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Printed Page 4430, May 29
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| (J) For a taxpayer which plans a significant expansion in its labor forces at a location in this State, the appropriate agency shall prescribe certification procedures to ensure that the taxpayer can claim credits in future years even if a particular county is removed from the list of less least developed, under developed or moderately developed counties.
(K) (1) In addition to those credits allowed under subsection (C) of this section a corporation, partnership, or limited liability company that qualifies for a credit under this section as an S corporation, partnership, or limited liability company, entitles each shareholder of the S corporation, partner of the partnership, or member of the limited liability company to a nonrefundable credit against taxes imposed pursuant to Section 12-6-510.
(2) The amount of the credit allowed a shareholder, partner, or owner of a limited liability company by this subsection is equal to the shareholder's percentage of stock ownership, partner's interest in the partnership, or member's interest in the limited liability company for the taxable year multiplied by the amount of the credit the taxpayer would have been entitled to if it were taxed as a corporation.
(3) A credit claimed under this subsection but not used in a taxable year may be carried forward for ten fifteen years from the close of the tax year in which the credit is earned by the S corporation, partnership, or limited liability company. However, the credit established by this section taken in one tax year may not exceed fifty percent of the taxpayer's tax liability under Section 12-6-510.
(L) Notwithstanding any other provision of this section, a county with a population under twenty thousand as determined by the 1990 most recent United States Census shall receive the next increased credit designation is considered a less developed county for purposes of the credit allowed by this section.
(M) As used in this section:
(1) `Taxpayer' means a sole proprietor, partnership, corporation of any classification, limited liability company, or association taxable as a business entity which is subject to South Carolina taxes as contained in Sections 12-6-510 and 12-6-530 and Chapter 7 of Title 38.
(2) `Appropriate agency' means the Department of Revenue and Taxation for corporations subject to tax under Section 12-6-530 and the
(3) `New job' means a job created in this State at the time a new facility or an expansion is initially staffed. The term does not include a job created when an employee is shifted from an existing location in this State to a new or expanded facility. The term `new job' also includes existing jobs at a facility of an employer which are reinstated after the employer has rebuilt the facility due to its destruction by accidental fire, natural disaster, or act of God. Destruction for purposes of this provision means that more than fifty percent of the facility was destroyed. The year of reinstatement is considered to be the year of creation of the job. All such jobs so reinstated qualify for the credit under this section, and no comparison is required to be made between the number of full-time jobs of the employer in the taxable year and the number of full-time jobs of the employer with the corresponding period of the prior taxable year.
(4) `Full-time' means a job requiring a minimum of thirty-five hours of an employee's time a week for the entire normal year of company operations or a job requiring a minimum of thirty-five hours of an employee's time for a week for a year in which the employee was hired initially for or transferred to the South Carolina facility. For the purposes of this section, two half-time jobs are considered one full-time job. A `half-time job' is a job requiring a minimum of twenty hours of an employee's time a week for the entire normal year of the company's operations or a job requiring a minimum of twenty hours of an employee's time a week for a year in which the employee was hired initially for or transferred to the South Carolina facility.
(5) `Manufacturing facility' means an establishment where tangible personal property is produced or assembled.
(6) `Processing facility' means an establishment engaged in services such as manufacturing-related, computer-related, communication-related, energy-related, or transportation-related services, but the term `processing facility' does not include an establishment where retail sales of tangible personal property or services are made to retail customers. The term also includes a business entity engaged in processing agricultural, aquacultural, or maricultural products.
(7) `Warehousing facility' means an establishment where tangible personal property is stored but does not include any establishment where retail sales of tangible personal property are made to retail customers.
(8) `Distribution facility' means an establishment where shipments of tangible personal property are processed for delivery to customers. The term does not include an establishment where retail sales of tangible
(9) `Research and development facility' means an establishment engaged in laboratory, scientific, or experimental testing and development related to new products, new uses for existing products, or improving existing products. The term does not include an establishment engaged in efficiency surveys, management studies, consumer surveys, economic surveys, advertising, promotion, or research in connection with literary, historical, or similar projects.
(10) `Corporate office facility' means the location where corporate managerial, professional, technical, and administrative personnel are domiciled, and employed, and where corporate financial, personnel, legal, technical, support services, and other business functions are handled. Support services include, but are not limited to, claims processing, data entry, word processing, sales order processing, and telemarketing. The term does not include an establishment where retail sales of tangible personal property or retail services are made to retail customers except for a facility which processes customer sales orders by mail, telephone, or electronic means, if the facility also processes shipments of tangible personal property to customers and if at least seventy-five percent of the dollar amount of goods sold through the facility are sold to customers outside of this State.
(11) The terms `retail sales' and `tangible personal property' for purposes of this section are defined in Chapter 36 of this title.
(12) `Tourism facility' means an establishment used for a theme park; amusement park; historical, educational, or trade museum; botanical garden; cultural center; theater; motion picture production studio; convention center; arena; auditorium; or a spectator or participatory sports facility; and similar establishments where entertainment, education, or recreation is provided to the general public. Tourism facility also includes new hotel and motel construction, except that to qualify for the credits allowed by this section and regardless of the county in which the facility is located, the number of new jobs that must be created by the new hotel or motel is twenty or more. It does not include that portion of an establishment where retail merchandise or retail services are sold directly to retail customers.
(N) The maximum aggregate credit that may be claimed in any tax year for a single employee under this section and Section 12-6-3470(A)(1) is five thousand five hundred dollars."
B. The amendments to Section 12-6-3360 of the 1976 Code as amended by this section are effective for taxable years beginning after 1995, and in the case of qualifying jobs created after 1995, these jobs are not subject to a pre-existing revitalization agreement. For the purposes of Section 12-6-3360(B)(5) of the 1976 Code as amended by this section, the five-year period begins at the later of the date specified in Section 12-6-3360(B)(5) or the general effective date of this act. The provisions of Section 12-10-70(1)(b) of the 1976 Code, as amended by Act 231 of 1996, relating to the transferring of jobs, continue to apply for an affected project notwithstanding the repeal of Section 12-10-70 of the 1976 Code contained in this act.
SECTION 11. A. Section 12-6-3440 of the 1976 Code, as last amended by Act 40 of 1995, is further amended to read:
"Section 12-6-3440. (A) A taxpayer who employs persons who are residents of this State in any capacity may claim as a credit against his state income tax, bank tax, or premium tax liability an amount equal to fifty percent of his capital expenditures in this State but no more than one hundred thousand dollars for costs incurred in establishing a child care program for his employees. A credit claimed under this section, but not used or available for use in a taxable year, may be carried forward for the next ten taxable years from the close of the tax year in which the expenditures are made until the amount of the credit is taken.
(B) For purposes of this section, `expenditures for costs incurred in establishing a child care program' includes, but is not limited to, expenditures, including mortgage or lease payments, for playground and classroom equipment, kitchen appliances, cooking equipment, real property, including improvements in this State, and donations to a nonprofit corporation as defined in Internal Revenue Code Section 501(c)(3) for purposes of establishing a child care program. If credit is taken for donations by a corporation, a deduction to arrive at the net
(C) The taxpayer under subsection (A) also is allowed as a credit against his state income tax, bank tax, or premium tax liability an amount not exceeding fifty percent of the child care payments incurred by the taxpayer to operate a child care program for his employees in this State, or made directly to licensed or registered independent child care facilities in the name of and for the benefit of an employee in this State of the taxpayer, which employee's children are kept at the facility during the employee's working hours. The payment may not exceed the amount charged to other children of like age and abilities of individuals not employed by the taxpayer. The credits allowed by this subsection may not exceed a maximum of three thousand dollars for each employee.
Where an employee in this State chooses to utilize the provisions of this subsection which authorize direct payments to licensed child care facilities not operated by the employer, expenses attendant to the organization and administration of such a direct payment program incurred in the first year are also considered start-up expenses or expenditures for establishing a child care program for purposes of the fifty percent tax credit for start-up expenses authorized by subsection (A).
(D) For purposes of the credits allowed by subsection (B), the taxpayer is required to retain information concerning the child care facility's federal identification number, license or registration number, payment amount, and in whose name and for whose benefit the payments were made. In addition, a taxpayer is allowed to include in the amount of the payment for calculation of the credit any administrative cost associated with payment to licensed or registered independent child care facilities not to exceed two percent.
(E) The credits established by this section taken in any one tax year are also limited to an amount
not greater than fifty percent of a taxpayer's state income tax, bank tax, or premium tax liability
for that year.
(A)(1) A taxpayer located in this State may claim a credit against state income tax, bank tax,
or premium tax liability for all expenditures incurred, acting independently or jointly with others,
in establishing a child care program in this State for children of employees in this State.
(2) The amount of the credit is equal to fifty percent of all the expenditures incurred, but may
not exceed a maximum of one hundred thousand dollars in total. Any unused credit may be
carried forward for ten years.
(1) payments of mortgage and lease expenses for child care facilities;
(2) payments for playground and classroom equipment;
(3) payments for kitchen appliances and cooking equipment;
(4) payments for real property located in this State, including any improvements thereto that are used to provide child care facilities; and,
(5) donations to a nonprofit corporation as defined in Internal Revenue Code Section 501(c)(3) for purposes of establishing a child care program in this State.
If the credit allowed under subsection (A) is claimed for donations made to a nonprofit corporation, a taxpayer may not also claim a charitable deduction for the amounts donated.
(C)(1) Taxpayers who pay for child care for their employees in this State are also entitled to an additional credit for any of the following:
(a) Expenses incurred by the taxpayer to operate a child care program for taxpayers' employees' children;
(b) Payments made directly to a licensed or registered independent child care facility pursuant to a written plan in the name of, and for the benefit of, taxpayers' employees' children; or
(c) Payments made by a taxpayer directly to an employee pursuant to a written plan to reimburse employees for payments made to a licensed or registered independent child care facility for child care provided to taxpayers' employees' children.
(2) In order to qualify for the credit, the employee must work in this State.
(3) The payments made under (1)(b) and (1)(c) above must be for the care of children during the employee's working hours and may not exceed the amount charged to other children of individuals not employed by the taxpayer.
(4) A taxpayer is allowed to include in the amount of payment for calculation of the credit, any administrative costs associated with the payments made under subsections (1)(b) and (1)(c) above, however, these administrative expenses may not exceed two percent of the total amount paid under (1)(b) and (1)(c) above.
(5) The credit allowed by this subsection is equal to fifty percent of the expenses incurred or payments made during the tax year, but may not exceed a maximum of three thousand dollars for each employee.
(E) For purposes of the credit allowed by items(C)(1) above, the taxpayer is required to retain information concerning the child care facility's federal identification number, license or registration number, payment amount, and in whose name and for whose benefit the payments were made or reimbursed."
B. This section is effective for tax years beginning after 1995.
SECTION12. A. Items (1) and (2) of Section 12-6-3450(A) of the 1976 Code, as added by Act 76 of 1995, are amended to read:
"(1)(a) `Applicable federal military installation' means a federal military installation or other facility which is closed or realigned under:
(a)(i) The Defense Base Closure and Realignment Act of 1990;
(b)(ii) Title II of the Defense Authorization Amendments and Base Closure and Realignment Act; or
(c)(iii) Section 2687 of Title 10, United States Code.
(b) `Applicable federal facility' means a federal facility that has reduced its permanent employment by three thousand or more jobs after December 31, 1990.
(2) `Economic impact region' means a county or municipality, any portion of which is located within twenty-five miles of the boundaries of an applicable federal military installation or applicable federal facility, and any area not otherwise included as part of the economic impact region if the Division of State Development of the Department of Commerce determines the area to be adversely impacted by the closing or realignment of an applicable federal military installation or applicable federal facility."
B. This section is effective for taxable years beginning after 1995.
SECTION 13. A. Section 12-6-3470 of the 1976 Code, as added by Act 102 of 1995, is amended to read:
"Section 12-6-3470. (A) A taxpayer, who employs a person who within twelve months of becoming employed received Aid to Families with Dependent Children and who continuously has remained employed for twelve months is allowed a credit against taxes due under this chapter for wages paid to the employee in an amount equal to payments within this State for three months before becoming employed is eligible for an income tax credit of:
(1) twenty percent of the wages up to five thousand dollars paid for the first year to the employee for each full month of employment for the first twelve months of employment;
(3) ten percent of the wages up to five thousand dollars paid for the third year to the employee for each full month during the third twelve months of employment.
The maximum aggregate credit that may be claimed in a tax year for a single employee under this subsection and Section 12-6-3360 is five thousand five hundred dollars.
(B) In addition to the credits provided for in subsection (A) and Section 12-6-3360, a taxpayer who employs a person who received AFDC payments within this State for three months before becoming employed and employs that person to work full time in a least developed county, as defined in Section 12-6-3360, is allowed a credit in an amount equal to one hundred seventy-five dollars for each full month during the first thirty-six months of employment.
(C) The income tax credit provided by subsection (A) shall is not be allowed unless the taxpayer also makes available full individual or participating family health care coverage for the benefit of each qualified employee for which the credit is claimed earned.
(C) (D) The Department of Social Services and the South Carolina Employment Security Commission must make information available to employers interested in hiring AFDC recipients and must provide documentation to employers verifying a person's status as an AFDC recipient.
(D) This section applies to tax years beginning after 1994.
(E) No income tax credit provided for in subsection (A) may be taken under this section if the position filled by the former AFDC recipient was made available due to the termination or forced resignation of an employee for the purpose of obtaining the tax credit. Nothing in this section creates a private cause of action which does not otherwise exist at law.
(F) A credit claimed under this section but not used in a taxable year may be carried forward fifteen years from the taxable year in which the credit is earned."
B. This section is effective for taxable years beginning after 1995.
SECTION 14. Section 12-10-20 of the 1976 Code, as added by Act 25 of 1995, is amended by adding at the end:
"(4) The state's per capita income has not reached the United States average and certain rural, less developed counties have not experienced capital investment, per capita income, and job growth at a level equal to the state's average. The economic well-being of these areas will not be
SECTION 15. Section 12-10-30(7) of the 1976 Code, as added by Act 25 of 1995, is amended to read:
"(7) Reserved.`Services' means engagement primarily in an activity or activities listed under the Standard Industrial Classification (SIC) Code 80 according to the Federal Office of Management and Budget Standard Industrial Classification Manual 1987 edition."
SECTION 16. Section 12-10-40 of the 1976 Code, as last amended by Act 145 of 1995, is further amended to read:
"Section 12-10-40. Annually, by December thirty-first, using the most current data available, the State Budget and Control Board shall designate the enterprise zones within this State as provided in this section. Each enterprise zone must be located in this State and meet one of the following criteria:
(1) consist of a census tract in which either the median household income is eighty percent or less of the state average, or at least twenty percent of households are below the poverty level according to the most recent United States census;
(2) consist of a county classified as less developed pursuant to Section 12-7-1220;
(3) be located in a federal military base or installation which was closed, or designated to be closed, or in a federal facility in which the permanent employment was reduced by three thousand or more jobs after December 31, 1990;
(4) consist of a census tract with at least one hundred manufacturing jobs, at least fifty percent of which are textile and apparel jobs;
(5) consist of a census tract where a manufacturing facility has closed or experienced permanent layoffs and notified the Employment Security Commission under the federal Worker Adjustment and Retaining Notification (WARN) Act of 1988. The enterprise zone designation applies only for five years after the date of closure or layoff, and the number of jobs permanently lost must equal twenty-five percent or more of the total manufacturing workforce in the tract at the time the layoff occurred. The job loss shall have occurred no more than five years prior to the effective date of this chapter, except in any census tract where a catastrophic loss of one thousand or more jobs from a single employer has occurred since 1980 and fewer than half the job losses have been replaced. Any such tract will remain an enterprise zone until at least half the catastrophic job losses have been replaced. Where a municipality in which the catastrophic job loss occurred is split by census tracts, each tract
(6) consist of a census tract, any part of which is within twenty miles of a federal facility that has reduced its permanent civilian employment by three thousand or more jobs after December 31, 1990, for ten years after the effective date of this chapter;
(7) consist of a census tract in which a penal institution operated by the South Carolina Department of Corrections has closed; or
(8) consist of a research park established pursuant to Section 13-17-30 while the park is operated or controlled by the South Carolina Research Authority. The amount of benefits available to qualified businesses is determined by the county designation as defined in Section 12-6-3360(B), in which the business is located."
SECTION 17. Section 12-10-50 of the 1976 Code, as added by Act 25 of 1995, is amended to read:
"Section 12-10-50. To qualify for the benefits provided in this chapter, a business must be located within an enterprise zone this State and satisfy the following criteria:
(1) it must be primarily engaged in a business of the type identified in Section 12-7-1220, 12-6-3360 or in the alternative it must be primarily engaged in a business providing services as defined in Section 12-10-30;
(2) the business in the enterprise zone shall provide a benefits package to full-time employees which includes health care;
(3) the qualifying business shall enter into a revitalization agreement which is approved by the council, except that no revitalization agreement is required for a qualifying business with respect to Sections 12-10-70(2), 12-10-70(3), and Section 12-10-80(D); and
(4) the council shall determine that the available incentives are appropriate for the project, and the council shall certify to the department that the total benefits of the project exceed the costs to the public, and that the qualifying business otherwise fulfills the requirements of this chapter. No provision of this chapter must be construed to allow the council to negotiate a fee-in-lieu of property taxes agreement or approve job training or retraining."
SECTION 18. A. Subsections (A) through (D) of Section 12-10-80 of the 1976 Code, as amended by an act of 1996 bearing ratification number 234, are further amended to read:
"(A) Upon certification by the council to the department of the council's determination that a business is a qualifying business, a qualifying business may collect a job development fee by retaining an amount of employee withholding permitted by subsection (C) (B) or (D),
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