S 904 Session 112 (1997-1998)
S 0904 General Bill, By Washington
A BILL TO AMEND CHAPTER 37, TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO PROPERTY TAXES, BY ADDING ARTICLE 25 SO AS TO ENACT THE INCOME TAX
CREDIT FOR PROPERTY TAX RELIEF ACT.
01/14/98 Senate Introduced and read first time SJ-32
01/14/98 Senate Referred to Committee on Finance SJ-32
A BILL
TO AMEND CHAPTER 37, TITLE 12, CODE OF LAWS OF
SOUTH CAROLINA, 1976, RELATING TO PROPERTY TAXES,
BY ADDING ARTICLE 25 SO AS TO ENACT THE INCOME
TAX CREDIT FOR PROPERTY TAX RELIEF ACT.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Chapter 37, Title 12 of the 1976 Code is amended by
adding:
"Article 25
Income Tax Credit
for
Property Tax Relief Act
Section 12-37-3310. As used in this article:
(1) 'Income' means the sum of federal adjusted gross income as
defined in the Internal Revenue Code of the United States and all
nontaxable income including, but not limited to:
(a) the amount of capital gains excluded from adjusted gross
income;
(b) alimony;
(c) support money;
(d) nontaxable strike benefits;
(e) cash public assistance and public relief, not including relief
granted under this article;
(f) the gross amount of any pension or annuity, including
Railroad Retirement Act benefits and veterans' disability pensions;
(g) all payments received under the Federal Social Security and
state unemployment insurance law;
(h) nontaxable interest received from the federal government or
any of its instrumentalities;
(i) workers' compensation; and
(j) the gross amount of 'loss of time' insurance.
'Income' does not include gifts from nongovernmental sources, or
surplus foods or other relief in kind supplied by a public or private
agency.
(2) 'Household" means the association of persons who live in the
same dwelling, sharing its furnishings, facilities, accommodations,
and expenses. The term does not include bona fide lessees, tenants,
or roomers and boarders on contract.
(3) 'Household income' means all the income received in a
calendar year by all persons of a household while members of the
house including, but not limited to:
(a) compensation for services including fees, commissions, and
similar items;
(b) income derived from dealings in property;
(c) gains derived from dealings in property;
(d) interest;
(e) rents;
(f) royalties;
(g) dividends;
(h) alimony;
(i) income from life insurance and endowment contracts;
(j) annuities;
(k) pensions;
(l) income from discharge of indebtedness;
(m) distributive share of partnership gross income;
(n) income from an interest in an estate or trust; and
(o) federal old age, survivor, or disability benefits.
(4) 'Homestead' means the dwelling owned or rented, and so much
of the land surrounding it not exceeding one acre, as is reasonably
necessary for use of the dwelling as a home, and may consist of a part
of a multi-dwelling or multi-purpose building and a part of the land
upon which it is built. It does not include personal property such as
furniture, furnishings, or appliances, but a mobile home or a
houseboat may be a homestead.
(5) 'Owner' includes a vendee in possession under a land contract
and one or more joint tenants in common.
(6) 'Claimant' means a person who has filed a claim pursuant to
this article and was domiciled in this State for the entire calendar year
for which he files claim for relief under this article. When two or
more individuals of a household meet the qualifications for a
claimant, they may determine among them who the claimant is. If
they are unable to agree, they shall refer the matter to the South
Carolina Department of Revenue, and its decision is final.
(7) 'Property taxes accrued' means property taxes, exclusive of
special assessments, delinquent interest, and charges for service,
levied on a claimant's homestead in this State. For purposes of this
subsection, property taxes are 'levied' when the tax roll is delivered
to the local treasurer for collection. If a claimant owns his homestead
on the levy date, 'property taxes accrued' means taxes levied on the
levy date, even if the claimant does not own his homestead for the
entire year.
When a household owns and occupies two or more different
homesteads in this State in the same calendar year, 'property taxes
accrued' relates only to the property occupied by the household as a
homestead on the levy date. If a homestead is an integral part of a
large unit such as a farm or multi-purpose or multi-dwelling building,
'property taxes accrued' are that percentage of the total property taxes
accrued as the value of the homestead is of the total value. For
purposes of this subsection, 'unit' is the parcel of property covered by
a single tax statement of which the homestead is a part.
(8) 'Permanently and totally disabled' means the inability to
perform substantial gainful employment by reason of a medically
determinable impairment, either physical or mental, which has lasted
or is expected to last a continuous period of twelve months or more
or to result in death.
(9) 'Gross rent' means rental actually paid, at arms length, in cash
or its equivalent solely for the right of occupancy of a homestead,
exclusive of charges for utilities, services, furniture, furnishings, or
personal appliances furnished by the landlord as a part of the rental
agreement. When a claimant occupies two or more homesteads in the
year and does not own his homestead as of the levy date, 'gross rent'
means the total rent paid for the homestead most recently rented,
multiplied by a number whose numerator is twelve and whose
denominator is the number of months the homestead has been rented
by the claimant.
If the landlord and tenant have not dealt with each other at arms
length, and the department is satisfied that the gross rent charged was
excessive, it may adjust the gross rent to a reasonable amount for the
purpose of this article.
(10) 'Rent constituting property taxes accrued' means twenty
percent of the gross rent.
Section 12-37-3320(A) The right to file a claim under this act is
personal to the claimant and does not survive his death, but the right
may be exercised on behalf of a claimant by his legal guardian or
attorney-in-fact. If a claimant dies after having filed a timely claim,
the amount of the claim must be disbursed to another member of the
house as determined by the department. If the claimant was the only
member of his household, the claim may be paid to his personal
representative or administrator.
(B) If a person who was entitled to or eligible for the credit dies,
and the surviving spouse is at least fifty years of age and acquires a
fee simple title or life estate within nine months after the death of the
spouse, the surviving spouse, if qualified, may receive the credit
allowed in this section so long as the spouse remains unmarried.
(C) When a trustee holds legal title to a homestead for a resident
who is 65 years of age or older or is totally and permanently disabled
or blind, and the resident possesses the use of the dwelling for life,
the resident is eligible for the credit allowed in this section, if
otherwise qualified.
Section 12-37-3330. Subject to limitations provided in this article,
a claimant may claim in a year, as a credit against South Carolina
individual income taxes otherwise due on his income, a percentage
of income taxes accrued in the preceding calendar year. If the
allowable amount exceeds the income taxes otherwise due on a
claimant's income, the amount of the claim not used as an offset
against income taxes, after certification by the department, must be
paid to the claimant by balances retained by the State Treasurer for
general purposes. Interest is not allowed on a payment made to a
claimant pursuant to this article.
Section 12-37-3340. A claim with respect to property taxes
accrued may not be paid or allowed, unless the claim is actually filed
with and in the possession of the department on or before April 15.
Subject to the same conditions and limitations, claims may be filed
on or before April 15 with respect to property taxes accrued for the
next calendar year. In case of sickness, absence, or other disability,
or for other good cause shown, the department may extend, for not
more than six months, the time for filing a claim.
Section 12-37-3350. The amount of a claim otherwise payable
under this article may be applied by the department against a liability
outstanding against the claimant, or against the claimant's spouse
who was a member of the claimant's household in the year to which
the claim relates.
Section 12-37-3360. Only one claimant a household a year is
entitled to the credit allowed by this article.
Section 12-37-3370. The amount of a claim made pursuant to this
article is determined as follows:
(1) For a taxable year, a claimant is allowed a credit equal to the
applicable percentage of property taxes accrued, upon the
individual's homestead for the taxable year as set forth in this
schedule:
If household incomeThen the taxpayer is entitled
(rounded to the to credit for property tax paid
nearest income) in excess of this percent of that
is: income.
$0-999 2.0%
4,000-7,0002.25%
8,000-11,9992.50%
12,000-15,999 2.75%
16,000 or more 3.0%
(2) The department shall prepare a table under which claims under
this article must be determined. The table must be published in the
department's official rules and placed in the appropriate forms. The
amount of claim shown in this table for each bracket must be
computed only to the nearest dollar.
Section 12-37-3380. The department shall make available suitable
forms with instructions for claimants, including a form which may be
included with or separate from the individual income tax return. The
claim must be in the form prescribed by the department. Claimants
who certify on the prescribed form that there is no income tax
liability do not have to file an individual income tax return.
Section 12-37-3390. Every claimant under this article shall supply
to the department, in support of his claim, a receipt for property taxes
paid for purposes of this article and any changes of homestead.
Section 12-37-3400. If on the audit of a claim filed under this
article the department determines the amount to have been incorrectly
determined, the claim must be corrected. If the claim has been
refunded or allowed as a credit against income taxes otherwise
payable, the amount of the credit disallowed or refunded in error may
be recovered by assessment as income taxes are assessed with
applicable interest allowed by Section 12-54-25.
Section 12-37-3410. A claim for relief under this article is not
allowed to a person who is a recipient of public funds for the
payment of the property taxes accrued during the period for which
the claim is filed.
Section 12-37-3420. A claim must be disallowed if the department
finds that the claimant received title to his homestead primarily for
the purpose of receiving benefits under this article."
SECTION 2. Upon approval by the Governor, this act takes effect
for property tax years beginning after 1998.
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