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A116, R177, H3749
STATUS INFORMATION
General Bill
Sponsors: Reps. W.D. Smith, Mitchell, Kelly, Littlejohn, Mahaffey, Moss, Phillips, Talley and Walker
Document Path: l:\council\bills\dka\3246ssp07.doc
Companion/Similar bill(s): 243, 3146, 3649
Introduced in the House on March 20, 2007
Introduced in the Senate on March 22, 2007
Last Amended on June 21, 2007
Passed by the General Assembly on June 21, 2007
Governor's Action: June 27, 2007, Vetoed
Legislative veto action(s): Veto overridden
Summary: Job tax credit
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
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3/20/2007 House Introduced, read first time, placed on calendar without
reference HJ-38
3/21/2007 House Debate adjourned HJ-20
3/21/2007 House Read second time HJ-26
3/22/2007 House Read third time and sent to Senate HJ-19
3/22/2007 Senate Introduced and read first time SJ-8
3/22/2007 Senate Referred to Committee on Finance SJ-8
5/17/2007 Senate Committee report: Favorable with amendment Finance SJ-6
5/18/2007 Scrivener's error corrected
5/24/2007 Senate Committee Amendment Amended and Adopted SJ-71
5/25/2007 Scrivener's error corrected
5/31/2007 Senate Amended SJ-72
6/5/2007 Senate Read second time SJ-37
6/6/2007 Senate Amended SJ-35
6/6/2007 Senate Read third time and returned to House with amendments
SJ-35
6/7/2007 House Debate adjourned HJ-70
6/7/2007 House Senate amendment amended HJ-117
6/7/2007 House Returned to Senate with amendments HJ-117
6/7/2007 Senate Non-concurrence in House amendment SJ-101
6/7/2007 House House insists upon amendment and conference committee
appointed Reps. WD Smith, Kirsh, and Bingham HJ-156
6/7/2007 Senate Conference committee appointed Setzler, O'Dell, and
Alexander SJ-102
6/19/2007 House Rep. Talley replaces Rep. WD Smith on conference
committee HJ-18
6/20/2007 Scrivener's error corrected
6/20/2007 Senate Conference report adopted SJ-89
6/21/2007 House Conference report adopted HJ-5
6/21/2007 Senate Ordered enrolled for ratification SJ-26
6/21/2007 Ratified R 177
6/27/2007 Vetoed by Governor
6/28/2007 House Veto overridden by originating body Yeas-104 Nays-2
HJ-64
6/28/2007 Senate Veto overridden Yeas-44 Nays-1
7/13/2007 Copies available
7/13/2007 Effective date See Act for Effective Date
7/13/2007 Act No. 116
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
3/20/2007
3/20/2007-A
5/17/2007
5/18/2007
5/24/2007
5/25/2007
5/31/2007
6/6/2007
6/7/2007
6/20/2007
6/21/2007
(A116, R177, H3749)
AN ACT TO AMEND SECTION 12-10-80, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO JOB DEVELOPMENT CREDITS, SO AS TO ALLOW A TAXPAYER WHO QUALIFIES FOR THE JOB DEVELOPMENT CREDIT AND WHO IS LOCATED IN A MULTICOUNTY BUSINESS OR INDUSTRIAL PARK TO RECEIVE A CREDIT EQUAL TO THE AMOUNT DESIGNATED TO THE COUNTY WITH THE LOWEST DEVELOPMENT STATUS OF THE COUNTIES CONTAINING THE PARK IN CERTAIN CIRCUMSTANCES; TO AMEND SECTION 11-45-30, AS AMENDED, RELATING TO DEFINITIONS, SO AS TO CLARIFY THE DEFINITION OF "LENDER" AND PROVIDE A DEFINITION FOR "INTEREST"; TO AMEND SECTION 11-45-50, AS AMENDED, RELATING TO REQUIREMENTS FOR THE SUBMISSION OF INVESTMENT PLANS, SO AS TO PROVIDE CLARIFYING LANGUAGE; TO AMEND SECTION 11-45-55, RELATING TO TAX CREDIT CERTIFICATES, SO AS TO REQUIRE THAT THE SOUTH CAROLINA VENTURE CAPITAL AUTHORITY ESTABLISH GUIDELINES FOR PROCEDURES TO ISSUE TAX CREDITS AND DELETE THE REQUIREMENT THAT THE AUTHORITY ALSO ESTABLISH REGULATIONS; TO AMEND SECTION 11-45-70, AS AMENDED, RELATING TO VENTURE CAPITAL INVESTMENT REQUIREMENTS, SO AS TO ALLOW AN INVESTOR TO BE QUALIFIED IF HE PROVES THAT HE HAS MADE PRIOR INVESTMENTS IN SOUTH CAROLINA OR SOUTH CAROLINA-BASED COMPANIES; BY ADDING SECTION 11-45-105 SO AS TO REQUIRE THE STATE BUDGET AND CONTROL BOARD TO APPROVE GUIDELINES ISSUED BY THE AUTHORITY; TO AMEND SECTIONS 12-21-6520, AS AMENDED, 12-21-6540, AND 12-21-6590, ALL RELATING TO THE TOURISM INFRASTRUCTURE ADMISSIONS TAX ACT, SO AS TO EXTEND THE DEFINITION OF EXTRAORDINARY RETAIL ESTABLISHMENT, PROVIDE FOR A CONDITIONAL CERTIFICATION AS SUCH A FACILITY AND THE BENEFITS UNDER THE ACT, AND MAKE CONFORMING AMENDMENTS; TO AMEND SECTION 12-6-3415, AS AMENDED, RELATING TO THE RESEARCH AND DEVELOPMENT INCOME TAX CREDIT, SO AS TO ALLOW THE CREDIT TO BE CLAIMED AGAINST ALL INCOME TAXES; TO AMEND SECTION 12-20-105, AS AMENDED, RELATING TO CORPORATE LICENSE TAX CREDITS, SO AS TO REVISE ELIGIBILITY REQUIREMENTS; TO AMEND SECTION 4-1-175, AS AMENDED, RELATING TO THE AUTHORIZATION OF SPECIAL SOURCE REVENUE BONDS, SO AS TO REQUIRE A COUNTY, MUNICIPALITY, OR SPECIAL PURPOSE DISTRICT TO PROVIDE A CREDIT AGAINST OR PAYMENT DERIVED FROM THE REVENUES RECEIVED PURSUANT TO A PAYMENT IN LIEU OF TAXES; TO AMEND SECTIONS 4-12-30 AND 4-29-67, BOTH AS AMENDED, BOTH RELATING TO FEE IN LIEU OF PROPERTY TAXES, BOTH SO AS TO ALLOW AN APPLICABLE PIECE OF PROPERTY TO QUALIFY FOR THE ANNUAL FEE IN LIEU OF PROPERTY TAXES FOR AN ADDITIONAL TEN YEARS BY RESOLUTION OF THE COUNTY, TO EXTEND THE MAXIMUM TIME A PROJECT QUALIFIES FOR A FEE FROM THIRTY YEARS TO FORTY YEARS, TO DELETE THE REQUIREMENTS TO QUALIFY FOR A FOUR PERCENT ASSESSMENT RATIO THAT A SPONSOR MUST INVEST A TOTAL OF THREE HUNDRED MILLION DOLLARS WHEN ADDED TO PREVIOUS INVESTMENTS AND THAT A SPONSOR MUST CREATE TWO HUNDRED FULL-TIME JOBS AT A PROJECT INVESTING FOUR HUNDRED MILLION DOLLARS, AND TO DELETE THE REQUIREMENT THAT A DIRECT PAYMENT OF CASH MAY NOT BE MADE TO A SPONSOR BY A COUNTY, MUNICIPALITY, OR SPECIAL PURPOSE DISTRICT; TO AMEND SECTION 12-44-10, AS AMENDED, RELATING TO THE TITLE OF THE CHAPTER, SO AS TO DELETE THE DATE; TO AMEND SECTION 12-44-30, AS AMENDED, RELATING TO DEFINITIONS, SO AS TO LOWER THE REQUIREMENTS FOR AN ENHANCED INVESTMENT THAT A SPONSOR INVEST AT LEAST TWO HUNDRED MILLION DOLLARS AND CREATE TWO HUNDRED FULL-TIME JOBS TO ONE HUNDRED FIFTY MILLION DOLLARS AND ONE HUNDRED TWENTY-FIVE FULL-TIME JOBS, TO ALLOW A SPONSOR TO BE EXEMPT FROM THE NEW FULL-TIME JOBS REQUIREMENT IN CERTAIN CIRCUMSTANCES, TO ALLOW A SPONSOR TO APPLY FOR AN ADDITIONAL EXTENSION OF THE INVESTMENT PERIOD FOR ECONOMIC DEVELOPMENT PROPERTY, TO LOWER THE LEVEL OF INVESTMENT REQUIRED FOR A MINIMUM INVESTMENT FROM FIVE MILLION DOLLARS TO TWO AND ONE-HALF MILLION DOLLARS, AND TO ALLOW A COUNTY BY RESOLUTION TO EXTEND THE TERMINATION DATE OF A FEE AGREEMENT UP TO AN ADDITIONAL TEN YEARS; TO AMEND SECTION 12-44-40, AS AMENDED, RELATING TO FEE IN LIEU OF PROPERTY TAXES, SO AS TO CHANGE THE REQUIREMENT THAT A FEE AGREEMENT MUST BE EXECUTED WITHIN FIVE YEARS AFTER THE INDUCEMENT RESOLUTION IS ADOPTED BY THE COUNTY COUNCIL TO QUALIFY FOR STATUS AS ECONOMIC DEVELOPMENT PROPERTY AND INSTEAD REQUIRE THAT THE FEE AGREEMENT MUST BE ADOPTED WITHIN FIVE YEARS AFTER ACTION BY THE COUNTY IDENTIFYING OR REFLECTING THE PROJECT; TO AMEND SECTION 12-44-70, AS AMENDED, RELATING TO CREDITS AGAINST A FEE IN LIEU OF PROPERTY TAXES, SO AS TO DELETE THE REQUIREMENTS OF THIS SECTION AND ALLOW A COUNTY, MUNICIPALITY, OR SPECIAL PURPOSE DISTRICT TO PROVIDE CREDITS AGAINST THE FEE DUE FROM THE SPONSOR AND TO USE A PORTION OF THE FEES IT RECEIVES FOR SPECIFIED PURPOSES WITHOUT THE REQUIREMENTS OF ISSUING SPECIAL SOURCE REVENUE BONDS; TO AMEND SECTION 12-6-3360, AS AMENDED, RELATING TO THE TARGETED JOBS TAX CREDIT, SO AS TO EXTEND ELIGIBILITY FOR THESE CREDITS; TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO PROPERTY TAX EXEMPTIONS, SO AS TO EXEMPT OTHERWISE EXEMPT PROPERTY LEASED BY A GOVERNMENTAL ENTITY, TO ALLOW A COUNTY COUNCIL BY ORDINANCE TO POSTPONE IMPLEMENTATION OF A COUNTYWIDE ASSESSMENT AND EQUALIZATION PLAN SCHEDULED FOR 2007 UNTIL 2008; TO AMEND SECTION 61-4-737, AS AMENDED, RELATING TO WINE TASTINGS IN PREMISES LICENSED FOR OFF-PREMISE CONSUMPTION, SO AS TO INCREASE THE NUMBER OF TASTINGS PERMITTED; BY ADDING SECTION 12-60-3312 SO AS TO PROVIDE THAT PROCEEDINGS AND RECORDS OF A CONTESTED CASE HEARING INVOLVING THE SOUTH CAROLINA REVENUE PROCEDURES ACT ARE OPEN TO THE PUBLIC; TO AMEND SECTION 6-34-40, RELATING TO TAX CREDITS FOR RETAIL FACILITIES REVITALIZATION, SO AS TO MAKE A TECHNICAL CHANGE AND TO PROVIDE THAT THE DEPARTMENT OF REVENUE MAY PROMULGATE REGULATIONS IN CONNECTION WITH THESE CREDITS, BUT IS NOT REQUIRED TO; TO AMEND SECTION 12-2-20, AS AMENDED, RELATING TO THE DEFINITION OF "PERSON" FOR PURPOSES OF ADMINISTRATION OF TAXES BY THE DEPARTMENT OF REVENUE, SO AS TO ADD A DEFINITION FOR "INDIVIDUAL"; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICABILITY OF THE INTERNAL REVENUE CODE TO THIS STATE, SO AS TO PROVIDE FOR A TAXPAYER FILING A STATE RETURN WITH AN APPROVAL FROM THE INTERNAL REVENUE SERVICE; TO AMEND SECTION 12-6-545, AS AMENDED, RELATING TO INCOME TAX RATES FOR PASS-THROUGH TRADE AND BUSINESS INCOME, SO AS TO CORRECT A CROSS REFERENCE AND TO FURTHER PROVIDE FOR AN ELECTION BY A TAXPAYER OWNING AN INTEREST IN A PASS-THROUGH BUSINESS FOR WHICH A PORTION OF THE ACTIVE INCOME IS RELATED TO HIS PERSONAL SERVICES; TO AMEND SECTION 12-6-1140, AS AMENDED, RELATING TO DEDUCTIONS ALLOWED FROM SOUTH CAROLINA TAXABLE INCOME OF AN INDIVIDUAL, SO AS TO PROVIDE FOR CERTIFICATION FROM A SUPERVISOR OF THE TAXPAYER CLAIMING THE DEDUCTION; TO AMEND SECTION 12-6-3360, AS AMENDED, RELATING TO THE JOBS TAX CREDIT, SO AS TO CORRECT CROSS REFERENCES AND TO FURTHER PROVIDE FOR DESIGNATION OF THE CORPORATE HEADQUARTERS OF A GENERAL CONTRACTOR LICENSED IN THIS STATE; TO AMEND SECTION 12-6-3535, AS AMENDED, RELATING TO CREDIT AGAINST THE STATE INCOME TAX FOR REHABILITATION OF A CERTIFIED HISTORIC STRUCTURE, SO AS TO PROVIDE FOR THE FILING OF THE CERTIFICATION BY THE TAXPAYER WITH A TAX RETURN; TO AMEND SECTION 12-6-3585, RELATING TO THE TAX CREDIT FOR CONTRIBUTIONS TO THE INDUSTRY PARTNERSHIP FUND, SO AS TO SUBSTITUTE THE WORD "SINGLE" FOR "INDIVIDUAL" WHEN DESCRIBING THE TAXPAYER AND TO PROVIDE FOR AVAILABILITY OF THE QUALIFYING FORM TO THE DEPARTMENT OF REVENUE; TO AMEND SECTION 12-6-3587, RELATING TO A TAX CREDIT FOR INSTALLATION OF A SOLAR ENERGY HEATING OR COOLING SYSTEM, SO AS TO SPECIFY THAT THE INSTALLATION MUST BE DONE IN A BUILDING IN THIS STATE; TO AMEND SECTION 12-6-4980, AS AMENDED, RELATING TO EXTENSION OF TIME FOR FILING RETURNS, SO AS TO PROVIDE FOR AN EXTENSION NOT TO EXCEED SIX MONTHS, TO DELETE THE REQUIREMENT THAT THE EXTENSION BE ALLOWED FOR GOOD CAUSE, AND TO DISALLOW ANOTHER EXTENSION FOR A TAXPAYER WHO FAILS TO MEET THE REQUIREMENT OF THE PREVIOUS EXTENSION; TO AMEND SECTION 12-8-580, AS AMENDED, RELATING TO INCOME TAX WITHHOLDING FROM A NONRESIDENT SELLER, SO AS TO PROVIDE FOR THE REMITTANCE OF WITHHELD AMOUNTS BY A LENDING INSTITUTION, REAL ESTATE AGENT, OR CLOSING ATTORNEY; TO AMEND SECTION 12-8-590, RELATING TO WITHHOLDING INCOME TAX FROM A NONRESIDENT DISTRIBUTEE SO AS TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 12-8-2020, RELATING TO REFUND OR CREDIT FOR OVERPAYMENT OF WITHHELD TAX, SO AS TO DELETE THE REQUIREMENT THAT THE WITHHOLDING AGENT FURNISH EVIDENCE AND TO DELETE TIME AND DOLLAR AMOUNT LIMITATIONS; TO AMEND SECTION 12-20-90, AS AMENDED, RELATING TO LICENSE FEES FOR HOLDING COMPANIES, SO AS TO CORRECT A CROSS REFERENCE; TO AMEND SECTION 12-23-20, AS AMENDED, RELATING TO EXEMPTION FROM THE BUSINESS LICENSE TAX, SO AS TO CONFORM THE TIMES FOR WHICH THE ASSESSMENT OF TAXES MAY BE SUSPENDED; TO AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO EXEMPTIONS FROM THE STATE SALES TAX, SO AS TO CONFORM THE TIMES FOR WHICH THE ASSESSMENT OF TAXES MAY BE SUSPENDED; TO AMEND SECTION 12-36-2510, AS AMENDED, RELATING TO A CERTIFICATE ALLOWING A TAXPAYER TO BUY TANGIBLE PERSONAL PROPERTY TAX FREE AND THE PURCHASER TO BE LIABLE FOR TAXES, SO AS TO MAKE A TECHNICAL CORRECTION; TO AMEND SECTION 12-37-270, AS AMENDED, RELATING TO CREDITS TO THE TRUST FUND FOR TAX RELIEF IN AN AMOUNT SUFFICIENT TO PAY REIMBURSEMENT, SO AS TO PERMIT, BUT NOT REQUIRE, THE DEPARTMENT OF REVENUE TO PROMULGATE REGULATIONS IN THAT CONNECTION; TO AMEND SECTION 12-54-70, AS AMENDED, RELATING TO EXTENSION OF TIME FOR FILING RETURNS OR PAYING TAXES, SO AS TO PROVIDE FOR AN EXTENSION OF TIME NOT TO EXCEED SIX MONTHS AND TO DELETE THE REQUIREMENT THAT GOOD CAUSE BE SHOWN; TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITS ON ASSESSMENTS, SO AS TO PROVIDE FOR THE TOTAL OF ALL TAXES REQUIRED TO BE SHOWN ON A RETURN IN CONNECTION WITH DETERMINATION OF AN UNDERSTATEMENT OF TAXES, TO PROVIDE FOR TIME LIMITS FOR ASSESSMENT OF USE TAXES, AND TO PROVIDE THAT THE TIME LIMITATIONS DO NOT APPLY TO SUCCESSOR LIABILITY STATUTES; TO AMEND SECTION 12-54-155, AS AMENDED, RELATING TO PENALTIES FOR UNDERSTATEMENT OF TAXES, SO AS TO MAKE A TECHNICAL CORRECTION; TO AMEND SECTION 12-54-240, AS AMENDED, RELATING TO DISCLOSURE OF RECORDS, REPORTS, AND RETURNS FILED WITH THE DEPARTMENT OF REVENUE, SO AS TO PROVIDE FOR DISCLOSURE OF THE TAXPAYER'S ADDRESS AS SHOWN ON THE RETURN, TO OMIT A CROSS REFERENCE, AND TO ALLOW THE DISCLOSURE OF INFORMATION IN CONNECTION WITH PROCEEDINGS AND RECORDS OF A CONTESTED CASE HEARING OF THE ADMINISTRATIVE LAW COURT PURSUANT TO THE SOUTH CAROLINA REVENUE PROCEDURES ACT; TO AMEND SECTION 12-60-20, AS AMENDED, RELATING TO LEGISLATIVE INTENT IN CONNECTION WITH THE SOUTH CAROLINA REVENUE PROCEDURES ACT, SO AS TO INCLUDE DISPUTES CONCERNING PROPERTY TAXES; TO AMEND SECTION 12-60-90, AS AMENDED, RELATING TO THE ADMINISTRATIVE TAX PROCESS, SO AS TO CORRECT A CROSS REFERENCE; TO AMEND SECTION 6-1-320, AS AMENDED, RELATING TO THE LIMIT ON PROPERTY TAX MILLAGE INCREASES, SO AS TO PROVIDE THAT A REDUCTION IN POPULATION DOES NOT DECREASE THE APPLICABLE LIMIT; BY ADDING SECTION 12-4-535 SO AS TO PROVIDE FOR A DEPARTMENT DETERMINATION AS TO VALUATION, ASSESSMENT, OR TAXATION OF PROPERTY; TO AMEND SECTION 12-4-320, RELATING TO POWERS AND DUTIES OF THE DEPARTMENT OF REVENUE, SO AS TO INCLUDE PARTICIPATION IN A NATIONAL AUDIT PROGRAM BY WRITTEN AGREEMENT WITH THE MULTISTATE TAX COMMISSION AND IN AN INSTALLMENT PAYMENT AGREEMENT WITH A TAXPAYER; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO APPLICATION OF THE INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO INCLUDE THE CODE THROUGH 2006; TO AMEND SECTION 12-6-50, AS AMENDED, RELATING TO PROVISIONS OF THE INTERNAL REVENUE CODE NOT ADOPTED BY THE STATE, SO AS TO INCLUDE SECTION 54; TO AMEND SECTION 12-6-3360, AS AMENDED, RELATING TO THE JOB TAX CREDIT, SO AS TO PROVIDE FOR A HIGHER TIER CREDIT FOR FIVE TAXABLE YEARS IN CERTAIN CASES; TO AMEND SECTION 12-6-3362, RELATING TO SMALL BUSINESS TAX CREDIT, SO AS TO COMMENCE THE CREDIT IN THE YEAR THE JOBS ARE CREATED AND TO PROVIDE FOR ITS CALCULATION; TO AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO EXEMPTIONS FROM THE STATE'S SALES AND USE TAX, SO AS TO INCLUDE CONSTRUCTION MATERIALS USED TO BUILD OR EXPAND A MANUFACTURING OR DISTRIBUTION FACILITY OR A FACILITY THAT SERVES BOTH PURPOSES AT A SINGLE SITE; TO AMEND SECTION 12-54-200, AS AMENDED, RELATING TO THE REQUIREMENT OF A BOND TO SECURE THE PAYMENT OF TAXES, SO AS TO ALLOW FOR REQUIREMENT OF PAYMENT IN IMMEDIATELY AVAILABLE FUNDS IF THE AMOUNT DUE IS FIFTEEN THOUSAND DOLLARS OR MORE; TO AMEND SECTION 12-54-240, AS AMENDED, RELATING TO DISCLOSURE RECORDS AND REPORTS FILED WITH THE DEPARTMENT OF REVENUE, SO AS TO PERMIT DISCLOSURE TO THE STATE TREASURER IN CONNECTION WITH THE UNCLAIMED PROPERTY ACT AND, FURTHER, TO PERMIT THE EXCHANGE OF INFORMATION IN CONNECTION WITH THE VERIFICATION OF TAX CREDITS IN CONNECTION WITH THE VENTURE CAPITAL INVESTMENT ACT; TO AMEND SECTION 12-54-250, AS AMENDED, RELATING TO REQUIREMENT OF PAYMENT IN IMMEDIATELY AVAILABLE FUNDS, SO AS TO DEFINE MORE SPECIFICALLY "PAYMENT IN IMMEDIATELY AVAILABLE FUNDS"; TO AMEND SECTION 12-60-430, RELATING TO THE ESTIMATION OF TAX LIABILITY BY THE DEPARTMENT OF REVENUE, SO AS TO INCLUDE THE OCCASION OF A FRIVOLOUS RETURN OR REPORT AND TO PROVIDE FOR DISCLOSURE OF THE DATA IT USES IN THE ESTIMATION TO A COURT; TO AMEND SECTION 11-11-156, AS AMENDED, RELATING TO REIMBURSEMENTS TO SCHOOL DISTRICTS FROM THE HOMESTEAD EXEMPTION FUND, SO AS TO PROVIDE FOR REIMBURSEMENTS IN THE CASE OF A REDEVELOPMENT PROJECT AREA; TO AMEND SECTION 11-45-55, RELATING TO TAX CREDIT CERTIFICATES IN CONNECTION WITH THE VENTURE CAPITAL INVESTMENT ACT, SO AS TO PERMIT THE EXCHANGE OF INFORMATION WITH THE DEPARTMENT OF REVENUE AND OTHER AGENCIES; TO PROHIBIT THE ASSESSMENT OF A PENALTY AGAINST A SOUTH CAROLINA TAXPAYER FOR FOLLOWING SECTION 401 OF THE FEDERAL TAX INCREASE PREVENTION AND RECONCILIATION ACT OF 2005; BY ADDING SECTIONS 12-6-2252 AND 12-6-2295 SO AS TO FURTHER PROVIDE FOR ALLOCATION AND APPORTIONMENT OF BUSINESS INCOME FOR STATE INCOME TAX PURPOSES BY BASING THE DETERMINATION ONLY ON A SALES FACTOR AND TO DEFINE THE TERMS "SALES" AND "GROSS RECEIPTS" CONSISTENTLY AND SPECIFICALLY FOR THAT PURPOSE; TO AMEND SECTION 12-6-2250, AS AMENDED, RELATING TO THE CONDUCT OF CERTAIN BUSINESSES IN THIS STATE, SO AS TO PROVIDE FOR THE USE OF PROPERTY, PAYROLL, AND SALES RATIOS IN DETERMINING THE APPORTIONMENT AND ALLOCATION AND TO PROVIDE FOR RATES OF REDUCTION OF INCOME APPORTIONED TO THE STATE THROUGH TAXABLE YEARS BEGINNING IN 2007 THROUGH 2010; TO AMEND SECTION 12-6-2280, RELATING TO THE DEFINITION OF "SALES FACTOR", SO AS TO DELETE SOME EXAMPLES AND TO FURTHER EXPLAIN SALES TO THE UNITED STATES GOVERNMENT; TO AMEND SECTION 12-6-2290, RELATING TO APPORTIONMENT OF INCOME DERIVED FROM OTHER SOURCES, SO AS TO INCLUDE A CROSS REFERENCE TO THE NEW DEFINITION FOR "GROSS RECEIPTS"; TO AMEND SECTION 12-6-1130, AS AMENDED, RELATING TO COMPUTATION OF TAXABLE INCOME, SECTION 12-6-2240, RELATING TO APPORTIONMENT OF INCOME AFTER ALLOCATION, AND SECTION 12-6-2290, RELATING TO APPORTIONMENT OF INCOME DERIVED FROM OTHER SOURCES, ALL SO AS TO UPDATE A CROSS REFERENCE EFFECTIVE FOR TAXABLE YEARS BEGINNING AFTER 2010; TO REPEAL SECTION 12-6-2250 RELATING TO THE CONDUCT OF CERTAIN BUSINESSES IN THE STATE, SECTION 12-6-2260 RELATING TO THE PROPERTY FACTOR, AND SECTION 12-6-2270 RELATING TO THE PAYROLL FACTOR, ALL REPEALS EFFECTIVE FOR TAXABLE YEARS BEGINNING AFTER 2010; TO AMEND SECTION 6-5-10, RELATING TO THE AUTHORITY OF LOCAL GOVERNMENTAL ENTITIES TO INVEST, SO AS TO INCLUDE CERTAIN FEDERAL AND STATE OBLIGATIONS; TO AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO SALES TAX EXEMPTIONS, SO AS TO ALLOW A SALES TAX EXEMPTION FOR AN AMUSEMENT PARK RIDE AND ANY PARTS, MACHINERY, AND EQUIPMENT USED TO ASSEMBLE AND MAKE UP AN AMUSEMENT PARK RIDE OR PERFORMANCE VENUE FACILITY AND ANY RELATED OR REQUIRED MACHINERY, EQUIPMENT, AND FIXTURES LOCATED IN AN AMUSEMENT PARK OR THEME PARK THAT MEETS CERTAIN INVESTMENT AND EMPLOYMENT QUALIFICATIONS; BY ADDING SECTION 12-14-80 SO AS TO ALLOW AN ECONOMIC IMPACT ZONE TAX CREDIT AGAINST THE CORPORATE INCOME TAX OR EMPLOYEES' WITHHOLDING TAX TO A MANUFACTURER THAT IS ENGAGED IN AT LEAST ONE ECONOMIC IMPACT ZONE, EMPLOYS FIVE THOUSAND OR MORE FULL-TIME WORKERS IN THIS STATE WITH A TOTAL CAPITAL INVESTMENT OF NOT LESS THAN TWO BILLION DOLLARS, AND HAS INVESTED FIVE HUNDRED MILLION DOLLARS IN THIS STATE; TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO PROPERTY TAX EXEMPTIONS, SO AS TO ALLOW A COUNTY GOVERNING BODY TO EXEMPT FROM PROPERTY TAX 42.75 PERCENT OF THE FAIR MARKET VALUE OF A WATERCRAFT AND ITS MOTOR; TO AMEND SECTION 12-6-590, RELATING TO INCOME TAX TREATMENT OF "S" CORPORATIONS, SO AS TO REVISE THAT TREATMENT FOR A BANK SHAREHOLDER; TO AMEND SECTION 12-37-714, RELATING TO PROPERTY TAX ON BOATS WITH SITUS IN SOUTH CAROLINA, SO AS TO TOLL THE TIME PERIODS FOR THE LENGTH OF TIME A BOAT MUST REMAIN IN SOUTH CAROLINA FOR PURPOSES OF DETERMINING PROPERTY TAX ON A BOAT THAT IS SUBJECT TO A WRITTEN CONTRACT FOR REPAIRS IN THE STATE; TO AMEND SECTION 4-29-68, AS AMENDED, RELATING TO SPECIAL SOURCE REVENUE BONDS, SO AS TO ALLOW ADDITIONAL USES FOR BOND PROCEEDS, INCLUDING ACQUIRING AN AIRCRAFT; AND BY ADDING SECTION 46-3-260 SO AS TO ESTABLISH IN THE STATE TREASURY THE SOUTH CAROLINA RENEWABLE ENERGY INFRASTRUCTURE DEVELOPMENT FUND AND PROVIDE FOR ITS OPERATIONS AND ADMINISTRATION.
Be it enacted by the General Assembly of the State of South Carolina:
Jobs tax credit; multicounty business park
SECTION 1. Section 12-10-80 of the 1976 Code, as last amended by Act 386 of 2006, is further amended by adding an appropriately lettered subsection at the end to read:
"( ) A taxpayer who qualifies for the job development credit pursuant to the provisions of this section and who is located in a multicounty business or industrial park jointly established pursuant to Section 13 of Article VIII of the Constitution of this State is allowed a job development credit equal to the amount allowed pursuant to subsection (D) for the designation of the county which has the lowest development status of the counties containing the park if:
(1) the park is developed and established on the geographical boundary of adjacent counties; and
(2) the written agreement, pursuant to Section 4-1-170, requires revenue from the park to be allocated to each county on an equal basis."
South Carolina Venture Capital Authority
SECTION 2. A. Section 11-45-30(10) and (15) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:
"(10) 'Lender' means a banking institution subject to the income tax on banks under Chapter 11, Title 12, an insurance company subject to a state premium tax liability pursuant to Chapter 7, Title 38, a captive insurance company regulated pursuant to Chapter 90, Title 38, a utility regulated pursuant to Title 58, or a financial institution with proven experience in state-based venture capital transactions, pursuant to guidelines established by the authority. Both the guidelines and the lender must be approved by the State Budget and Control Board.
(15) 'Designated investor group' means a person who enters into a designated investor contract with the authority pursuant to Section 11-45-50.
(16) 'Interest' means interest on the outstanding balance owed or owing to a lender by a designated investor group under such calculations, terms, or conditions as determined by the authority, provided that the method of calculating interest may be included in the tax credit certificates to the extent that the authority considers the information necessary or appropriate."
B. Section 11-45-50(B)(1) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:
"(1) Each designated investor group selected pursuant to subsection (A)(3) of this section shall enter into a designated investor contract with the authority, which designated investor contract must contain any investment guidelines and other terms and conditions the authority considers necessary, advisable, or appropriate."
C. Section 11-45-55(B) of the 1976 Code, as added by Act 125 of 2005, is amended to read:
"(B) The authority shall issue tax credit certificates to each lender contemporaneously with each loan made pursuant to this chapter in accordance with any guidelines established by the authority pursuant to Section 11-45-100. The tax credit certificates must describe procedures for the issuance, transfer, and redemption of the certificates, and related tax credits. These certificates also must describe the amounts, year, and conditions for redemption of the tax credits reflected on the certificates. Once a loan is made by a lender, the certificate issued to the lender shall be binding on the authority and this State and may not be modified, terminated, or rescinded. The form of the tax credit certificate must be approved by the State Budget and Control Board."
D. Section 11-45-70(2)(a) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:
"(a) While each designated investor group shall give preference to investors, otherwise qualified, that agree to maintain either a headquarters or an office staffed by an investment professional in South Carolina, investments may be made with investors not principally located in South Carolina if the investors are otherwise qualified pursuant to this chapter and, together with related companies, have other venture capital investments in South Carolina or in South Carolina-based companies or can provide evidence to the authority of prior investments in South Carolina or South Carolina-based companies at least equal to the total amount of monies placed with that investor by the designated investor group."
E. Chapter 45, Title 11 of the 1976 Code is amended by adding:
"Section 11-45-105. Any guideline issued by the authority pursuant to this chapter must be approved by the State Budget and Control Board."
Tourism infrastructure
SECTION 3. A. Section 12-21-6520(14) of the 1976 Code, as added by Act 386 of 2006, is amended to read:
"(14) 'Tourism or recreational facility' also means an aquarium or natural history exhibit or museum located within or directly contiguous to an extraordinary retail establishment as defined below. An extraordinary retail establishment is a single store located in South Carolina within two miles of an interstate highway or in a county with at least three and one-half million visitors a year, and it must be a destination retail establishment which attracts at least two million visitors a year with at least thirty-five percent of those visitors traveling at least fifty miles to the establishment. The extraordinary retail establishment must have a capital investment of at least twenty-five million dollars including land, buildings and site preparation costs, and one or more hotels must be built to service the establishment within three years of occupancy. Only establishments which receive a certificate of occupancy after July 1, 2006, qualify. The Department of Parks, Recreation and Tourism shall determine and annually certify whether a retail establishment meets these criteria and its judgment is conclusive. The extraordinary retail establishment annually must collect and remit at least two million dollars in sales taxes but is not required to collect or remit admission taxes."
B. Section 12-21-6590 of the 1976 Code, as added by Act 386 of 2006, is amended to read:
"Section 12-21-6590. (A) The Department of Parks, Recreation and Tourism may designate no more than four extraordinary retail establishments as defined in Section 12-21-6520(14), and for purposes of this section, sales taxes must be substituted for admissions taxes wherever admission tax appears in this Tourism Infrastructure Admissions Tax Act. For purposes of this section, additional infrastructure improvements include any aquarium or natural history exhibits or museum located within or directly contiguous to the extraordinary retail establishment which are dedicated to public use and enjoyment under such terms and conditions as may be required by the municipality or county in which they are located. Additional infrastructure improvements also shall include site prep, construction of real or personal property, parking, roadways, ingress and egress, utilities, and other expenditures on the extraordinary retail establishment which directly support or service the aquarium or natural history museum or exhibits. The certification application made under this section must be executed by both the extraordinary retail establishment as well as the county or municipality.
(B) Prior to the completion of an extraordinary retail establishment, an entity may request that the county or municipality in which the facility is located provide an application for conditional certification to the Department of Parks, Recreation and Tourism. The Department of Parks, Recreation and Tourism may grant conditional certification to the entity as an extraordinary retail establishment based on reasonable projections that the facility will meet the requirements of Section 12-21-6520(14) within three years of the certificate of occupancy. If the Department of Parks, Recreation and Tourism grants the conditional certification to the entity as an extraordinary retail establishment, it shall forward the approval for conditional certification to the department. The department shall notify the entity and either the county or the municipality, as applicable, of the approval.
An applicant obtaining conditional certification as an extraordinary retail establishment under this section and satisfying the requirements of conditional certification by the dates provided therein, shall be deemed to satisfy all of the requirements of this article pertaining to qualification as an extraordinary retail establishment for the duration of the benefit period. The entity shall be deemed to constitute a major tourism or recreation facility under Section 12-21-6520(12) and shall be entitled to all of the benefits of this article for the duration of the benefit period without any further certification requirements. This subsection shall not be construed to allow an applicant to receive the benefits provided in this article prior to satisfying the requirements of the conditional certification and of Section 12-21-6520(14).
The Department of Parks, Recreation and Tourism shall develop application forms and adopt guidelines governing the conditional certification process.
(C) If an applicant obtains conditional certification and complies with both the conditional certification and Section 12-21-6520(14), then one-half shall be substituted for one-fourth in Section 12-21-6530(A), and no funds will be transferred to the council pursuant to Section 12-21-6540."
Exception
SECTION 4. Section 12-21-6540(A) of the 1976 Code is amended to read:
"(A) During the benefit period, in addition to the amount described in Section 12-21-6530, except as otherwise provided in Section 12-21-6590, an additional amount equal to one-fourth of the license tax paid on admissions to an establishment must be transferred by the department to the State Treasurer to be deposited into the fund and distributed pursuant to the approval of the council."
Income tax credit
SECTION 5. Section 12-6-3415(A) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(A) A taxpayer that claims a federal income tax credit pursuant to Section 41 of the Internal Revenue Code for increasing research activities for the taxable year is allowed a credit against any tax due pursuant to this chapter or Section 12-20-50 equal to five percent of the taxpayer's qualified research expenses made in South Carolina. For the purposes of this credit, qualified research expenses has the same meaning as provided for in Section 41 of the Internal Revenue Code."
Corporate license tax
SECTION 6. Section 12-20-105 of the 1976 Code, as last amended by Act 145 of 2005, is further amended to read:
"Section 12-20-105. (A) Any company subject to a license tax under Section 12-20-100 may claim a credit against its license tax liability for amounts paid in cash to provide infrastructure for an eligible project.
(B)(1) To be considered an eligible project for purposes of this section, the project must qualify for income tax credits under Chapter 6, Title 12, withholding tax credit under Chapter 10, Title 12, income tax credits under Chapter 14, Title 12, or fees in lieu of property taxes under either Chapter 12, Title 4, Chapter 29, Title 4, or Chapter 44, Title 12.
(2) If a project consists of an office, business, commercial, or industrial park which is owned or constructed by a county or political subdivision of this State when the qualifying improvements are paid for, the project does not have to meet the qualifications of item (1) to be considered an eligible project.
(C) For the purpose of this section, 'infrastructure' means improvements for water, sewer, gas, steam, electric energy, and communication services made to a building or land that are considered necessary, suitable, or useful to an eligible project. These improvements include, but are not limited to:
(1) improvements to both public or private water and sewer systems;
(2) improvements to both public or private electric, natural gas, and telecommunications systems including, but not limited to, ones owned or leased by an electric cooperative, electric utility, or electric supplier, as defined in Chapter 27, Title 58;
(3) fixed transportation facilities including highway, road, rail, water, and air;
(4) for a qualifying project under subsection (B)(2), infrastructure improvements include industrial shell buildings and the purchase of land for an office, business, commercial, or industrial park which is owned or constructed by a county or political subdivision of this State. Nothing in this section shall prohibit the county or political subdivision from selling the industrial shell building or industrial park after the company has paid in cash to provide the infrastructure for an eligible project.
(D) A company is not allowed the credit provided by this section for actual expenses it incurs in the construction and operation of any building or infrastructure it owns, leases, manages, or operates.
(E) The maximum aggregate credit that may be claimed in any tax year by a single company is three hundred thousand dollars.
(F) The credits allowed by this section may not reduce the license tax liability of the company below zero. If the applicable credit originally earned during a taxable year exceeds the liability and is otherwise allowable under subsection (D), the amount of the excess may be carried forward to the next taxable year.
(G) For South Carolina income tax and license purposes, a company that claims the credit allowed by this section is ineligible to claim the credit allowed by Section 12-6-3420."
Fee in lieu of taxes
SECTION 7. A. Section 4-1-175 of the 1976 Code, as last amended by Act 149 of 1997, is further amended to read:
"Section 4-1-175. A county or municipality receiving revenues from a payment in lieu of taxes pursuant to Section 13 of Article VIII of the Constitution of this State may issue special source revenue bonds secured by and payable from all or a part of that portion of the revenues which the county is entitled to retain pursuant to the agreement required by Section 4-1-170 in the manner and for the purposes set forth in Section 4-29-68. The county or municipality may pledge the revenues for the additional securing of other indebtedness in the manner and for the purposes set forth in Section 4-29-68.
A county or municipality or special purpose district that receives and retains revenues from a payment in lieu of taxes pursuant to Section 13 of Article VIII of the Constitution of this State may use a portion of this revenue for the purposes outlined in Section 4-29-68 without the requirement of issuing the special source revenue bonds or meeting the requirements of Section 4-29-68(A)(4) by providing a credit against or payment derived from the revenues received and retained under Section 13 of Article VIII of the Constitution of this State.
A political subdivision of this State subject to the limitation of either Section 14(7)(a) or Section 15(6) of Article X of the Constitution of this State pledging pursuant to this section all or a portion of the revenues received and retained by that subdivision from a payment in lieu of taxes to the repayment of any bonds shall not include in the assessed value of taxable property located in the political subdivision for the purposes of calculating the limit imposed by those sections of the Constitution any amount representing the value of the property that is the basis of the pledged portion of revenues. If the political subdivision, before pledging revenues pursuant to this section, has included an amount representing the value of a parcel or item of property that is the subject of a payment in lieu of taxes in the assessed value of taxable property located in the political subdivision and has issued general obligation debt within the debt limit calculated on the basis of such assessed value, then it may not pledge pursuant to this section revenues based on the item or parcel of property, to the extent that the amount representing its value is necessary to permit the outstanding general obligation debt within the debt limit of the political subdivision."
B. Section 4-12-30(C), (D), (H), and (K) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"(C)(1) From the end of the property tax year in which the sponsor and the county execute an inducement agreement, the sponsor has five years in which to enter into an initial lease agreement with the county.
(2) From the end of the property tax year in which the sponsor and the county execute the initial lease agreement, the sponsor has five years in which to complete its investment for purposes of qualifying for this section. If the sponsor does not anticipate completing the project within five years, the sponsor may apply to the county before the end of the five-year period for making the minimum investment for an extension of time to complete the project. The extension may not exceed five years. If a project receives an extension of less than five years, the sponsor may apply to the county before the end of the extension period for an additional extension of time to complete the project for an aggregate extension of not more than five years. Unless approved as part of the original lease documentation, the county council of the county may approve any extension by resolution, a copy of which must be delivered to the department within thirty days of the date the resolution was adopted. There is no extension allowed for the five-year period in which to meet the minimum level of investment. If the minimum level of investment is not met within five years, all property under the lease agreement or agreements, reverts retroactively to the payments required by Section 4-12-20. The difference between the fee actually paid by the sponsor and the payment which is due under Section 4-12-20 is subject to interest, as provided in Section 12-54-25(D). To the extent necessary to determine if a sponsor or sponsor affiliate has met its investment requirements, any statute of limitations that might apply pursuant to Section 12-54-85 is suspended for all sponsors and sponsor affiliates during the time period allowed to make the required investment and the department or county may seek collection of any amount that may be due pursuant to this subsection. Any property placed in service after the five-year period, or ten-year period in the case of a project which has received an extension, is not part of the fee agreement under subsection (D)(2) and is subject to the payments required by Section 4-12-20 if the county has title to the property, or to ad valorem property taxes, if the sponsor has title to the property. For purposes of those sponsors qualifying under subsection (D)(4), the five-year period referred to in this subsection is eight years.
(3) For those sponsors that, after qualifying pursuant to subsection (D)(4), have more than five hundred million dollars in capital invested in this State and employ more than one thousand people in this State, the five-year period referred to in this subsection is ten years, and the ten-year period for completing the project is fifteen years.
(4) The annual fee provided by subsection (D)(2) is available for no more than twenty years for an applicable piece of property. The sponsor may apply to the county prior to the end of the twenty-year period for an extension of the fee period for up to ten years. The county council of the county shall approve an extension by resolution upon a finding of substantial public benefit. A copy of the resolution shall be delivered to the department within thirty days of the date the resolution was adopted. For projects completed and placed in service during more than one year, each year's investment may be subject to the fee in subsection (D)(2) for twenty years or, if extended as provided in this subsection up to thirty years, for an aggregate fee period of up to forty years. For those sponsors qualifying under subsection (D)(4), the annual fee is available for no more than thirty years for an applicable piece of property and for those projects placed in service in more than one year the annual fee is available for an aggregate fee period of up to forty-three years, or for those sponsors qualifying pursuant to subsection (C)(3), forty-five years.
(5) Annually, during the time period allowed to meet the minimum investment level, the sponsor shall provide the total amount invested to the appropriate county official.
(D) The inducement agreement must provide for fee payments, to the extent applicable, as follows:
(1)(a) Any property is subject to an annual fee payment, as provided in Section 4-12-20.
(b) Any undeveloped land before being developed and placed in service, is subject to an annual fee payment as provided in Section 4-12-20. The time during which fee payments are made under Section 4-12-20 is not considered part of the maximum periods provided in subsections (C)(2) through (C)(4), and a lease is not considered an 'initial lease agreement' for purposes of this subsection until the first day of the calendar year for which a fee payment is due under item (2) in connection with the lease.
(2) After property qualifying under subsection (B) is placed in service, an annual fee payment determined in accordance with one of the following is due:
(a) an annual payment in an amount not less than the property taxes that would be due on the project if it were taxable, but using an assessment ratio of not less than six percent, or four percent of those projects qualifying pursuant to subsection (D)(4), a fixed millage rate as provided in subsection (G), and a fair market value estimate determined by the department as follows:
(i) for real property, using the original income tax basis for South Carolina income tax purposes without regard to depreciation, if real property is constructed for the fee or is purchased in an arm's length transaction; otherwise, the property must be reported at its fair market value for ad valorem property tax purposes as determined by appraisal. The fair market value estimate established for the first year of the fee remains the fair market value of the real property for the life of the fee; and
(ii) for personal property, using the original tax basis for South Carolina income tax purposes less depreciation allowable for property tax purposes, except that the sponsor is not entitled to any extraordinary obsolescence.
(b) an annual payment as provided in subsection (D)(2)(a), except that every fifth year the applicable millage rate is allowed to increase or decrease in step with the average actual millage rate applicable in the district where the project is located based on the preceding five-year period.
(3) At the conclusion of the payments determined pursuant to items (1) and (2) of this subsection, an annual payment equal to the taxes is due on the project as if it were taxable. When the property is no longer subject to the fee under subsection (D)(2), the fee or property taxes must be assessed:
(a) with respect to real property, based on the fair market value as of the latest reassessment date for similar taxable property; and
(b) with respect to personal property, based on the then depreciated value applicable to such property under the fee, and thereafter continuing with the South Carolina property tax depreciation schedule.
(4)(a) The assessment ratio may not be lower than four percent:
(i) in the case of a single sponsor investing at least one hundred fifty million dollars and creating at least one hundred twenty-five new full-time jobs in this State;
(ii) in the case of a single sponsor investing at least four hundred million dollars at a project; or
(iii) in the case of a project that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a).
(b) The new full-time jobs requirement of this item does not apply in the case of a sponsor which for more than the twenty-five years ending on the date of the agreement paid more than fifty percent of all property taxes actually collected in the county.
(c) In an instance in which the governing body of a county has by contractual agreement provided for a change in fee in lieu of taxes arrangement conditioned on a future legislative enactment, any new enactment shall not bind the original parties to the agreement unless the change is ratified by the governing body of the county.
(5) Notwithstanding the use of the term 'assessment ratio', a sponsor qualifying for the fee may negotiate an inducement agreement with a county using differing assessment ratios for different assessment years or levels of investment covered by the inducement agreement. However, the lowest assessment ratio allowed is the lowest ratio for which the sponsor may qualify under this section.
(H)(1) Upon agreement of the parties, and except as provided in item (2) of this subsection, an inducement agreement, a millage rate agreement, or both, may be amended or terminated and replaced with regard to all matters including, but not limited to, the addition or removal of sponsors or sponsor affiliates.
(2) No amendment or replacement of an inducement agreement or millage rate agreement may be used to lower the millage rate, assessment ratio, or, except as provided in Sections 4-12-30(C)(2) and (C)(4), increase the term of the agreement under any such agreement. However, existing inducement agreements which have not yet been implemented by the execution and delivery of a millage rate agreement or a lease agreement may be amended up to the date of execution and delivery of a millage rate agreement or a lease agreement in the discretion of the governing body.
(3) An inducement agreement or a lease agreement may provide that a sponsor who has committed to an investment under subsection (D)(4) may continue to receive the benefits of this chapter even if the sponsor fails to make or maintain the required investment or fails to create the jobs required by subsection (D)(4), if the sponsor meets the two and one-half million dollar minimum investment. If the sponsor fails to make or maintain the required investment or create the required number of jobs, the inducement agreement or the lease agreement may not provide for an assessment ratio and an exemption period more favorable than those allowed for the minimum investment. To the extent that the sponsor obtained a four percent assessment ratio under subsection (D)(4), the sponsor must recalculate the fee using a six percent ratio or such other ratio as the inducement agreement or lease agreement may provide for all years in which the four percent assessment ratio was used and pay the county any difference. This difference is subject to interest as provided in Section 12-54-25.
(K)(1) For a project not located in an industrial development park, as defined in Section 4-1-170, distribution of the fee in lieu of taxes on the project must be made in the same manner and proportion that the millage levied for school and other purposes would be distributed if the property were taxable, but without regard to an exemption otherwise available to the project pursuant to Section 12-37-220 for that year.
(2) For a project located in an industrial development park, as defined in Section 4-1-170, distribution of the fee in lieu of taxes on the project must be made in the manner provided for by the agreement establishing the industrial development park.
(3) A county or municipality or special purpose district that receives and retains revenues from a payment in lieu of taxes may use a portion of this revenue for the purposes outlined in Section 4-29-68 without the requirement of issuing special source revenue bonds or the requirements of Section 4-29-68(A)(4) by providing a credit against or payment derived from the fee due from a sponsor.
(4) Misallocations of the distribution of the fee in lieu of taxes on the project pursuant to this chapter may be corrected by adjusting later distributions, but these adjustments must be made in the same fiscal year as the misallocations. To the extent distributions are made improperly in previous years, a claim for adjustment must be made within one year of the distribution."
C. Section 4-29-67(C), (D)(4), (H), and (L)(3) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"(C)(1) From the end of the property tax year in which the sponsor and the county execute an inducement agreement, the sponsor has five years in which to enter into an initial lease agreement with the county.
(2)(a) From the end of the property tax year in which the sponsor and the county execute the initial lease agreement, the sponsor has five years in which to complete its investment for purposes of qualifying for this section. If the sponsor does not anticipate completing the project within five years, the sponsor may apply to the county before the end of the five-year period for making the investment for an extension of time to complete the project. If the county agrees to grant the extension, it must be in writing, and a copy must be delivered to the department within thirty days of the date the extension was granted. The extension may not exceed five years. If a project receives an extension of less than five years, the sponsor may apply to the county before the end of the extension period for an additional extension of time to complete the project for an aggregate extension of not more than five years. Unless approved as part of the original lease documentation, the county council of the county may approve any extension by resolution, a copy of which must be delivered to the department within thirty days of the date the resolution was adopted.
(b) An extension of the five-year period in which to meet the minimum level of investment is not allowed. If the minimum level of investment is not met within five years, all property covered by the lease agreement or agreements reverts retroactively to the payments required by Section 4-29-60. The difference between the fee actually paid by the sponsor and the payment due pursuant to Section 4-29-60 is subject to interest, as provided in Section 12-54-25(D). To the extent necessary to determine if a sponsor or sponsor affiliate has met its investment requirements, any statute of limitation that might apply pursuant to Section 12-54-85 is suspended for all sponsors and sponsor affiliates and the department or the county may seek to collect any amounts that may be due pursuant to this section.
(c) Unless property qualifies as replacement property pursuant to a contract provision enacted pursuant to subsection (F)(2), property placed in service after the five-year period, or the ten-year period in the case of a project which has received an extension, is not part of the fee agreement pursuant to subsection (D)(2) and is subject to the payments required by Section 4-29-60 if the county has title to the property or ad valorem property taxes, if the sponsor has title to the property.
(d) For purposes of those businesses qualifying under subsection (D)(4), the five-year period referred to in this subsection is eight years. For those sponsors which, after qualifying pursuant to subsection (D)(4), have more than five hundred million dollars in capital invested in this State and employ more than one thousand people in this State, the five-year period referred to in this subsection is ten years, and the ten-year period is fifteen years.
(3) The annual fee provided by subsection (D)(2) is available for no more than twenty years for an applicable piece of property. The sponsor may apply to the county prior to the end of the twenty-year period for an extension of the fee period for up to ten years. The county council of the county may approve an extension by resolution upon a finding of substantial public benefit. A copy of the resolution shall be delivered to the department within thirty days of the date the resolution was adopted. For projects which are completed and placed in service during more than one year, each year's investment may be subject to the fee in subsection (D)(2) for twenty years or, if extended as provided in this subsection, up to thirty years, for an aggregate maximum fee period of up to forty years. For those sponsors qualifying under subsection (D)(4), the annual fee is available for no more than thirty years for an applicable piece of property and for those projects placed in service in more than one year, the annual fee is available for an aggregate fee period of up to forty-three years or, for those sponsors qualifying pursuant to item (2)(d), forty-five years.
(4) During the time period allowed to meet the minimum investment level, the investor annually must inform the appropriate county official of the total amount invested.
(D)(4)(a) The assessment ratio may not be lower than four percent:
(i) in the case of a single sponsor investing at least one hundred fifty million dollars and which is creating at least one hundred twenty-five new full-time jobs at the project;
(ii) in the case of a single sponsor investing at least four hundred million dollars in this State;
(iii) in the case of a project that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a).
(b) The new full-time jobs requirement of this item does not apply in the case of a business that paid more than fifty percent of all property taxes actually collected in the county for more than the twenty-five years ending on the date of the lease agreement.
(c) In an instance in which the governing body of a county has provided, by contractual agreement, for a change in fee in lieu of taxes arrangements conditioned on a future legislative enactment, a new enactment does not bind the original parties to the agreement unless the change is ratified by the governing body of the county.
(H)(1) Upon agreement of the parties, and except as provided in subsection (H)(2), an inducement agreement, a millage rate agreement, or both, may be amended or terminated and replaced with regard to all matters including, but not limited to, the addition or removal of sponsors or sponsor affiliates.
(2) An amendment or a replacement of an inducement agreement or millage rate agreement may not be used to lower the millage rate, discount rate, assessment ratio, or, except as provided in Sections 4-29-67(C)(2) and (C)(4) increase the term of the agreement; except that an existing inducement agreement that has not been implemented by the execution and delivery of a millage rate agreement or a lease agreement may be amended up to the date of execution and delivery of a millage rate agreement or a lease agreement in the discretion of the governing body.
(L)(3) A county or municipality or special purpose district that receives and retains revenues from a payment in lieu of taxes may use a portion of this revenue for the purposes outlined in Section 4-29-68 without the requirement of issuing special source revenue bonds or the requirements of Section 4-29-68(A)(4) by providing a credit against or payment derived from the fee due from the sponsor. "
D. Section 12-44-10 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-44-10. This act may be cited as the 'Fee in Lieu of Tax Simplification Act'."
E. Section 12-44-30(7), (13), (14), and (20) of the 1976 Code, as last amended by Act 161 of 2005, is further amended to read:
"(7) 'Enhanced investment' means a project that results in a total investment:
(a) by a single sponsor investing at least one hundred fifty million dollars and creating at least one hundred twenty-five new full-time jobs at the project; provided that the new full-time jobs requirement of this subsection does not apply to a taxpayer who paid more than fifty percent of all property taxes actually collected in the county for more than twenty-five years, ending on the date of the fee agreement;
(b) by a single sponsor investing at least four hundred million dollars; or
(c) that satisfies the requirements of Section 11-41-30(2)(a), and for which the Secretary of Commerce has delivered certification pursuant to Section 11-41-70(2)(a).
(13) 'Investment period' means the period beginning with the first day that economic development property is purchased or acquired and ending five years after the commencement date; except that for a project with an enhanced investment as described above, the period ends eight years after the commencement date. The minimum investment must be completed within five years of the commencement date. For an enhanced investment, the applicable minimum investment and job requirements under Section 12-44-30(7) must be completed within eight years of the commencement date. For those sponsors that, after qualifying for the enhanced investment, have more than five hundred million dollars in capital invested in this State and employ more than one thousand people in this State, the investment period ends ten years after the commencement date. If the sponsor does not anticipate completing the project within these periods, the sponsor may apply to the county before the end of the investment period for an extension of time to complete the project. The extension may not exceed five years. If a project receives an extension of less than five years, the sponsor may apply to the county before the end of the extension period for an additional extension of time to complete the project for an aggregate extension of not more than five years. Unless approved as part of the original fee documentation, the county council of the county may approve an extension by resolution, a copy of which must be delivered to the department within thirty days of the date the resolution was adopted. An extension is not allowed for the time period in which the sponsor must meet the minimum investment requirement.
(14) 'Minimum investment' means an investment in the project of at least two and one-half million dollars within the investment period. If a county has an average annual unemployment rate of at least twice the state average during the last twenty-four month period based on data available on the most recent November first, the minimum investment is one million dollars. The department shall designate these reduced investment counties by December thirty-first of each year using data from the South Carolina Employment Security Commission and the United States Department of Commerce. The designations are effective for a sponsor whose fee agreement is signed in the calendar year following the county designation. For all purposes of this chapter, the minimum investment may include amounts expended by a sponsor or sponsor affiliate as a nonresponsible party in a voluntary cleanup contract on the property pursuant to Article 7, Chapter 56 of Title 44, the Brownfields Voluntary Cleanup Program, if the Department of Health and Environmental Control certifies completion of the cleanup. If the amounts under the Brownfields Voluntary Cleanup Program equal at least one million dollars, the investment threshold requirement of this chapter is deemed to have been met.
(20) 'Termination date' means the date that is the last day of a property tax year that is the nineteenth year following the first property tax year in which an applicable piece of economic development property is placed in service; provided, however, that the sponsor may apply to the county prior to the termination date for an extension of the termination date beyond the nineteenth year up to ten years. The county council of the county shall approve an extension by resolution upon a finding of substantial public benefit. A copy of the resolution must be delivered to the department within thirty days of the date the resolution was adopted. With respect to a fee agreement involving an enhanced investment, the termination date is the last day of a property tax year that is the twenty-ninth year following the first property tax year in which an applicable piece of economic development property is placed in service. If the fee agreement is terminated in accordance with Section 12-44-140, the termination date is the date the agreement is terminated."
F. Section 12-44-40(E) and (J) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(E) If a fee agreement is not executed within five years after action by the county identifying or reflecting the project, the real property or tangible personal property of a sponsor for which expenditures have been incurred by the sponsor with respect to the project does not qualify as economic development property. An action includes an inducement resolution adopted by the county council of the county.
(J)(1) Upon agreement of the parties, and except as provided in item (2), a fee agreement may be amended or terminated and replaced with regard to all matters, including the addition or removal of sponsors or sponsor affiliates.
(2) An amendment or replacement of a fee agreement must not be used to lower the millage rate, discount rate, assessment ratio, or, except as provided in Sections 12-44-30(13) and (20), increase the term of the agreement."
G. Section 12-44-70 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-44-70. A county, municipality, or special purpose district that receives and retains revenues from a payment in lieu of taxes may use a portion of the revenues for the purposes outlined in Section 4-29-68 without the requirements of issuing special source revenue bonds or complying with Section 4-29-68(A)(4) by providing a credit against or payment derived from the fee due from a sponsor."
H. This section takes effect upon approval by the Governor.
Jobs tax credit
SECTION 8. Section 12-6-3360(A) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"(A) Taxpayers that operate manufacturing, tourism, processing, warehousing, distribution, research and development, corporate office, qualifying service-related facilities, extraordinary retail establishment, qualifying technology intensive facilities, and banks as defined pursuant to this title are allowed an annual jobs tax credit as provided in this section. In addition, taxpayers that operate retail facilities and service-related industries qualify for an annual jobs tax credit in counties designated as least developed or distressed, and in counties that are under developed and not traversed by an interstate highway. As used in this section, 'corporate office' includes general contractors licensed by the South Carolina Department of Labor, Licensing and Regulation. Credits pursuant to this section may be claimed against income taxes imposed by Section 12-6-510 or 12-6-530, bank taxes imposed pursuant to Chapter 11 of this title, and insurance premium taxes imposed pursuant to Chapter 7 of Title 38, and are limited in use to fifty percent of the taxpayer's South Carolina income tax, bank tax, or insurance premium tax liability. In computing a tax payable by a taxpayer pursuant to Section 38-7-90, the credit allowable pursuant to this section must be treated as a premium tax paid pursuant to Section 38-7-20."
Property tax exemption
SECTION 9. Section 12-37-220 of the 1976 Code, as last amended by Act 389 of 2006, is further amended by adding an appropriately numbered item at the end to read:
"( ) Real property not subject to property tax, leased by a state agency, county, municipality, other political subdivision, or other state entity to an entity that would not be subject to property tax if the entity owned the property."
Reassessment may be postponed
SECTION 10. Notwithstanding another provision of law, a county council by ordinance may delay implementation of values in a countywide assessment and equalization plan scheduled for the current tax year until property tax year 2008. The provisions of this section do not alter the index of taxpaying ability as defined in Section 59-20-20(3).
Wine tastings
SECTION 11. Section 61-4-737 of the 1976 Code, as last amended by a 2007 act bearing Ratification Number 161, is further amended to read:
"Section 61-4-737. Notwithstanding another provision of law or regulation, the holder of a retail wine permit for off-premises consumption whose primary product is beer, wine, or distilled spirits may conduct, in accordance with department rulings or regulations, not more than twenty-four wine tastings at the retail location in a calendar quarter."
Contested hearings open to public
SECTION 12.A. Article 13, Chapter 60, Title 12 of the 1976 Code is amended by adding:
"Section 12-60-3312. Except as otherwise provided by law or proper judicial order, all proceedings and records of a contested case hearing of the administrative law court of a matter covered by the South Carolina Revenue Procedures Act are open to the public."
B. This section takes effect upon approval by the Governor and applies to all tax decisions and associated information filed of record, whether or not the decision in the contested case hearing was issued before, on, or after that date.
Retail facilities tax credits
SECTION 13.A. Section 6-34-40(C)(3) and (5) of the 1976 Code, as added by Act 285 of 2006, is amended to read:
"(3) The credit earned pursuant to this subsection by a general partnership, limited partnership, limited liability company, or any other entity taxed as a partnership must be passed through to its partners and may be allocated among any of its partners, including without limitation, an allocation of the entire credit to one partner, in a manner agreed by the partners which is consistent with Subchapter K of the Internal Revenue Code. As used in this subsection, the term 'partner' means a partner, member, or owner of an interest in the pass-through entity, as applicable.
(5) The South Carolina Department of Revenue may promulgate regulations to verify the site's eligibility in accordance with the provisions of this chapter."
B. This section takes effect upon approval by the Governor and subsection (C)(3) applies for rehabilitation expenses for eligible sites placed in service after June 30, 2006.
Definition of "individual"
SECTION 14. Section 12-2-20 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-2-20. As used in this title and in other titles that provide for taxes administered by the department, and unless otherwise required by the context, the term:
(1) 'person' includes any individual, trust, estate, partnership, receiver, association, company, limited liability company, corporation, or other entity or group; and
(2) 'individual' means a human being."
Applicability of federal provisions
SECTION 15. Section 12-6-40(C) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(C) If a taxpayer complies with the provisions of Internal Revenue Code Section 367 (Foreign Corporations), it is not necessary for the taxpayer to obtain the approval of the department. A taxpayer filing a paper return shall attach a copy of the approval received from the Internal Revenue Service to its next South Carolina income tax return. A taxpayer filing an electronic return shall keep a copy of the approval with his tax records."
Pass-through trade and business income
SECTION 16.A. Section 12-6-545(E)(1) of the 1976 Code, as last amended by Act 386 of 2006, is further amended to read:
"(1) Notwithstanding subitem (A)(1)(d) of this section, if a taxpayer owns an interest in one or more pass-through businesses and his total South Carolina taxable income from pass-through entities for which he performs personal services is one hundred thousand dollars or less, excluding capital gains and losses, then the taxpayer may elect, instead of determining the actual amount of active trade or business income related to his personal services, to treat fifty percent of his active trade or business income as not related to his personal services. For purposes of this item, the term 'taxpayer' includes both taxpayers who file a joint return."
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
Deductions from taxable income
SECTION 17.A. Section 12-6-1140(10) of the 1976 Code, as last amended by Act 242 of 2006, is further amended to read:
"(10)(a) a deduction calculated as provided in this item for a volunteer firefighter, rescue squad member, volunteer member of a Hazardous Materials (HAZMAT) Response Team, reserve police officer, Department of Natural Resources deputy enforcement officer, or member of the State Guard not otherwise eligible for this exemption.
(b) An individual may receive only one deduction pursuant to this item. The Board of Economic Advisors annually shall estimate a maximum deduction that may be permitted under this section for a taxable year based on an individual income tax revenue loss of three million one hundred thousand dollars attributable to this deduction and shall certify that maximum deduction to the Department of Revenue and for the applicable taxable year, the maximum deduction amount must not exceed the lesser of the certified estimate or three thousand dollars.
(c)(i) Only a volunteer earning a minimum number of points pursuant to Section 23-9-190 is eligible for this deduction unless otherwise provided in this item.
(ii) In the case of a reserve police officer and instead of minimum points determining eligibility, this deduction is allowed only if the reserve police officer's coordinator-supervisor certifies in writing to the officer that the officer met all requirements of Chapter 28, Title 23 applicable to a reserve police officer for the entire taxable year.
(iii) In the case of a Department of Natural Resources deputy enforcement officer and instead of minimum points determining eligibility, this deduction is allowed only if the deputy enforcement officer's supervisor certifies in writing to the officer that the officer met all requirements of Section 50-3-315 for the entire taxable year.
(iv) In the case of a member of the State Guard and instead of minimum points determining eligibility, this deduction is allowed only if the State Guard member completes a minimum of sixteen hours of training or drill each month, equating to one hundred ninety-two hours a year, and the member's commanding officer certifies in writing to the member that the member met these requirements.
(d) These certifications from supervisors of taxpayers claiming the deduction must be on a form approved by the department. The department may require a copy of the certification be attached to the taxpayer's income tax return or otherwise be made available to the department."
B. This section takes effect upon approval by the Governor and applies to taxable years beginning after 2005.
Jobs tax credit
SECTION 18.A. Section 12-6-3360(H) of the 1976 Code, as last amended by Act 277 of 2000, is further amended to read:
"(H) A credit claimed pursuant to this section but not used in a taxable year may be carried forward for fifteen years from the taxable year in which the credit is earned by the taxpayer. Credits that are carried forward must be used in the order earned and before jobs credits claimed in the current year. A taxpayer who earns credits allowed by this section and who also is eligible for the moratorium provided in Section 12-6-3367 may claim the credits and may carry forward unused credits beginning after the moratorium period expires."
B. This section takes effect upon approval by the Governor and applies to taxable years beginning after 2005.
Jobs tax credit
SECTION 19.A. Section 12-6-3360(M)(1) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"(1) 'Taxpayer' means a sole proprietor, partnership, corporation of any classification, limited liability company, or association taxable as a business entity that is subject to South Carolina taxes as contained in Section 12-6-510, Section 12-6-530, Chapter 11 of Title 12, or Chapter 7 of Title 38."
B. This section takes effect upon approval by the Governor.
Jobs tax credit
SECTION 20.A. Section 12-6-3360(M)(10) of the 1976 Code is amended to read:
"(10) 'Corporate office facility' means a corporate headquarters that meets the definition of a 'corporate headquarters' contained in Section 12-6-3410(J)(1). The corporate headquarters of a general contractor licensed by the South Carolina Department of Labor, Licensing and Regulation qualifies even if it is not a regional or national headquarters as those terms are defined in Section 12-6-3410(J)(1)."
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
Historic rehabilitation tax credit
SECTION 21. Section 12-6-3535(A) of the 1976 Code, as last amended by Act 386 of 2006, and the first paragraph of Section 12-6-3535(B), as last amended by Act 69 of 2003, is further amended to read:
"(A) A taxpayer who is allowed a federal income tax credit pursuant to Section 47 of the Internal Revenue Code for making qualified rehabilitation expenditures for a certified historic structure located in this State is allowed to claim a credit against income taxes and license fees imposed by this title. For the purposes of this section, 'qualified rehabilitation expenditures' and 'certified historic structure' are defined as provided in the Internal Revenue Code Section 47 and the applicable treasury regulations. The amount of the credit is ten percent of the expenditures that qualify for the federal credit. To claim the credit allowed by this subsection, a taxpayer filing a paper return must attach a copy of the section of the federal income tax return showing the credit claimed, along with other information that the Department of Revenue determines is necessary for the calculation of the credit provided by this subsection.
(B) A taxpayer who is not eligible for a federal income tax credit under Section 47 of the Internal Revenue Code and who makes rehabilitation expenses for a certified historic residential structure located in this State is allowed to claim a credit against the tax imposed by this chapter. The amount of the credit is twenty-five percent of the rehabilitation expenses. To claim the credit allowed by this subsection, a taxpayer filing a paper return must attach a copy of the certification obtained from the State Historic Preservation Officer verifying that the historic structure has been rehabilitated in accordance with this subsection, along with information that the Department of Revenue determines is necessary for the calculation of the credit provided by this subsection. A taxpayer filing an electronic return shall keep a copy of the certification with his tax records."
Industry partnership fund tax credit
SECTION 22.A. Section 12-6-3585 of the 1976 Code, as added by Act 319 of 2006, is amended to read:
"Section 12-6-3585. (A) A taxpayer may claim as a credit against state income tax imposed by Chapter 6 of Title 12, bank tax imposed by Chapter 11 of Title 12, license fees imposed by Chapter 20 of Title 12, or insurance premiums imposed by Chapter 7 of Title 38, or any combination of them, one hundred percent of an amount contributed to the Industry Partnership Fund at the South Carolina Research Authority (SCRA), or an SCRA-designated affiliate, or both, pursuant to Section 13-17-88(E), up to a maximum credit of six hundred fifty thousand dollars for a single taxpayer, not to exceed an aggregate credit of two million dollars for all taxpayers in tax year 2006; up to a maximum credit of one million three hundred thousand dollars for a single taxpayer, not to exceed an aggregate credit of four million dollars for all taxpayers in tax year 2007; and up to a maximum credit of two million dollars for a single taxpayer, not to exceed an aggregate credit of six million dollars for all taxpayers for each tax year beginning after December 31, 2007. For purposes of determining a taxpayer's entitlement to the credit for qualified contributions for a given tax year in which more than the applicable aggregate annual limit on the credit is contributed by taxpayers for that year, taxpayers who have made contributions that are intended to be qualified contributions earlier in the applicable tax year than other taxpayers must be given priority entitlement to the credit. The SCRA shall certify to taxpayers who express a bona fide intention of making one or more qualified contributions as to whether the taxpayer is entitled to that priority.
(B) The amount of the credit is equal to one hundred percent of the amount of the taxpayer's qualified contributions to the Industry Partnership Fund, subject to the limitations in this section. The credit is nonrefundable.
(C) The use of the credit is limited to the taxpayer's applicable income or premium tax or license fee liability for the tax year of the taxpayer after the application of all other credits. An unused credit may be carried forward ten tax years after the tax year of the taxpayer during which the qualified contribution was made.
(D) A contribution is not a qualified contribution if it is subject to conditions or limitations regarding the use of the contribution.
(E) 'Taxpayer' means an individual, corporation, partnership, trust, bank, insurance company, or other entity having a state income or insurance premium tax or license fee liability who has made a qualified contribution.
(F) To qualify for the credit, the taxpayer shall retain a form provided by SCRA identifying the taxpayer and the year and amount of credit for which the taxpayer qualifies. The Department of Revenue may require a copy of the form be attached to the taxpayer's income tax return or be provided otherwise to the department.
(G) The department may require information and submissions by the taxpayer as it considers appropriate in relation to a taxpayer's claim of entitlement to the credit.
(H) The merger, consolidation, or reorganization of a corporation where tax attributes survive does not create new eligibility in a succeeding corporation, but unused credits may be transferred and continued by the succeeding corporation. In addition, a corporation or partnership may assign its rights to its unused credit to another corporation or partnership if it transfers all, or substantially all, of the assets of the corporation or partnership or all, or substantially all, of the assets of the trade or business or operating division of the corporation or partnership to another corporation or partnership.
(I) A taxpayer who claims the credit may not take a deduction in relation to the qualified contribution which gives rise to such credit."
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
Solar installation tax credit
SECTION 23. A. Section 12-6-3587(A) of the 1976 Code, as added by Act 386 of 2006, is amended to read:
"(A) There is allowed as a tax credit against the income tax liability of a taxpayer imposed by this chapter an amount equal to twenty-five percent of the costs incurred by the taxpayer in the installation of a solar energy heating or cooling system, or both, in a building in South Carolina owned by the taxpayer. The tax credit allowed by this section must not be claimed before the completion of the installation, and must be claimed for the year that the costs are incurred. The amount of the credit may not exceed three thousand five hundred dollars or fifty percent of the taxpayer's tax liability for that taxable year, whichever is less. If the amount of the credit exceeds three thousand five hundred dollars, the taxpayer may carry forward the excess for up to ten years."
B. This section takes effect upon approval by the Governor and applies to installation costs incurred after December 31, 2005.
Extension for filing return
SECTION 24. Section 12-6-4980 of the 1976 Code, as last amended by Act 363 of 2002, is further amended to read:
"Section 12-6-4980. (A) The department may allow an extension of time not to exceed six months for filing returns under this chapter or the annual report under Chapter 20 of this title. A taxpayer requesting an extension of time for filing, on or before the date the return or annual report is due, shall submit a tentative return and pay the full amount of the tax and license fee due.
(B) When a taxpayer is not required to make a payment of tax at the time of the extension, and the taxpayer has been granted an extension of time to file a federal income tax return, the taxpayer is not required to apply to the department for an extension of time to file the South Carolina return. The department shall accept a copy, if applicable, of a properly filed federal extension attached to the South Carolina return when filed. Taxes shown to be due on a return required pursuant to this chapter must be paid at the time the return is due to be filed, without regard to an extension of time granted for filing the return.
(C) An extension must not be granted to a taxpayer who has been granted an extension for a previous period and has not fulfilled the requirements of the previous period."
Nonresident seller withholding
SECTION 25. Section 12-8-580(D)(2) of the 1976 Code is amended to read:
"(2) The buyer is liable for the collection and payment of an amount due pursuant to this section. A lending institution, real estate agent, or closing attorney is not liable for the collection of an amount due from the buyer pursuant to this section. However, a lending institution, real estate agent, or closing attorney that has in fact withheld taxes is required timely to remit the amount withheld within the timeframe provided in item (1) of this subsection."
Nonresident distributee withholding
SECTION 26. Section 12-8-590(D) of the 1976 Code is amended to read:
"(D) A partnership required to withhold taxes on distributed or undistributed income shall make a return with each payment of tax to the department disclosing on the return the name, taxpayer identification number, the total amount of South Carolina taxable income paid or credited to each nonresident partner, the tax withheld for each nonresident partner, and other information the department requires. The partnership shall furnish to each nonresident partner a written statement as required by Section 12-8-1540(A) as proof of the amount of his share of distributed or undistributed income that has been withheld."
Overpayment of withheld tax
SECTION 27. Section 12-8-2020 of the 1976 Code is amended to read:
"Section 12-8-2020. (A) A refund or credit may be allowed for an overpayment of tax withheld pursuant to this chapter to:
(1) the withholding agent to the extent that the withholding agent did not withhold the overpayment amount from the taxpayer; or
(2) the taxpayer to the extent that the overpayment was withheld from the taxpayer.
(B) A refund or credit may be granted to a withholding agent who has withheld taxes in error if the withholding agent has refunded or unconditionally credited the amount erroneously withheld to the taxpayer and the amount is refunded or credited to the taxpayer before the issuance of the original wage and tax statement for the calendar year."
Holding company license fee
SECTION 28. Section 12-20-90 of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"Section 12-20-90. The amount of the license fee required by Section 12-20-50 for a bank holding company, insurance holding company system, and savings and loan holding company must be measured by the capital stock and paid-in surplus of the holding company exclusive of the capital stock and paid-in surplus of a bank, insurer, or savings and loan association that is a subsidiary of the holding company. For the purposes of this section, 'bank', 'bank holding company', and 'subsidiary' of a bank holding company have the same definitions as in Section 34-25-10; 'insurer', 'insurance holding company system', and a 'subsidiary' of an insurance holding company system have the same definitions as in Section 38-21-10; and savings and loan 'association', 'savings and loan holding company', and a 'subsidiary' of a savings and loan company have the same definitions as in Section 34-28-300."
Exemptions from business license tax
SECTION 29.A. Section 12-23-20(9) of the 1976 Code, as added by Act 335 of 2006, is amended to read:
"(9) electricity used by a technology intensive facility as defined in Section 12-6-3360(M)(14)(b) and qualifying for the sales tax exemption provided pursuant to Section 12-36-2120(65), and the equipment and raw materials including, without limitation, fuel used by such qualifying facility to generate, transform, transmit, distribute, or manage electricity for use in such a facility. The running of the periods of limitation within which the department may assess taxes pursuant to Section 12-54-85 is suspended during the same time period it is suspended in item (65)(d) of Section 12-36-2120."
B. This section takes effect June 6, 2006.
Exemptions from sales tax
SECTION 30.A. Section 12-36-2120(66) of the 1976 Code, as added by Act 335 of 2006, is amended to read:
"(66) electricity used by a technology intensive facility as defined in Section 12-6-3360(M)(14)(b) and qualifying for the sales tax exemption provided pursuant to item (65) of this section, and the equipment and raw materials including, without limitation, fuel used by such qualifying facility to generate, transform, transmit, distribute, or manage electricity for use in such a facility. The running of the periods of limitation within which the department may assess taxes pursuant to Section 12-54-85 is suspended during the same time period it is suspended in item (65)(d) of this section."
B. This section takes effect June 6, 2006.
Tax free certificate
SECTION 31. Section 12-36-2510(C) of the 1976 Code, as last amended by Act 145 of 2005, is further amended to read:
"(C) A seller that complies with the provisions of this section is relieved from any tax otherwise applicable if it is determined that the purchaser improperly claimed an exemption or exclusion by use of a certificate, provided the seller did not fraudulently fail to collect or remit the tax, or both, or solicit a purchaser to participate in an unlawful claim of an exemption. The liability for tax shifts to the purchaser who improperly claimed the exemption or exclusion by use of the certificate."
Credits for tax relief
SECTION 32. Section 12-37-270(C) of the 1976 Code, as last amended by Act 386 of 2006, is further amended to read:
"(C) The department may promulgate regulations necessary to carry out the provisions of this section."
Extension for filing or paying tax
SECTION 33. Section 12-54-70(a) of the 1976 Code is amended to read:
"(a) The department may allow further time for the filing of returns or remitting of tax due required by the provisions of law administered by the department. The request for an extension must be filed with the department on or before the day the return of the tax is due. Except as otherwise provided in this section, the department may allow an extension of time not to exceed six months. A tentative return is required reflecting one hundred percent of the anticipated tax to be paid for the taxable period, to be accompanied by a remittance for the tentative tax liability. Interest at the rate provided in Section 12-54-25, calculated from the date the tax was originally due, must be added to the balance due whenever an extension to file or to remit tax due is granted."
Time limits on assessments
SECTION 34.A. Section 12-54-85(C) of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:
"(C) Taxes may be determined and assessed after the thirty-six month limitation if:
(1) there is fraudulent intent to evade the taxes;
(2) the taxpayer failed to file a return or document as required by law;
(3) there is a twenty percent understatement of the total of all taxes required to be shown on the return or document. The taxes in this case may be assessed at any time within seventy-two months from the date the return or document was filed or due to be filed, whichever is later. For the purpose of this item, the total of all taxes required to be shown on the return is the total of all taxes required to be shown on the return before any reduction for estimated payments, withholding payments, other prepayments, or discount allowed for timely filing of the return and payment of the tax due, but that amount must be reduced by another credit that may be claimed on the return;
(4) the person liable for any taxes consents in writing, before the expiration of the time prescribed in this section for assessing taxes due, to the assessment of the taxes after the time prescribed by this section; or
(5) the tax is a use tax imposed under Chapter 36 of this title, or a local use tax administered and collected by the department on behalf of a local jurisdiction, and the assessment of the use tax is the result of information received from, or as a result of exchange agreements with, other state or local taxing authorities, regional or national tax administration organizations, or the federal government. The use taxes in this case may be assessed at any time within twelve months after the department receives the information, but no later than seventy-two months after the last day the use tax may be paid without penalty."
B. This section takes effect upon approval by the Governor and applies to all assessments issued after that date.
Penalties for understatement of taxes
SECTION 35.A. Section 12-54-155(D)(2) of the 1976 Code, as last amended by Act 386 of 2006, is further amended to read:
"(2) In the case of underpayment attributable to a substantial valuation misstatement with respect to charitable deduction property, item (1) does not apply unless:
(a) the claimed value of the property was based on a qualified appraisal made by a qualified appraiser; and
(b) in addition to obtaining the appraisal, the taxpayer made a good-faith investigation of the value of the contributed property."
B. This section takes effect upon approval by the Governor and applies for tax periods beginning after December 31, 2006.
Disclosure by the department
SECTION 36. Section 12-54-240(B)(12), as last amended by Act 145 of 2005, and (13) of the 1976 Code, is further amended to read:
"(12)(a) disclosure to a state agency, county auditor, or county assessor of whether a resident or nonresident tax return was filed by a particular taxpayer, whether the return is joint or individual, the name of a taxpayer filing jointly with the taxpayer, the taxpayer's address as shown on the return, and what county code of residence is contained on the return;
(b) disclosure to a county auditor or county assessor of whether the four percent assessment pursuant to Section 12-43-220(c)(1) has been claimed by a taxpayer in a county;
(13) Reserved;"
Disclosure by the department
SECTION 37.A. Section 12-54-240(B) of the 1976 Code, as last amended by Act 386 of 2006, is further amended by adding at the end:
"(26) disclosure of information referred to in Section 12-60-3312."
B. This section takes effect upon approval by the Governor and applies to all tax decisions and associated information filed whether the decision was issued before or after that date.
Legislative intent
SECTION 38.A. Section 12-60-20 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-60-20. It is the intent of the General Assembly to provide the people of this State with a straightforward procedure to determine a dispute with the Department of Revenue and a dispute concerning property taxes. The South Carolina Revenue Procedures Act must be interpreted and construed in accordance with, and in furtherance of, that intent."
B. This section takes effect upon approval by the Governor.
Administrative tax process
SECTION 39. Section 12-60-90(C) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(C) Taxpayers may be represented during the administrative tax process by:
(1) the same individuals who may represent them in administrative tax proceedings with the Internal Revenue Service pursuant to Section 10.3(a), (b), and (c), Section 10.7(a), (c)(1)(i) through (c)(1)(vi), and (c)(1)(viii), and Section 10.7(d) and (e) of United States Treasury Department Circular No. 230; and
(2) a real estate appraiser who is registered, licensed, or certified pursuant to Chapter 60 of Title 40 during the administrative tax process in a matter limited to questions concerning the valuation of real property."
Tax millage increase limits
SECTION 40. Section 6-1-320(A) of the 1976 Code, as last amended by Act 57 of 2007, is further amended to read:
"(A) Notwithstanding Section 12-37-251(E), a local governing body may 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 average of the twelve monthly consumer price indexes for the most recent twelve-month period consisting of January through December of the preceding calendar year, plus, beginning in 2007, the percentage increase in the previous year in the population of the entity as determined by the Office of Research and Statistics of the State Budget and Control Board. If an entity experiences a reduction in population, the percentage change in population is deemed to be zero. 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."
Department determination
SECTION 41. Article 5, Chapter 4, Title 12 of the 1976 Code is amended by adding:
"Section 12-4-535. (A) The department may issue a department determination directing the appropriate county official to comply with all applicable state law relating to the valuation, assessment, or taxation of property.
(B) Within thirty days of the date the department determination is mailed or hand delivered, the county must respond in writing by first class mail or hand delivery to the department and state its agreement or disagreement with the department determination.
(C) If the county disagrees with, or fails to respond to, the department determination, the department by its director or designee or the county governing body by resolution may request a contested case hearing before the administrative law court within thirty days after the date the county disagreement notice was, or should have been, mailed or hand delivered. A request for a contested case hearing before the administrative law court must be made in accordance with its rules.
(D) The county governing body by resolution may request a department determination on any state law regarding the valuation, assessment, or taxation of property. Within thirty days of a request by a county governing body, the department may issue, in its discretion, the determination, which must be issued by first class mail or hand delivery to the county."
Powers and duties of the department
SECTION 42. Section 12-4-320 of the 1976 Code is amended by adding an appropriately numbered item at the end:
"( ) enter into an installment payment agreement with a taxpayer."
Applicability of federal law
SECTION 43. Section 12-6-40(A)(1)(a) of the 1976 Code, as last amended by Act 9 of 2007, is further amended to read:
"(a) Except as otherwise provided, 'Internal Revenue Code' means the Internal Revenue Code of 1986, as amended through December 31, 2006, and includes the effective date provisions contained in it."
Federal laws not adopted
SECTION 44.A. Section 12-6-50(2) of the 1976 Code is amended to read:
"(2) Sections 22 through 54, 515, 853, 901 through 908, and 960 relating to tax credits;"
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
Jobs tax credit
SECTION 45. Section 12-6-3360(B)(5)(f) and (h) of the 1976 Code, as added by Act 161 of 2005 and Act 386 of 2006, respectively, are amended to read:
"(f) In a county in which one employer has lost at least 1,500 jobs in a calendar year, the credit allowed is one tier higher than the credit for which the county would otherwise qualify. The one-tier-higher credit allowed by this subsection is allowed for five taxable years for jobs created in 2006, 2007, and 2008. This subsection does not apply to a job created in a county eligible for a higher tier pursuant to another provision of this section.
(h) In a county in which one employer has lost at least 1,500 jobs in calendar year 2006, the credit allowed is three tiers higher than the credit for which the county would otherwise qualify. The three-tier-higher credit allowed by this subsection is allowed for five taxable years for jobs created in 2007 and 2008. This subsection does not apply to a job created in a county eligible for a higher tier pursuant to another provision of this section."
Small business tax credit
SECTION 46.A. Section 12-6-3362(B) of the 1976 Code, as added by Act 389 of 2006, is amended to read:
"(B) Beginning with the year the new full-time jobs are created, the taxpayer is allowed a jobs tax credit in an amount equal to the credit amount calculated pursuant to Section 12-6-3360(C)(2) for not more than five consecutive years. A credit is not allowed for a year in which the new full-time job increase falls below the minimum level of two."
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
Sales tax exemption; construction materials
SECTION 47.A. Section 12-36-2120(67) of the 1976 Code, as added by Act 384 of 2006, is amended to read:
"(67) effective July 1, 2011, construction materials used in the construction of a new or expanded single manufacturing or distribution facility, or one that serves both purposes, with a capital investment of at least one hundred million dollars in real and personal property at a single site in the State over an eighteen-month period. The taxpayer must provide notice of the exemption, and the Department of Revenue may assess taxes owing in the manner provided in Section 12-36-2120(51)."
B. Notwithstanding the sales and use rates imposed pursuant to Chapter 36, Title 12 of the 1976 Code, the rate of tax imposed pursuant to that chapter on the gross proceeds of qualifying construction materials used in the construction of a single manufacturing or distribution facility, as provided in item (67), is four percent for sales from July 1, 2007, through June 30, 2008, three percent for sales from July 1, 2008, through June 30, 2009, two percent for sales from July 1, 2009, through June 30, 2010, and one percent for sales from July 1, 2010, through June 30, 2011.
Surety for payment of taxes
SECTION 48. Section 12-54-200(C) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(C) A person required to maintain a separate account must give the name of the financial institution, the account number, and other information the department requires. Taxes, penalties, and interest due must be withdrawn from the account by preprinted, consecutively numbered checks signed by a properly authorized officer, partner, manager, employee, or member of the taxpayer and made payable to the department. Monies deposited in the account must not be commingled with other funds. The department, at its discretion, may apply Section 12-54-250, if the amount due from the taxpayer is fifteen thousand dollars or more."
Disclosure by the department
SECTION 49. Section 12-54-240(B) of the 1976 Code, as last amended by Act 386 of 2006, is further amended by adding appropriately numbered items at the end:
"( ) disclosure of information to the State Treasurer necessary for the administration and enforcement of the Uniform Unclaimed Property Act;
( ) exchange of information between the department, the Department of Commerce and its agency, the Venture Capital Authority, and the Department of Insurance for the purpose of registering and verifying the existence, possession, transfer, and use of tax credits pursuant to Chapter 45 of Title 11."
Payment in readily available funds
SECTION 50.A. Section 12-54-250(A) of the 1976 Code, as last amended by Act 163 of 2002, is further amended to read:
"(A)(1) The South Carolina Department of Revenue may require, consistent with the cash management policies of the State Treasurer, that a person owing fifteen thousand dollars or more in connection with any return, report, or other document to be filed with the department or a withholding agent making at least twenty-four payments in a year pursuant to Section 12-8-1520(D) pay the tax liability to the State no later than the date the payment is required by law to be made, in funds that are available immediately to the State. 'Payment in immediately available funds' means payment by cash to the main office of the department before five o'clock p.m. or by electronic means established by the department, with the approval of the State Treasurer, which ensures the settlement of those funds in the state's account on or before the banking day following the due date of the tax as provided by law.
(2) Initiation of the transfer of funds must occur on or before the due date of the tax. If payment is made by means other than cash and settlement to the state's account does not occur on or before the banking day following the due date of the tax, payment is deemed to occur on the date settlement occurs.
(3) Failure to make timely payment in immediately available funds or failure to provide evidence of payment in a timely manner subjects the taxpayer to penalties and interest as provided by law for delinquent or deficient tax payments."
B. Section 12-54-250(B) of the 1976 Code is amended to read:
"(B) The department may provide alternative periodic filing and payment dates later than the dates otherwise provided by law for taxes collected by the department in those instances considered to be in the best interests of the State. An alternative date must not be later than the last day of the month in which the tax was otherwise due."
Estimation of tax liability
SECTION 51. Section 12-60-430 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-60-430. (A) If a taxpayer fails or refuses to make a report or to file a return required by the provisions of this title or required to be filed with the department, the department may make an estimate of the tax liability from the best information available and issue a proposed assessment for the taxes, including penalties and interest.
(B) If the department determines a return or report filed by a taxpayer is frivolous, the department may make an estimate of the tax liability from the best information available and issue a proposed assessment for the tax, including penalties and interest."
School district reimbursement
SECTION 52. Section 11-11-156(D) of the 1976 Code, as added by Act 57 of 2007, is amended to read:
"(D) Notwithstanding another provision of this section, in the case of a redevelopment project area created pursuant to Chapter 6, 7, or 12 of Title 31, the reimbursements provided pursuant to this section for the property tax exemption allowed by Section 12-37-220(B)(47) must include full payment to the city or county creating the redevelopment project area for amounts that would have been payable to the special tax allocation fund created pursuant to that chapter if no such exemption existed."
Tax credit certificates
SECTION 53. Section 11-45-55(I) of the 1976 Code, as added by Act 125 of 2005, is amended by adding at the end:
"(3) Notwithstanding Section 12-54-240(A), the authority, the Department of Commerce, the Department of Revenue, and the Department of Insurance may exchange information for the purpose of registering and verifying the existence, possession, transfer, and use of tax credits pursuant to this chapter."
Penalty prohibited
SECTION 54. A taxpayer must not be penalized for following the provisions of Section 401 of the Federal Tax Increase Prevention and Reconciliation Act of 2005 for South Carolina purposes.
Allocation and apportionment of business income
SECTION 55.A. Article 17, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-2252. (A) A taxpayer whose principal business in this State is (i) manufacturing or a form of collecting, buying, assembling, or processing goods and materials within this State, or (ii) selling, distributing, or dealing in tangible personal property within this State, shall make returns and pay annually an income tax that includes its income apportioned to this State. Its income apportioned to this State is determined by multiplying the net income remaining after allocation pursuant to Sections 12-6-2220 and 12-6-2230 by the sales factor defined in Section 12-6-2280.
(B) If a sales factor does not exist, the remaining net income is apportioned to the business's principal place of business."
B. This section takes effect upon approval by the Governor and applies for taxable years beginning after 2006.
Allocation and apportionment of business income
SECTION 56.A. Article 17, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-2295. (A) The terms 'sales' as used in Section 12-6-2280 and 'gross receipts' as used in Section 12-6-2290 include, but are not limited to, the following items if they have not been separately allocated:
(1) receipts from the sale or rental of property maintained for sale or rental to customers in the ordinary course of the taxpayer's trade or business including inventory;
(2) receipts from the sale of accounts receivable acquired in the ordinary course of trade or business for services rendered or from the sale or rental of property maintained for sale or rental to customers in the ordinary course of the taxpayer's trade or business if the accounts receivable were created by the taxpayer or a related party. For purposes of this item, a related person includes a person that bears a relationship to the taxpayer as described in Section 267 of the Internal Revenue Code;
(3) receipts from the use of intangible property in this State including, but not limited to, royalties from patents, copyrights, trademarks, and trade names;
(4) net gain from the sale of property used in the trade or business. For purposes of this subsection, property used in the trade or business means property subject to the allowance for depreciation, real property used in the trade or business, and intangible property used in the trade or business which is:
(a) not property of a kind that properly would be includible in inventory of the business if on hand at the close of the taxable year; or
(b) held by the business primarily for sale to customers in the ordinary course of the trade or business;
(5) receipts from services if the entire income-producing activity is within this State. If the income-producing activity is performed partly within and partly without this State, sales are attributable to this State to the extent the income-producing activity is performed within this State;
(6) receipts from the sale of intangible property which are unable to be attributed to any particular state or states are excluded from the numerator and denominator of the factor.
(B) The terms 'sales' as used in Section 12-6-2280 and 'gross receipts' as used in Section 12-6-2290 do not include:
(1) repayment, maturity, or redemption of the principal of a loan, bond, or mutual fund or certificate of deposit or similar marketable instrument;
(2) the principal amount received under a repurchase agreement or other transaction properly characterized as a loan;
(3) proceeds from the issuance of the taxpayer's stock or from sale of treasury stock;
(4) damages and other amounts received as the result of litigation;
(5) property acquired by an agent on behalf of another;
(6) tax refunds and other tax benefit recoveries;
(7) pension reversions;
(8) contributions to capital, except for sales of securities by securities dealers;
(9) income from forgiveness of indebtedness; or
(10) amounts realized from exchanges of inventory that are not recognized by the Internal Revenue Code."
B. This section takes effect upon approval by the Governor and applies for taxable years beginning after 2006.
Conduct of business in this State
SECTION 57.A. Section 12-6-2250 of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"Section 12-6-2250. (A) A taxpayer whose principal business in this State is (i) manufacturing or a form of collecting, buying, assembling, or processing goods and materials within this State, or (ii) selling, distributing, or dealing in tangible personal property within this State, shall make returns and pay annually an income tax that includes its income apportioned to this State. Its income apportioned to this State is determined by multiplying the net income remaining after allocation pursuant to Sections 12-6-2220 and 12-6-2230 by a fraction, the numerator of which is the property ratio, plus the payroll ratio, plus twice the sales ratio, and the denominator of which is four. However, where the sales ratio does not exist, the denominator of the fraction is the number of existing ratios, and where the sales ratio exists but the payroll ratio or the property ratio does not exist, the denominator of the fraction is the number of existing ratios plus one. The property, payroll, and sales ratios must be determined in accordance with Sections 12-6-2260, 12-6-2270, and 12-6-2280, respectively.
(B) For taxable years beginning in 2007 through 2010 only, a taxpayer in subsection (A) shall apportion income by using the method provided in Section 12-6-2250(A) and, if applicable, the method provided in Section 12-6-2252. If the calculation permitted in Section 12-6-2252 results in a reduction in income allocated to this State, the reduction is allowed as follows:
Taxable year beginning in: Percentage of reduction allowed:
2007 20
2008 40
2009 60
2010 80.
(C) For purposes of calculation of the license fee pursuant to Section 12-20-60, the percentage reduction is applied in the same manner as in subsection (B)."
B. This section takes effect upon approval by the Governor and applies for taxable years beginning after 2006.
Definition of "sales factor"
SECTION 58.A. Section 12-6-2280 of the 1976 Code is amended to read:
"Section 12-6-2280. (A) The sales factor is a fraction in which the numerator is the total sales of the taxpayer in this State during the taxable year and the denominator is the total sales of the taxpayer everywhere during the taxable year.
(B) The term 'sales in this State' includes sales of goods, merchandise, or property received by a purchaser in this State. The place where goods are received by the purchaser after all transportation is completed is considered the place at which the goods are received by the purchaser. Direct delivery into this State by the taxpayer to a person designated by a purchaser constitutes delivery to the purchaser in this State.
(C) Sales of tangible personal property to the United States government are not included in the numerator or the denominator of the sales factor. Only sales for which the United States government makes direct payment to the seller pursuant to the terms of a contract constitute sales to the United States government.
(D) For purposes of this section, items included in sales are as provided in Section 12-6-2295."
B. This section takes effect upon approval by the Governor and applies for taxable years beginning after 2006.
Income from other sources
SECTION 59.A. Section 12-6-2290 of the 1976 Code is amended to read:
"Section 12-6-2290. If the principal profits or income of a taxpayer are derived from sources other than those described in Section 12-6-2250 or Section 12-6-2310, the taxpayer shall apportion its remaining net income using a fraction in which the numerator is gross receipts from within this State during the taxable year and the denominator is total gross receipts from everywhere during the taxable year. For purposes of this section, items included in gross receipts are as provided in Section 12-6-2295."
B. This section takes effect upon approval by the Governor and applies for taxable years beginning after 2006.
Computation; apportionment; repeal
SECTION 60.A. Section 12-6-1130(6) of the 1976 Code is amended to read:
"(6) In computing the depletion deduction pursuant to Internal Revenue Code Sections 611 through 613, a taxpayer who allocates or apportions income pursuant to the provisions of Article 17 of this chapter has the option of:
(a) apportioning the deduction according to the appropriate South Carolina apportionment percentage provided in Sections 12-6-2252 through 12-6-2310; or
(b) allocating the deduction to South Carolina with respect to mines, oil and gas wells, and other natural deposits located in this State. The amount allocated to South Carolina may not exceed fifty percent of the net income apportioned to South Carolina by Sections 12-6-2252 through 12-6-2310."
B. Section 12-6-2240 of the 1976 Code is amended to read:
"Section 12-6-2240. All income remaining after allocation pursuant to Sections 12-6-2220 and 12-6-2230 is apportioned in accordance with Section 12-6-2252, or one of the special apportionment formulas provided in Sections 12-6-2290 through 12-6-2310."
C. Section 12-6-2290 of the 1976 Code is amended to read:
"Section 12-6-2290. If the principal profits or income of a taxpayer are derived from sources other than those described in Section 12-6-2252 or Section 12-6-2310, the taxpayer shall apportion its remaining net income using a fraction in which the numerator is gross receipts from within this State during the taxable year and the denominator is total gross receipts from everywhere during the taxable year. For purposes of this section, items included in gross receipts are as provided in Section 12-6-2295."
D. Sections 12-6-2250, 12-6-2260, and 12-6-2270 of the 1976 Code are repealed.
E. This section takes effect for tax years after 2010.
Authority to invest
SECTION 61. Section 6-5-10(a) of the 1976 Code is amended to read:
"(a) The governing body of any municipality, county, school district, or other local government unit or political subdivision and county treasurers may invest money subject to their control and jurisdiction in:
(1) obligations of the United States and its agencies, the principal and interest of which is fully guaranteed by the United States;
(2) obligations issued by the Federal Financing Bank, Federal Farm Credit Bank, the Bank of Cooperatives, the Federal Intermediate Credit Bank, the Federal Land Banks, the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Housing Administration, and the Farmers Home Administration, if, at the time of investment, the obligor has a long-term, unenhanced, unsecured debt rating in one of the top two ratings categories, without regard to a refinement or gradation of rating category by numerical modifier or otherwise, issued by at least two nationally recognized credit rating organizations;
(3)(i) general obligations of the State of South Carolina or any of its political units; or (ii) revenue obligations of the State of South Carolina or its political units, if at the time of investment, the obligor has a long-term, unenhanced, unsecured debt rating in one of the top two ratings categories, without regard to a refinement or gradation of rating category by numerical modifier or otherwise, issued by at least two nationally recognized credit rating organizations;
(4) savings and loan associations to the extent that the same are insured by an agency of the federal government;
(5) certificates of deposit where the certificates are collaterally secured by securities of the type described in (1) and (2) above held by a third party as escrow agent or custodian, of a market value not less than the amount of the certificates of deposit so secured, including interest; provided, however, such collateral shall not be required to the extent the same are insured by an agency of the federal government;
(6) repurchase agreements when collateralized by securities as set forth in this section;
(7) no load open-end or closed-end management type investment companies or investment trusts registered under the Investment Company Act of 1940, as amended, where the investment is made by a bank or trust company or savings and loan association or other financial institution when acting as trustee or agent for a bond or other debt issue of that local government unit, political subdivision, or county treasurer if the particular portfolio of the investment company or investment trust in which the investment is made (i) is limited to obligations described in items (1), (2), (3), and (6) of this subsection, and (ii) has among its objectives the attempt to maintain a constant net asset value of one dollar a share and to that end, value its assets by the amortized cost method;
(8) a political subdivision receiving Medicaid funds appropriated by the General Assembly in the annual general appropriations act may utilize appropriated funds and other monies generated by hospital operations to participate in principal protected investments in the form of notes, bonds, guaranteed investment contracts, debentures, or other contracts issued by a bank chartered in the United States or agency of a bank if chartered in the United States, financial institution, insurance company, or other entity which provides for full principal payment at the end of a contract term not to exceed twelve years if the issuer has received a rating in one of three highest general ratings categories issued by no fewer than two nationally recognized credit ratings organizations. No more than forty percent of the appropriated funds and other monies generated by hospital operations may be invested in the manner provided in this item. Revenue realized pursuant to these investments must be expended on health care services."
Sales tax exemption; amusement park
SECTION 62.A. Section 12-36-2120 of the 1976 Code, as last amended by Act 386 of 2006, is further amended by adding an appropriately numbered item at the end to read:
"( ) an amusement park ride and any parts, machinery, and equipment used to assemble, operate, and make up an amusement park ride or performance venue facility located in a qualifying amusement park or theme park and any related or required machinery, equipment, and fixtures located in the same qualifying amusement park or theme park.
(a) To qualify for the exemption, the taxpayer shall meet the investment and job requirements provided in subsubitem (i) of subitem (b) over a five-year period beginning on the date of the taxpayer's first use of this exemption. The taxpayer shall notify the Department of Revenue of its intent to qualify and use this exemption and upon receipt of the notification, the department shall issue an appropriate exemption certificate to the taxpayer to be used for qualifying purposes under this item. Within six months after the fifth anniversary of the taxpayer's first use of this exemption, the taxpayer shall notify the department, in writing, that it has or has not met the investment and job requirements of this item. If the taxpayer fails to meet the investment and job requirements, the taxpayer shall pay to the State the amount of the tax that would have been paid but for this exemption. The running of the periods of limitations for assessment of taxes provided in Section 12-54-85 is suspended for this time period beginning with the taxpayer's first use of this exemption and ending with notice to the department that the taxpayer has or has not met the investment and job requirements of this item.
(b) For purposes of this item:
(i) 'Qualifying amusement park or theme park' means a park that is constructed and operated by a taxpayer who makes a capital investment of at least two hundred fifty million dollars at a single site and creates at least two hundred fifty full-time jobs and five hundred part-time or seasonal jobs.
(ii) 'Related or required machinery, equipment, and fixtures' means an ancillary apparatus used for or in conjunction with an amusement park ride or performance venue facility, or both, including, but not limited to, any foundation, safety fencing and equipment, ticketing, monitoring device, computer equipment, lighting, music equipment, stage, queue area, housing for a ride, electrical equipment, power transformers, and signage.
(iii) 'Performance venue facility' means a facility for a live performance, nonlive performance, including any animatronics and computer-generated performance, and firework, laser, or other pyrotechnic show.
(iv) 'Taxpayer' means a single taxpayer or, collectively, a group of one or more affiliated taxpayers. An 'affiliated taxpayer' means a person or entity related to the taxpayer that is subject to common operating control and that is operated as part of the same system or enterprise. The taxpayer is not required to own a majority of the voting stock of the affiliate."
B. Notwithstanding the general effective date of this act, this section takes effect on the first day of the month succeeding the month in which this act is approved by the Governor.
Economic impact zone credit
SECTION 63.A. Chapter 14, Title 12 of the 1976 Code is amended by adding:
"Section 12-14-80. (A) There is allowed an economic impact zone tax credit pursuant to Section 12-14-60 for qualifying investments made by a manufacturer which:
(1) is engaged in this State in at least one economic impact zone, as defined in Section 12-14-30(1), in an activity or activities listed under the North American Industry Classification System Manual (NAICS) Section 326;
(2) is employing five thousand or more full-time workers in this State and having a total capital investment in this State of not less than two billion dollars; and
(3) has invested five hundred million dollars in capital investment in this State between January 1, 2006, and July 1, 2011.
(B) A taxpayer that qualifies for the tax credit allowed by this section may claim the credit earned pursuant to this section and credits earned pursuant to Section 12-6-3360 in the manner provided pursuant to Sections 12-6-3360 and 12-14-60, or as a credit in an amount equal to not more than fifty percent of the employee's withholding on the taxpayer's quarterly withholding tax returns. The taxpayer must elect to take the credit either as an income tax or a withholding tax credit but not both. A taxpayer must first take the credits as an income tax credit in a year in which the taxpayer has a corporate income tax liability. The withholding tax credit may be taken only when the taxpayer has used the maximum investment tax credit allowed against the corporate income tax for that year. The withholding credit may only be taken for qualifying investments made or placed in service after July 1, 2007. To claim the credit against the employee's withholding, the taxpayer must be in compliance with its withholding tax and other taxes due to the State."
B. This section takes effect July 1, 2007, and applies for capital investments placed in service outside of an economic impact zone after June 30, 2007, and for quarterly state withholding returns due on and after that date, provided that for the period July 1, 2007, to June 30, 2008, a taxpayer using this section many not reduce its state withholding tax to less than the withholding tax remitted for the period June 30, 2006, to July 1, 2007.
Property tax exemption; watercraft
SECTION 64. Section 12-37-220(B)(38) of the 1976 Code is amended to read:
"(38)(a) Watercraft and motors which have an assessment of not more than fifty dollars.
(b) By ordinance, a governing body of a county may exempt from the property tax, forty-two and 75/100 percent of the fair market value of a watercraft and its motor. This exemption for a watercraft motor applies whether the motor is located in, attached to, or detached from the watercraft."
Subchapter "S" bank shareholders
SECTION 65.A. Section 12-6-590(B) of the 1976 Code is amended to read:
"(B) A taxpayer who is a shareholder in a bank, as defined in Section 581 of the IRC, having a valid federal election under Subchapter S, is allowed a tax credit that equals the difference between: (i) the taxpayer's tax as computed pursuant to this chapter, including all credits other than the credit allowed pursuant to this section; and (ii) the tax as computed pursuant to this chapter, including all credits other than the credit allowed pursuant to this section, but excluding the taxpayer's prorata share of the net items of income and expense of the bank. The credit may not exceed the taxpayer's prorata share of the tax imposed on the bank pursuant to Section 12-11-30. These taxpayers are taxed pursuant to the provisions of this section and Section 12-6-545, notwithstanding the exception contained in Section 12-6-545(A)(1)."
B. This section takes effect upon approval by the Governor and applies to calendar years beginning January 1, 2007.
Boats with situs in this State
SECTION 66.A. Section 12-37-714 of the 1976 Code, as added by Act 386 of 2006, is amended to read:
"Section 12-37-714. In addition to any other provisions of law subjecting boats and boat motors to property tax in this State:
(1) A boat, including its motor if separately taxed, used in interstate commerce having a tax situs in this State and at least one other state is subject to property tax in this State. The value of such a boat must be determined based on the fair market value of the boat multiplied by a fraction representing the number of days present in this State. The fraction is determined by dividing the number of days the boat was present in this State by three hundred sixty-five days. A boat used in interstate commerce must be physically present in this State for thirty days in the aggregate in a property tax year to become subject to ad valorem taxation.
(2) A boat, including its motor if the motor is separately taxed, which is not currently taxed in this State and is not used exclusively in interstate commerce, is subject to property tax in this State if it is present within this State for sixty consecutive days or for ninety days in the aggregate in a property tax year. Upon written request by a tax official, the owner must provide documentation or logs relating to the whereabouts of the boat in question. Failure to produce requested documents creates a rebuttable presumption that the boat in question is taxable within this State.
(3) When a boat, or motor if separately taxed, is subject to a written contract for repairs and located in a marine repair facility in this State, the time periods provided pursuant to items (1) and (2) of this section are tolled."
B. This section takes effect upon approval by the Governor and is applicable for tax years beginning after 2007.
Special source revenue bonds
SECTION 67. Section 4-29-68(A)(2) of the 1976 Code, as last amended by Act 462 of 1996, is further amended to read:
"(2) The bonds are issued for the purpose of paying the cost of designing, acquiring, constructing, improving, or expanding (a) the infrastructure serving the issuer or the project, (b) for improved or unimproved real estate used in the operation of a manufacturing or commercial enterprise, or (c) aircraft which qualifies as a project pursuant to Section 12-44-30(16), which property is determined by the issuer to enhance the economic development of the issuer. Costs of issuance of the bonds also may be paid from bond proceeds. Bonds issued pursuant to this section to finance the acquisition of real or personal property may be additionally secured by a mortgage of that real or personal property."
Fund established
SECTION 68. Chapter 3 of Title 46 of the 1976 Code is amended by adding:
"Section 46-3-260. (A) There is established in the state treasury a separate and distinct fund known as the 'South Carolina Renewable Energy Infrastructure Development Fund'. The revenues of the fund must be distributed by the South Carolina Renewable Energy Revolving Loan Program and the South Carolina Renewable Energy Grant Program. Disbursement of these funds by the loan and grant programs must be approved by the South Carolina Renewable Energy Oversight Committee. The committee shall consist of seven members, one appointed by each of the following persons: the Governor, the Commissioner of Agriculture, the Secretary of Commerce, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the chairman of the Senate Finance Committee, and the chairman of the House Ways and Means Committee.
(1) The South Carolina Renewable Energy Revolving Loan Program shall provide low interest loans, with a rate not to exceed the Wall Street Journal prime interest rate, to an individual or organization that plans to build a qualified renewable energy production facility. A renewable energy production facility is a facility that produces energy or transportation fuels from biomass, solar, or wind resources. A loan from the program may provide up to fifty percent of the total cost of a project, but must not exceed two hundred fifty thousand dollars for each project. The Department of Agriculture shall administer the South Carolina Renewable Energy Revolving Loan Program, in cooperation with the South Carolina Institute of Energy Studies.
(2) The South Carolina Renewable Energy Grant Program shall provide grants to a private and public entity located in South Carolina for the purpose of assisting the entity to be more competitive in obtaining federal and other available grants that may generate renewable energy-related research and projects to directly benefit the State. The Department of Agriculture shall administer the South Carolina Renewable Energy Grant Program, in cooperation with the South Carolina Institute of Energy Studies and the South Carolina Research Authority. Grants are available in the following three categories:
(a) planning grants up to ten thousand dollars are available to a research institution or private organization to develop proposals to obtain federal grants and other funding sources for biomass, solar, and wind energy projects in South Carolina;
(b) matching grants up to two hundred thousand dollars are available for research and development projects that relate to development of South Carolina biomass, solar, and wind energy resources, provided that the grant does not exceed fifty percent of the total cost of the project; and
(c) matching grants up to two hundred thousand dollars are available for demonstration projects that validate the effectiveness of new and future biomass technologies and products, provided that the grant does not exceed fifty percent of the total cost of the demonstration project.
(B) The Department of Revenue may prescribe forms, procedures, issue policy documents, and distribute funds as necessary to ensure the orderly and timely implementation of the provisions herein. The Department of Revenue shall coordinate with the Department of Agriculture as necessary.
(C) Unexpended funds received by the Department of Revenue from Proviso 73.17 of the Fiscal Year 2006-2007 Appropriations Act and carried forward must be disbursed to these entities to meet the requirements of this provision: the Department of Revenue for the purpose of alternative fuel purchases incentive payments and the South Carolina Renewable Energy Infrastructure Development Fund established in this section."
Severability clause
SECTION 69. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
One subject clause
SECTION 70. The General Assembly finds that the sections presented in this act constitute one subject as required by Article III, Section 17 of the South Carolina Constitution, in particular finding that each change and each topic relates directly to or in conjunction with other sections to the subject of tort and other civil action reform as clearly enumerated in the title.
The General Assembly further finds that a common purpose or relationship exists among the sections, representing a potential plurality but not disunity of topics, notwithstanding that reasonable minds might differ in identifying more than one topic contained in the act.
Time effective
SECTION 71. This act takes effect upon the approval by the Governor, and is applicable for tax years beginning after 2007, except for Section 5, relating to Section 12-6-3415(A), which is applicable for tax years beginning after 2006, and Section 6, relating to Section 12-20-105, which is applicable for tax years beginning after 2003.
Ratified the 21st day of June, 2007.
Vetoed by the Governor -- 6/27/07.
Veto overridden by House -- 6/28/07.
Veto overridden by Senate -- 6/28/07.
This web page was last updated on Wednesday, December 2, 2009 at 3:41 P.M.