South Carolina General Assembly
116th Session, 2005-2006

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Bill 3773

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COMMITTEE REPORT

May 17, 2006

H. 3773

Introduced by Reps. Vick, W.D. Smith, Littlejohn, Agnew, Ballentine, Haley, Lucas, Ott, Hardwick, Witherspoon, Cobb-Hunter and Anderson

S. Printed 5/17/06--S.

Read the first time May 11, 2005.

            

THE COMMITTEE ON FINANCE

To whom was referred a Bill (H. 3773) to amend Section 12-36-2120, as amended, Code of Laws of South Carolina, 1976, relating to sales tax exemptions, so as to exempt from sales tax the gross proceeds of sales or sales price of gold, etc., respectfully

REPORT:

That they have duly and carefully considered the same and recommend that the same do pass:

HUGH K. LEATHERMAN, SR. for Committee.

            

STATEMENT OF ESTIMATED FISCAL IMPACT

REVENUE IMPACT 1/

This bill is expected to reduce general fund revenue by an estimated $82,860 in FY2005-06. Of this amount, general fund sales and use tax revenue would be reduced by $66,288 and E.I.A. funds would be reduced by $16,572 in FY2005-06.

Explanation

This bill would amend Section 12-36-2120 of the Code of Laws of South Carolina to add a sales and use tax exemption on the sale of gold, silver, platinum bullion, or any combination of the bullion. This bill would also exempt the sales of coins and currency from the sales and use tax. The State of Georgia has a similar sales and use tax exemption on the same items. The sale of gold, silver, and platinum bullion by commodity brokers and investment bankers on the commodity exchanges does not require the remittance of sales tax for the service of buying or investing in the metals. These negotiations are regarded as "paper transactions" and do not require the acceptance or delivery of the actual product. According to the latest data from U.S. Department of Commerce, Bureau of the Census, sales of coins and other numismatic items by jewelry stores and coin-dealer retail stores in the state amounted to nearly $1,300,000 of retail sales. After adjusting for inflation and multiplying these retail sales by a sales and use tax rate of five percent yields an estimated $82,860 in sales and use tax revenue in FY2005-06.

Approved By:

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.

A BILL

TO AMEND SECTION 12-36-2120, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SALES TAX EXEMPTIONS, SO AS TO EXEMPT FROM SALES TAX THE GROSS PROCEEDS OF SALES OR SALES PRICE OF GOLD, SILVER, AND PLATINUM BULLION, COINS, AND CURRENCY AND TO REQUIRE THE RETAILER TO MAINTAIN PROPER DOCUMENTATION AS REQUIRED BY THE SOUTH CAROLINA DEPARTMENT OF REVENUE FOR EACH EXEMPT SALE.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Section 12-36-2120 of the 1976 Code is amended by adding an appropriately numbered new item at the end to read:

"( )(a)    gold, silver, or platinum bullion, or any combination of this bullion; and

(b)    coins or currency, or a combination of coins and currency.

The department shall prescribe documentation that must be maintained by retailers claiming the exemption allowed by this item. This documentation must be sufficient to identify each individual sale for which the exemption is claimed."

SECTION    2.    This act takes effect July 1, 2005.

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