer, or water and sewer projects;
(e) flood control projects and storm water management facilities;
(f) jointly operated projects of the municipality, county, special purpose district, and school district, or any combination of those entities, for the projects delineated in subitems (a) through (e) of this subsection;
(g) any combination of the projects described in subitems (a) through (f) of this item;
(2) the maximum time, stated in terms of calendar or fiscal years or quarters, or a combination thereof, not to exceed seven years from the date of imposition, for which the tax may be imposed;
(3) the maximum cost of the project or facilities funded from proceeds of the tax and the maximum amount of net proceeds to be raised by the tax; and
(4) any other condition precedent, as determined by the commission, to the imposition of the sales and use tax authorized by this article or condition or restriction on the use of sales and use tax revenue collected pursuant to this article.
(B) When the tax authorized by this article is imposed for more than one purpose, the enacting ordinance must set forth the priority in which the net proceeds are to be expended for the purposes stated. The enacting ordinance may set forth a formula or system by which multiple projects are funded simultaneously.
(C) Upon receipt of the ordinance, the municipal election commission must conduct a referendum on the question of imposing the sales and use tax in the municipality. A referendum for this purpose must be held at the time of the general election. Two weeks before the referendum the election commission must publish in a newspaper of general circulation the question that is to appear on the ballot, with the list of projects and the cost of the projects. This notice is in lieu of any other notice otherwise required by law.
(D) The referendum question to be on the ballot must read substantially as follows:
'Must a special one percent sales and use tax be imposed in (municipality) for not more than (time) to raise the amounts specified for the following purposes?
(1) $________ for __________
(2) $________ for __________
(E) All qualified electors desiring to vote in favor of imposing the tax for the stated purposes shall vote 'yes' and all qualified electors opposed to levying the tax shall vote 'no'. If a majority of the votes cast are in favor of imposing the tax, then the tax is imposed as provided in this article and the enacting ordinance. A subsequent referendum on this question must be held on the date prescribed in subsection (C). The election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the result no later than November thirtieth to the municipal governing body and to the Department of Revenue.
(F) Upon receipt of the returns of the referendum, the municipal governing body, by resolution, must declare the results of the referendum. In this event, the results of the referendum, as declared by resolution of the municipal governing body, are not open to question except by a suit or proceeding instituted within thirty days from the date the resolution is adopted.
Section 4-10-750. (A) If the sales and use tax is approved in the referendum, the tax is imposed on the first of May following the date of the referendum. If the certification is not timely made to the Department of Revenue, the imposition is postponed for twelve months.
(B) The tax terminates on the earlier of:
(1) the final day of the maximum time period specified for the imposition; or
(2) the end of the calendar month during which the Department of Revenue determines that the tax has raised revenues sufficient to provide the net proceeds equal to or greater than the amount specified in the referendum question.
(C) Amounts collected in excess of the required net proceeds must first be applied, if necessary, to complete a project for which the tax was imposed; otherwise, the excess funds must be credited to the general fund of the municipality.
Section 4-10-760. (A) The tax levied pursuant to this article must be administered and collected by the Department of Revenue in the same manner that other sales and use taxes are collected. The department may prescribe amounts that may be added to the sales price because of the tax.
(B) The tax authorized by this article is in addition to all other local sales and use taxes and applies to the gross proceeds of sales in the applicable area that is subject to the tax imposed by Chapter 36 of Title 12 and the enforcement provisions of Chapter 54 of Title 12. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36 of Title 12 are exempt from the tax imposed by this article. The tax imposed by this article also applies to tangible personal property subject to the use tax in Article 13, Chapter 36 of Title 12.
(C) A taxpayer required to remit taxes under Article 13, Chapter 36 of Title 12 must identify the municipality in which the personal property purchased at retail is stored, used, or consumed in this State.
(D) A utility is required to report sales in the municipality in which the consumption of the tangible personal property occurs.
(E) A taxpayer subject to the tax imposed by Section 12-36-920, who owns or manages rental units in more than one municipality, must report separately in his sales tax return the total gross proceeds from business done in each municipality.
(F) The gross proceeds of sales of tangible personal property delivered after the imposition date of the tax levied under this article in a municipality, either under the terms of a construction contract executed before the imposition date, or a written bid submitted before the imposition date, culminating in a construction contract entered into before or after the imposition date, are exempt from the sales and use tax provided in this article if a verified copy of the contract is filed with the Department of Revenue within six months after the imposition date of the sales and use tax provided for in this article.
(G) Notwithstanding the imposition date of the sales and use tax authorized pursuant to this chapter, with respect to services that are billed regularly on a monthly basis, the sales and use tax authorized pursuant to this article is imposed beginning on the first day of the billing period beginning on or after the imposition date.
Section 4-10-770. The revenues of the tax collected under this article must be remitted to the Department of Revenue and placed on deposit with the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of any refunds made and costs to the Department of Revenue of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the municipal treasurer and the revenues must be used only for the purposes stated in the imposition ordinance. The State Treasurer may correct misallocations by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocations. However, allocations made as a result of city or county code errors must be corrected prospectively.
Section 4-10-780. The Department of Revenue shall furnish data to the State Treasurer and to the municipal treasurers receiving revenues for the purpose of calculating distributions and estimating revenues. The information that must be supplied to municipalities upon request includes, but is not limited to, gross receipts, net taxable sales, and tax liability by taxpayers. Information about a specific taxpayer is considered confidential and is governed by the provisions of Section 12-54-240. A person violating this section is subject to the penalties provided in Section 12-54-240.
Section 4-10-790. Annually, and only in the month of June, funds collected by the department from the municipal option capital project sales tax, which are not identified as to the governmental unit due the tax, must be transferred, after reasonable effort by the department to determine the appropriate governmental unit, to the State Treasurer's Office. The State Treasurer shall distribute these funds to the municipal treasurer and the revenues must be used only for the purposes stated in the imposition ordinance."
SECTION 2. This act takes effect upon approval by the Governor.
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