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TO AMEND SECTION 12-21-620, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TAXATION ON CIGARETTES, SO AS TO INCREASE THE AMOUNT OF TAX ON EACH CIGARETTE FROM THREE AND ONE-HALF MILLS TO TWO CENTS; TO ADD SECTION 44-6-157 SO AS TO PROVIDE THAT THE REVENUE GENERATED FROM THE TAXATION ON CIGARETTES MUST BE USED TO EXPAND MEDICAID COVERAGE TO CHILDREN EIGHTEEN YEARS OF AGE AND YOUNGER WHOSE FAMILY INCOME DOES NOT EXCEED TWO HUNDRED PERCENT OF THE FEDERAL POVERTY LEVEL; AND TO CREATE THE HEALTH CARE TRUST FUND TO PROVIDE MEDICAID BENEFITS TO INDIVIDUALS WHOSE FAMILY INCOME DOES NOT EXCEED ONE HUNDRED PERCENT OF THE FEDERAL POVERTY LEVEL AND WHO ARE UNINSURED AND TO PROVIDE THAT REVENUE IN EXCESS OF THE CHILDREN'S MEDICAID COVERAGE FROM THE CIGARETTE TAX MUST BE CREDITED TO THE HEALTH CARE TRUST FUND; AND TO AMEND SECTION 12-36-910, AS AMENDED, RELATING TO SALES TAXES GENERALLY, SO AS TO PROVIDE THAT AS OF JULY 1, 2009, THE THREE PERCENT SALES TAX IS ELIMINATED ON UNPREPARED FOOD WHICH LAWFULLY MAY BE PURCHASED WITH UNITED STATES DEPARTMENT OF AGRICULTURE FOOD COUPONS, TO PROVIDE FOR CERTAIN GENERAL FUND TRANSFERS TO THE EDUCATION IMPROVEMENT ACT FUND FOR EACH FISCAL YEAR TO OFFSET EIA REVENUES LOST AS A RESULT OF THE LOSS OF SALES TAX ON THE SALE OF UNPREPARED FOOD, AND TO REDUCE THE SALES TAX ON UNPREPARED FOOD TO TWO PERCENT AS OF JULY 1, 2007, AND ONE PERCENT AS OF JULY 1, 2008.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-21-620 of the 1976 Code is amended to read:
"Section 12-21-620. There shall be levied, assessed, collected, and paid in respect to the articles containing tobacco enumerated in this section the following amounts:
(1) upon all cigarettes made of tobacco or any substitute for tobacco, three and one-half mills two cents on each cigarette;
(2) upon all tobacco products, as defined in Section 12-21-800, five percent of the manufacturer's price.
Manufacturer's price as used in this section is the established price at which a manufacturer sells to a wholesaler."
SECTION 2. Article 2, Chapter 6, Title 44 of the 1976 Code is amended by adding:
"Section 44-6-157. (A) The Department of Health and Human Services shall expand coverage under the state Medicaid program to children eighteen years of age and under whose family income does not exceed two hundred percent of the federal poverty level.
(B) Revenue generated pursuant to Section 12-21-620(1) must be expended to fund the Medicaid coverage provided for in subsection (A), and the remaining funds must be credited to the Health Care Trust Fund created pursuant to subsection (C).
(C)(1) There is created in the State Treasury the Health Care Trust Fund that is separate and distinct from the general fund of the State and all other funds. Revenue remaining from the funds expended pursuant to subsection (B) must be credited to the Health Care Trust Fund and used by the Department of Health and Human Services as the state match for federal Medicaid funding to provide Medicaid coverage to individuals nineteen years of age and older who are uninsured and whose family income does not exceed one hundred percent of the federal poverty level.
(2) Monies in the fund are supplementary and may not be used to replace recurring monies appropriated from the general fund of the State or from other funds for the support of the Medicaid program. This fund is exempt from reductions imposed by law as a result of general fund shortfalls. Earnings on fund revenues must be credited to the fund and used for the same purposes. Revenue in the fund not expended during a fiscal year are carried forward to the succeeding fiscal year and must be used for the same purposes.
(3) Annually, the department shall revise the benefits offered pursuant to subsection (C)(1) so that no more funds are expended for this Medicaid coverage than are available in the Health Care Trust Fund.
(D) The department shall apply for any waivers necessary for the implementation of this section."
SECTION 3. Section 12-36-910(D) of the 1976 Code, as added by Act 388 of 2006, is amended to read:
"(D)(1) Notwithstanding the rate of the tax imposed pursuant to subsection (A) of this section or the rate of any other sales tax imposed pursuant to this chapter and the rate of any use tax imposed pursuant to this chapter, the sales and use tax on the gross proceeds of sales or sales price of unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons is three percent.
(2) There is transferred from the general fund of the State to the EIA Fund in fiscal year 2006-2007 the revenue estimated by the Board of Economic Advisors to equal EIA revenue not received as a result of the two percent sales tax differential provided pursuant to this subsection subsection (D)(1).
(3) Notwithstanding the rate of the tax imposed pursuant to subsection (D)(1), the sales and use tax on the gross proceeds of sales or sales price of unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons is eliminated effective July 1, 2009. There is transferred from the general fund of the State to the EIA Fund the revenue estimated by the Board of Economic Advisors to equal EIA revenue not received as a result of the loss of this sales tax revenue."
SECTION 4. Notwithstanding the rates of tax imposed pursuant to Section 12-36-910 of the 1976 Code, as amended in Section 3 of this act, or any other sales or use tax imposed pursuant to Chapter 36, Title 12, the rate of tax imposed on the gross proceeds of sales or sales price of unprepared food eligible for purchase with United States Department of Agriculture food coupons is two percent from July 1, 2007, through June 30, 2008 and one percent from July 1, 2008 through June 30, 2009.
SECTION 5. This act takes effect July 1, 2007.
This web page was last updated on Monday, June 22, 2009 at 2:41 P.M.