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Bill 1333

                    Current Status

Bill Number:                      1333
Type of Legislation:              General Bill GB
Introducing Body:                 Senate
Introduced Date:                  20020605
Primary Sponsor:                  Reese
All Sponsors:                     Reese
Drafted Document Number:          l:\council\bills\bbm\9228htc02.doc
Residing Body:                    Senate
Current Committee:                Finance Committee 06 SF
Subject:                          Property transferred pursuant to stock 
                                  options, additional income tax applies under 
                                  certain conditions


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
Senate  20020605  Introduced, read first time,           06 SF
                  referred to Committee


              Versions of This Bill

TO AMEND SECTION 12-6-1130, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO MODIFICATIONS TO DEDUCTIONS PROVIDED IN THE INTERNAL REVENUE CODE FOR PURPOSES OF THE SOUTH CAROLINA INCOME TAX ACT, SO AS TO REQUIRE AN ADDITION TO SOUTH CAROLINA TAXABLE INCOME FOR ANY AMOUNT DEDUCTED FOR FEDERAL INCOME TAX PURPOSES WITH RESPECT TO PROPERTY TRANSFERRED PURSUANT TO STOCK OPTIONS WHICH EXCEEDS THE AMOUNT THE TAXPAYER TREATED AS AN EXPENSE FOR THE PURPOSE OF ASCERTAINING INCOME, PROFIT, OR LOSS IN A REPORT OR STATEMENT TO SHAREHOLDERS, PARTNERS, OTHER PROPRIETORS, OR BENEFICIARIES AND TO REQUIRE THE DIRECTOR OF THE SOUTH CAROLINA DEPARTMENT OF REVENUE TO PRESCRIBE PROCEDURES FOR THE APPLICATION OF THIS PROVISION WHERE THE STOCK OPTION IS GRANTED BY A PARENT OR SUBSIDIARY CORPORATION OF THE EMPLOYER CORPORATION.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 12-6-1130 of the 1976 Code is amended by adding at the end:

"(12) The deduction allowed pursuant to Internal Revenue Code Section 83(h) for property transferred in connection with a stock option is not allowed as a deduction from South Carolina taxable income to the extent the federal deduction exceeds the amount the taxpayer treated as an expense for the purpose of ascertaining income, profit, or loss in a report or statement to shareholders, partners, or other proprietors or beneficiaries. The director of the department shall prescribe procedures for the application of this item in cases where the stock option is granted by a parent or subsidiary corporation, within the meaning of Internal Revenue Code Section 424, of the employer corporation."

SECTION 2. Upon approval by the Governor, this act is effective for taxable years beginning after 2002.

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