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TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-6-537 SO AS TO PROVIDE A MAXIMUM FIVE PERCENT STATE INCOME TAX RATE PHASED IN OVER SIX TAXABLE YEARS ON SOUTH CAROLINA TAXABLE INCOME RECEIVED BY A TAXPAYER IN THE TAXPAYER'S CAPACITY AS A SOLE PROPRIETOR OF A BUSINESS, A SHAREHOLDER OF A SUBCHAPTER "S" CORPORATION, PARTNER IN A PARTNERSHIP, OR MEMBER OF A LIMITED LIABILITY COMPANY.
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 12-6-537. (A) Notwithstanding the rates imposed pursuant to Section 12-6-510, a maximum rate of tax as provided in subsection (B) of this section applies to South Carolina taxable income received by or attributed to a taxpayer as a result of the taxpayer's status as a:
(1) sole proprietor of a business;
(2) shareholder of a subchapter 'S' corporation;
(3) partner in a partnership; or
(4) member of a limited liability company.
(B) Taxable Year Maximum Rate of Tax
2005 6.67 percent
2006 6.34 percent
2007 6.00 percent
2008 5.67 percent
2009 5.34 percent
After 2009 5.00 percent
The special rate allowed by this section does not apply for a guaranteed payment to a partner for personal service rendered by the partner for the partnership."
SECTION 2. This act takes effect upon approval by the Governor
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