Download This Bill in Microsoft Word format
Indicates Matter Stricken
Indicates New Matter
H. 3372
STATUS INFORMATION
General Bill
Sponsors: Rep. Kirsh
Document Path: l:\council\bills\agm\18726mm07.doc
Companion/Similar bill(s): 366, 367, 3422, 3627
Introduced in the House on January 30, 2007
Introduced in the Senate on April 25, 2007
Last Amended on April 24, 2007
Currently residing in the Senate Committee on Finance
Summary: Department of Revenue
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
-------------------------------------------------------------------------------
1/30/2007 House Introduced and read first time HJ-6
1/30/2007 House Referred to Committee on Ways and Means HJ-11
4/18/2007 House Committee report: Favorable with amendment Ways and
Means HJ-6
4/24/2007 House Amended HJ-31
4/24/2007 House Read second time HJ-67
4/25/2007 House Read third time and sent to Senate HJ-13
4/25/2007 Senate Introduced and read first time SJ-15
4/25/2007 Senate Referred to Committee on Finance SJ-15
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
Indicates Matter Stricken
Indicates New Matter
AMENDED
April 24, 2007
H. 3372
S. Printed 4/24/07--H.
Read the first time January 30, 2007.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, 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 JOB 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 12-8-1520, AS AMENDED, RELATING TO DUTIES OF AN INCOME TAX WITHHOLDING AGENT TO DEPOSIT AND PAY WITHHOLDINGS, SO AS TO PROVIDE FOR RETURN AND REMITTANCE ON AN ANNUAL BASIS BY AN AGENT NOT REQUIRED TO WITHHOLD MORE THAN ONE THOUSAND DOLLARS IN A CALENDAR YEAR; 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 12-54-44, AS AMENDED, RELATING TO CRIMINAL PENALTIES IN CONNECTION WITH FILING A RETURN OR STATEMENT, SO AS TO PROVIDE FOR THE FELONY OF SUBMITTING A FALSE OR FRAUDULENT W-2 FORM AND TO PROVIDE PENALTIES; TO AMEND SECTION 12-54-70, AS AMENDED, RELATING TO EXTENSION OF TIME FOR FILING RETURNS OR PAYING TAX, 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 REPEAL SECTION 12-58-90 RELATING TO NOTICE TO TAXPAYER OF A HEARING IN CONNECTION WITH THE TAXPAYERS' BILL OF RIGHTS AND ACT 370 OF 2002 RELATING TO THE NURSING HOME FRANCHISE FEE; TO AMEND SECTION 6-1-32, 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; TO AMEND SECTION 12-37-670, AS AMENDED, RELATING TO THE OPTIONAL ACCELERATION OF LISTING REAL PROPERTY FOR PROPERTY TAX, SO AS TO ALLOW A COUNTY ORDINANCE IMPLEMENTING THE ACCELERATION TO USE A MONTHLY, QUARTERLY, OR SEMI-ANNUAL SCHEDULE, PROVIDE FOR THE ASSESSOR TO DO THESE LISTINGS, ELIMINATE PROVISIONS PROVIDING FOR PAYMENT IN THE SUCCEEDING TAX YEAR, AND PROVIDE THAT ADDITIONAL TAX IS DUE ON THE VALUE OF THE IMPROVEMENTS LISTED WITHOUT REGARD TO A TAX RECEIPT ISSUED EARLIER FOR PAYMENT ON THE UNIMPROVED PROPERTY; TO AMEND SECTION 12-37-2725, AS AMENDED, RELATING TO REFUNDS OF VEHICLE REGISTRATION FEES AND PERSONAL PROPERTY TAXES ON SUCH VEHICLES WHEN A TITLE IS TRANSFERRED OR THE VEHICLE OWNER REGISTERS THE VEHICLE IN ANOTHER STATE, SO AS TO PROVIDE AN ADDITIONAL METHOD OF PROOF FOR OBTAINING THE REFUND OF PERSONAL PROPERTY TAXES ON A VEHICLE; TO AMEND SECTIONS 12-37-3130 AND 12-37-3150, RELATING TO DEFINITIONS AND ASSESSABLE TRANSFERS OF INTEREST FOR PURPOSES OF THE SOUTH CAROLINA REAL PROPERTY VALUATION REFORM ACT, SO AS TO REVISE THE DEFINITION OF "CONVEYANCE" AND PROVIDE THAT TRANSFERS OCCUR WHEN INSTRUMENTS ARE EXECUTED WITHOUT REFERENCE TO THE DATE OF RECORDING AND TO PROVIDE THAT FAILURE TO RECORD GIVES RISE TO NO INFERENCE OR TO WHETHER OR NOT A TRANSFER HAS OCCURRED; TO AMEND SECTION 12-43-220, AS AMENDED, RELATING TO CLASSIFICATION AND ASSESSMENT OF PROPERTY FOR PURPOSES OF PROPERTY TAX, SO AS TO PROVIDE ADDITIONAL INFORMATION AND CERTIFICATION REQUIREMENTS TO OBTAIN THE SPECIAL FOUR PERCENT ASSESSMENT RATIO FOR OWNER-OCCUPIED RESIDENTIAL PROPERTY, TO PROVIDE PERIODIC REAPPLICATION AS THE ASSESSOR DETERMINES NECESSARY AND TO REVISE THE PENALTY FOR TIMELY FAILURE TO NOTIFY THE ASSESSOR WHEN REAL PROPERTY NO LONGER QUALIFIES FOR THIS SPECIAL ASSESSMENT RATIO; TO AMEND SECTION 12-51-50, AS AMENDED, AND SECTION 12-51-70, RELATING TO DELINQUENT TAX SALES, SO AS TO REPLACE THE REFERENCE TO LEGAL SALES DATE WITH THE ADVERTISED DATE FOR THE SALE AND INCREASE FROM THREE HUNDRED TO ONE THOUSAND DOLLARS THE MAXIMUM PENALTY FOR DEFAULTING ON A TAX SALE BID; TO AMEND SECTION 12-54-240, AS AMENDED, RELATING TO THE OFFENSE OF DISCLOSURE OF TAX INFORMATION, SO AS TO REVISE AN EXEMPTION TO THIS OFFENSE; AND TO AMEND SECTION 12-60-2510, AS AMENDED, RELATING TO PROPERTY TAX APPEALS, SO AS TO PROVIDE THAT IN NONREASSESSMENT YEARS, AN APPEAL MADE BEFORE THE FIRST PENALTY DATE FOR TAXES FOR THE YEAR APPLIES FOR THAT YEAR AND AN APPEAL FILED ON OR AFTER THAT DATE APPLIES FOR THE NEXT YEAR.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1.A. Article 13, Chapter 60, Title 12 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.
SECTION 2.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 pursuant to Subchapter K of the Internal Revenue Code 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 that 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 shall 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.
SECTION 3. 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 which that provide for taxes administered by the department, and unless otherwise required by the context, the term:
(1) 'person' includes an any individual, a trust, estate, partnership, receiver, association, company, limited liability company, corporation, or any other entity or group; and
(2) 'individual' means a human being."
SECTION 4. 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. The 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."
SECTION 5.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 item (A)(1)(ed) of this section, if a taxpayer owns an interest in one or more pass-through businesses that have a total gross income of less than one million dollars and taxable income of less than one hundred thousand dollars 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 '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.
SECTION 6.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 in lieu 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 in lieu 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 in lieu 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 of Revenue that must be filed with the officer's or member's tax return for the exemption to be claimed 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.
SECTION 7.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 under 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 which 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 12-6-3365 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.
SECTION 8.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 Sections Section 12-6-510 and, Section 12-6-530, Chapter 11 of Title 12, and or Chapter 7 of Title 38."
B. This section takes effect upon approval by the Governor.
SECTION 9.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.
SECTION 10. 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 imposed by Sections 12-6-510 and 12-6-530 and license fees imposed by Chapter 20 of Title 12. 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, the a taxpayer filing a paper return must attach to the return a copy of the section of the federal income tax return showing the credit claimed, along with any 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, the a taxpayer filing a paper return must attach to the return 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 all 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."
SECTION 11.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 his state income tax imposed by Chapter 6 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, 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 an individual 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 an individual 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 an individual 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 of the taxpayer after the end of 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 claim qualify for the credit, the taxpayer shall attach to the return a copy of retain a form provided by SCRA identifying the taxpayer's qualified contribution 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 of Revenue 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.
SECTION 12.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.
SECTION 13. 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, for good cause, 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. Any 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 any extension of time granted for filing the return.
(C) An extension may 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."
SECTION 14. 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. The A lending institution, real estate agent, and or closing attorney are 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."
SECTION 15. 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 names, 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 any other information the department requires. The partnership shall furnish to each nonresident shareholder 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."
SECTION 16.A. Section 12-8-1520 of the 1976 Code, as last amended by Act 145 of 2005, is further amended to read:
"Section 12-8-1520. (A)(1) Resident withholding agents who deposit and pay withholding to the Internal Revenue Service under the provisions of pursuant to the Internal Revenue Code as defined in Section 12-6-40(A) and applicable regulations shall remit all South Carolina taxes withheld pursuant to this chapter on or before the date their federal withholding taxes are due.
(2) If a resident withholding agent is required under pursuant to the Internal Revenue Code to deposit withheld funds at a financial institution, then the withholding agent shall deposit the funds required to be withheld under pursuant to this chapter at a financial institution selected by the State Treasurer, unless otherwise instructed by the department.
(3) If a resident withholding agent is not required to deposit and pay federal withholding to the Internal Revenue Service under the provisions of pursuant to the Internal Revenue Code and applicable regulations, the resident withholding agent shall remit South Carolina withholding to the department in accordance with subsection (B).
(B) A nonresident withholding agent and a resident withholding agent described in subsection (A)(3) must shall remit South Carolina taxes withheld under pursuant to this chapter as follows:
(1) on or before the fifteenth day of the month following the month in which the aggregate amount withheld is five hundred dollars or more; or
(2) on or before the last day of the month following the quarter in which funds were withheld if the aggregate amount withheld in a calendar quarter is less than five hundred dollars.
(C) Notwithstanding Section 12-8-1530 and Section 12-8-1520(A)(3) and (B), a withholding agent not required to withhold more than one thousand dollars in a calendar year with permission of the department, may file its withholding return and remit South Carolina withholding taxes annually on or before the last day of February following the calendar year of the withholding as described in Section 12-8-1550.
(CD) In order to To maintain conformity with the federal withholding system, the department may by rule adopt permit withholding in accordance with new federal withholding regulations.
(DE) Any A withholding agent making at least twenty-four payments in a year must do so as provided in Section 12-54-250."
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2007.
SECTION 17. 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 under 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 furnishes evidence that has refunded or unconditionally credited the amount erroneously withheld has been refunded or unconditionally credited 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.
(C) The withholding agent or taxpayer shall apply for a refund or credit under this section within three years from the deemed date of the overpayment. A refund or credit is not allowed for less than one dollar. For purposes of this section, the deemed date of overpayment is the original due date of the return in which the withholding is credited against tax imposed by Chapter 6 of this title."
SECTION 18. 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 34-24-20 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."
SECTION 19.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.
SECTION 20.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.
SECTION 21. 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 fraudulently 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 any tax shifts to the purchaser who improperly claimed the exemption or exclusion by use of the certificate."
SECTION 22. 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 shall may promulgate regulations necessary to carry out the provisions of this section."
SECTION 23.A. Section 12-54-44 of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding at the end:
"(E) A person who submits a false or fraudulent W-2 form in the filing of his income tax return is guilty of a felony and upon conviction, must be fined not more than five thousand dollars or imprisoned not more than five years, or both, together with the cost of prosecution."
B. The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION 24. Section 12-54-70(a) of the 1976 Code is amended to read:
"(a) The department may, for good cause, allow further time for the filing of returns or remitting of tax due, required under by the provisions of law administered by the department. The request for an extension may be granted only if the request is 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 as provided under 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."
SECTION 25.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.
SECTION 26.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 if 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.
SECTION 27. 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 any 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 any 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 any a county.
(13) disclosure of information pursuant to Section 12-54-1010(c) or 12-54-1020(c) Reserved;"
SECTION 28.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.
SECTION 29.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 any 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 and applies for property tax years beginning after 2000.
SECTION 30. 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)(2 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."
SECTION 31. Section 12-58-90 of the 1976 Code and Act 370 of 2002 are repealed.
SECTION 32.A. Section 6-1-320(A) of the 1976 Code, as last amended by Act 388 of 2006, 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."
SECTION 33. Article 5, Chapter 4, Title 12 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 fifteen days of the date the department determination is sent by first class mail or delivered to the county official, the official 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 official disagrees with the department determination, the department may request a contested case hearing before the Administrative Law Court within thirty days after date the county disagreement notice was mailed or hand delivered. A request for a contested case hearing before the Administrative Law Court must be made in accordance with its rules."
SECTION 34. 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."
SECTION 35. Section 12-6-40(A)(1)(a) of the 1976 Code, as last amended by Act 386 of 2006, 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, 20052006, and includes the effective date provisions contained in it."
SECTION 36.A. Section 12-6-50(2) of the 1976 Code is amended to read:
"(2) Sections 22 through 5354, 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.
SECTION 37. 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, is 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 a three-year period beginning immediately following the year during which the jobs were lost 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 beginning 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."
SECTION 38.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 first full month wages are paid for year the new full-time jobs are created, the taxpayer is allowed a jobs tax credit in an amount equal to 8.33 percent of the maximum credit amount calculated pursuant to Section 12-6-3360(C)(2) each month, for not more than sixty consecutive months, multiplied by the number of new full-time jobs for which wages are paid for the full month five consecutive years. A credit is not allowed for any month a year in which the new employment full-time job increase falls below the minimum level of two. To claim the credits allowed pursuant to Section 12-6-3360(C)(2)(a), the minimum gross wages requirement is met if the gross wages paid for the month, when annualized, meet the minimum requirement."
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
SECTION 39. Section 12-6-3585(A) of the 1976 Code, as added by Act 319 of 2006, is amended to read:
"(A) A taxpayer may claim as a credit against his 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, 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 an individual 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 an individual 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 an individual 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."
SECTION 40. A. Section 2-36-2120(44) of the 1976 Code is amended to read:
"(44) electricity used to irrigate crops or electricity used by greenhouses to irrigate plants;"
B. This section takes effect the first day of the second month after approval by the Governor.
SECTION 41. 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 and or distribution facility, or one that serves both purposes, with a capital investment of at least one hundred million 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.
SECTION 42.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:
"( )(a) antitoxins, antivirals, serums, vaccines, immunizing agents, antibiotics, and other pharmaceutical agents or medical supplies purchased and stockpiled by the State of South Carolina for use only during a federal or state-declared emergency, major disaster, public health emergency, state of emergency, or influenza pandemic.
(b) antitoxins, antivirals, serums, vaccines, immunizing agents, antibiotics, and other pharmaceutical agents or medical supplies purchased by the State of South Carolina for use during the time period covered by a federal or state-declared emergency, major disaster, public health emergency, state of emergency, or influenza pandemic."
B. This section takes effect on approval by the Governor. However, notwithstanding the provisions of Section 12-60-470 and the effective date of this exemption, any sales tax or use tax paid to the retailer by the State of South Carolina Department of Health and Environmental Control on those transactions before the enactment of the exemption must be refunded to the South Carolina Department of Health and Environmental Control by the South Carolina Department of Revenue upon written application.
SECTION 43. Section 12-54-200(C) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(C) If A person is required to maintain a separate account, he 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 may 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 twenty fifteen thousand dollars or more."
SECTION 44. 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."
SECTION 45. Section 12-54-250(A) and (B) 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 any 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) shall pay the tax liability to the State no later than the date the payment is required by law to be made, in funds which that are available immediately to the State on the date of payment. 'Payment in immediately available funds' may be made means payment by cash to the main office of the department before five o'clock p.m. or by any electronic means established by the department, with the approval of the State Treasurer, which ensures the availability settlement of those funds to in the State state's account on or before the banking day following the due date of payment the tax as provided by law.
(2) Evidence of the payment must be furnished to the department Initiation of the transfer of funds must occur on or before the due date of the tax as provided by law. 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) The department by rule may prescribe provide alternative periodic filing and payment dates later than the dates otherwise provided by law for any taxes collected by the department in those instances where it is considered to be in the best interest interests of the State. An alternative date may must not be later than the last day of the month in which the tax was otherwise due."
SECTION 46. Section 12-60-430 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(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.
(C) The information used by the department to estimate a tax liability pursuant to this section is admissible in any court of law in this State including the Administrative Law Court."
SECTION 47. Section 11-11-156(D) of the 1976 Code, as added by Act 388 of 2006, is amended to read:
"(D) Notwithstanding any other 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 each taxing entity for the incremental property tax that, in the absence of such exemption, would otherwise be payable to such taxing entity with respect to owner-occupied residential real property located in a redevelopment project area pursuant to the tax increment financing law for cities, counties, or redevelopment authorities. Such payment for incremental property taxes shall be calculated in accordance with the applicable tax increment financing law and shall be based on the assessed value of, and the school operating millage rate otherwise applicable to, the owner-occupied residential property in question 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."
SECTION 48. 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."
SECTION 49. 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.
SECTION 50. The Department of Revenue may amend the 2007 Index of Taxpaying Ability, as defined in Section 59-20-20(3), for purposes of calculating the 2007 Index of Taxpaying Ability.
SECTION 51. 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.
SECTION 52. 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 of this act by the Governor and applies for taxable years beginning after 2006.
SECTION 53.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 taxpayer whose principal business in this State is (i) manufacturing or any 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 number of sales made in South Carolina, and the denominator of which is the total number of sales for the taxpayer. However, if a 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 sales ratios must be determined in accordance with Section 12-6-2280. (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 of this act by the Governor and applies for taxable years beginning after 2006.
SECTION 54.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 other than the .United States Government. The place where goods are received by the purchaser after all transportation is completed is considered as 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) The word 'sales' includes, but is not limited to:
(1) rentals from tangible personal property located in this State which are not separately allocated; and
(2) sales of intangible personal property and 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. 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 of this act by the Governor and applies for taxable years beginning after 2006.
SECTION 55. 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 of this act by the Governor and applies for taxable years beginning after 2006.
SECTION 56. 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 under 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 12-6-2250 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 12-6-2250 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 under pursuant to Sections 12-6-2220 and 12-6-2230 is apportioned in accordance with Sections 12-6-2250 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 12-6-2250 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 are repealed.
E. This section takes effect for tax years after 2010.
SECTION 57. A. Section 12-6-590(B) of the 1976 Code is amended to read:
"(B) If Internal Revenue Code Section 1374 (Tax Imposed on Certain Built-In Gains and Capital Gains) or 1375 (Tax Imposed on Certain Passive Investment Income) imposes a federal income tax, a South Carolina tax is similarly imposed using the rates set forth in Section 12-6-530. If the exception in Internal Revenue Code Section 1374(c) is effective for federal tax purposes, then this exception is applicable for South Carolina income tax purposes. 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.
SECTION 58. Section 4-12-30(C), (D), 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. If the county agrees to grant the extension, the county must do so 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. 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 (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, unless extended for up to an additional ten years by resolution of the county. 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, unless extended for up to an additional ten years as provided in this item, to a maximum total of thirty forty years for the fee for a single project which has been granted an extension. 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 a maximum of forty 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, resulting in a total investment of at least three hundred million dollars when added to previous investments by a sponsor, and creating at least one hundred twenty-five new full-time jobs at a project;
(ii) in the case of a single sponsor investing at least four six hundred million dollars and which is creating at least two hundred new full-time jobs at a project in this State;
(iii) in the case of a business including a corporation, its subsidiaries, and its limited liability company members, that builds a project consisting of gas-fired combined-cycle power facility and invests at least four hundred million dollars and creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project; or
(iv) 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 arrangements 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.
(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) 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) to offset improvement costs by providing a credit against the fee due from a sponsor. A direct payment of cash may not be made to the sponsor:
(i) for a project not located in an industrial development park, to the extent that the cumulative credit taken does not exceed the lesser of:
A. the improvement costs of the project; or
B. the county's share of fees distributed from the project pursuant to Section 4-12-30(B);
(ii) for a project located within an industrial development park, to the extent that the cumulative credit taken does not exceed the lesser or:
A. the improvement costs of the project; or
B. the total amount of fees the county is entitled to retain pursuant to the industrial development park agreement.
(b) For purposes of item (3), improvement costs include the cost of designing, acquiring, constructing, improving, or expanding:
(i) the infrastructure serving the project; and
(ii) improved and unimproved real property, buildings, and structural components of buildings used in the operation of a project in order to enhance economic development.
(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."
SECTION 59. Section 4-29-67(D)(4) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"(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, resulting in a total investment of at least three hundred million dollars when added to previous investments by a sponsor, 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 six hundred million dollars and which is creating at least two hundred new full-time jobs at the project in this State;
(iii) in the case of a business including a corporation, its subsidiaries, and its limited liability company members, that builds a project consisting of gas-fired combined-cycle power facility and invests at least four hundred million dollars and creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project; or
(iv) 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 inducement 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."
SECTION 60. Section 12-6-3620(A) of the 1976 Code, as added by Act 386 of 2006, is amended to read:
"(A) For taxable years beginning after 2006, there is allowed a tax credit against the tax imposed pursuant to Section 12-6-530 for twenty-five percent of the costs incurred by a taxpayer for use of methane gas taken from a landfill to provide power energy for a manufacturing facility."
SECTION 61. Section 12-43-220(a) of the 1976 Code is amended to read:
"(a) All real and personal property owned by or leased to manufacturers and utilities and used by the manufacturer or utility in the conduct of the business must be taxed on an assessment equal to ten and one-half percent of the fair market value of the property.
(1) Real property owned by or leased to a manufacturer and used primarily for research and development is not considered used by a manufacturer in the conduct of the business of the manufacturer for purposes of classification of property under item (a) of this section. The term "research and development" means basic and applied research in the sciences and engineering and the design and development of prototypes and processes.
(2) Real property owned by or leased to a manufacturer and used primarily as an office building is not considered used by a manufacturer in the conduct of the business of the manufacturer for purposes of classification of property under item (a) of this section if the office building is not located on the premises of or contiguous to the plant site of the manufacturer.
(3) Real property owned by or leased to a manufacturer and used primarily for warehousing and wholesale distribution of clothing and wearing apparel is not considered used by a manufacturer in the conduct of the business of the manufacturer for purposes of classification of property under item (a) of this section if the property is not located on the premises of or contiguous to the manufacturing site of the manufacturer."
SECTION 62. A. Section 12-44-10 of the 1976 Code is amended to read:
"Section 12-44-10. This act may be cited as the 'Fee in Lieu of Tax Simplification Act of 1997."
B. Section 12-44-30(7), (14), and (20) of the 1976 Code, as last amended by Act 161 of 2005, is further amended to read:
"(7)(a) 'Enhanced investment' means a project which results in a total investment:
(a)(i) by a single sponsor of at least two hundred million dollars, resulting in a total investment of at least four hundred million dollars when added to the previous investments, and creating at least two hundred investing at least one hundred fifty million dollars and creating at least one hundred twenty-five new full-time jobs at the project;
(b)(ii) by a single sponsor investing at least four hundred million dollars and which is creating at least two hundred new full-time jobs at the project;
(c) by a single sponsor investing at least six hundred million dollars in this State;
(d)(iii) at least four hundred million dollars in the building of a project consisting of gas-fired combined-cycle power facility by a sponsor which creates at least twenty-five full-time jobs as defined in Section 12-6-3360(M) at that project and invests an additional five hundred million dollars in this State. The investment must be made by a sponsor which consists of a corporation, its subsidiaries, and its limited liability companies. The new full-time jobs requirement of this subsection does not apply to a taxpayer which 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; or
(e)(iv) 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 fee agreement, paid more than fifty percent of all property taxes actually collected in the county.
(14) 'Minimum investment' means a project that results in a total level of investment by a sponsor of not less than five in the project of at least two and one-half million dollars that must be invested 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 which is the last day of a property tax year which is the nineteenth year following the first property tax year in which an applicable piece of economic development property is placed in service, unless otherwise extended for up to an additional ten years by resolution of the county. With respect to a fee agreement involving an enhanced investment, the termination date is the last day of a property tax year which 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."
C. Section 12-44-40(E) 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 the inducement resolution agreement is adopted executed by the sponsor and the county council, the real property or tangible personal property of a sponsor for which expenditures have been incurred by the sponsor with respect to the project do not qualify as economic development property."
SECTION 63. Section 53-1-150(B) of the 1976 Code, as last amended by Act 134 of 1995, is further amended to read:
"(B) The provisions of Chapter 1 of Title 53 do not apply to any county area, as defined in Section 6-4-5(1), which collects more than nine hundred thousand dollars in one fiscal year in revenues from the accommodations tax provided for in Section 12-36-2630(3) and imposed in Section 12-36-920(A). After a county area has collected more than nine hundred thousand dollars in one fiscal year in revenues from the accommodations tax provided for in Section 12-36-2630(3) and imposed in Section 12-36-920(A), the exclusion from the provisions of Chapter 1 of Title 53 will continue from year to year irrespective of whether revenue falls below nine hundred thousand dollars in subsequent years."
SECTION 64. Chapter 62, Title 12 of the 1976 Code is amended to read:
Section 12-62-10. This chapter may be cited as the 'South Carolina Motion Picture Incentive Act'.
Section 12-62-20. For purposes of As used in this chapter:
(1) 'Company' means a corporation, partnership, limited liability company, or other business entity.
(2) 'Department' means the South Carolina Department of Commerce, including the South Carolina Film Commission and the Coordinating Council for Economic Development.
(3) 'Live sporting event' means a scheduled sporting competition, game, or race that is not originated by a production company, but originated solely by an amateur, collegiate, or professional organization, institution, or association for live or tape-delayed television or satellite broadcast. The term does not include commercial advertising, an episodic television series, a television pilot, music video, motion picture, or documentary production where any sporting events are presented through archived historical footage or similar footage depicting earlier live sporting events that originated more than thirty days before the time of the usage.
(4) 'Motion picture' means a feature-length film, video, television series, or commercial made in whole or in part in South Carolina, and intended for national theatrical or television viewing or as a television pilot produced by a motion picture production company. The term 'motion picture' does not include the production of television coverage of news and athletic live sporting events or a production produced by a motion picture production company if records, as required by 18 U.S.C. 2257, are to be maintained by that motion picture production company with respect to any performer portrayed in that single media or multimedia program. For purposes of this definition, in the case of an episodic television series, an entire season of episodes is considered one production. The rebate is computed based on all of the motion picture production company's qualifying expenses incurred with respect to the production.
(4)(5) 'Motion picture production company' means a company engaged in the business of producing motion pictures intended for a national theatrical release or for television viewing. 'Motion picture production company' does not mean or include a company owned, affiliated, or controlled, in whole or in part, by a company or person that is in default on taxes owed or a loan made by the State, or political subdivision or a loan guaranteed by the State.
(5)(6) 'Payroll' means salary, or wages, or other compensation subject to South Carolina income tax withholdings.
(6)(7) 'Secretary' means the Secretary of the Department of Commerce or his designee.
Section 12-62-30. A motion picture production company that intends to expend in the aggregate two hundred fifty thousand dollars or more in connection with the filming or production of one or more motion pictures in the State of South Carolina within a consecutive twelve-month period, upon making application for, meeting the requirements of, and receiving written certification of that designation from the department as provided in this chapter, shall be relieved from the payment of state and local sales and use taxes administered and collected by the Department of Revenue on funds expended in South Carolina in connection with the filming or production of a motion picture or pictures. The production of television coverage of news and athletic live sporting events is specifically excluded from the provisions of this chapter.
Section 12-62-40. (A) A motion picture production company that intends to film all or parts of a motion picture in South Carolina and desires to be relieved from the payment of the state and local sales and use taxes, administered and collected by the Department of Revenue, as provided in this chapter shall provide an estimate of total expenditures expected to be made in South Carolina in connection with the filming or production of the motion picture. The estimate of expenditures must be filed with the department before the commencement of filming in South Carolina.
(B) At the time the motion picture production company provides the estimate of expenditures to the department, it also shall designate a member or representative of the motion picture production company to work with the department and the Department of Revenue on reporting of expenditures and other information necessary to take advantage of the tax relief afforded by this chapter.
(C)(1) An application for the tax relief provided by this chapter must be accepted only from those motion picture production companies that report anticipated expenditures in the State in the aggregate equal to or exceeding two hundred fifty thousand dollars in connection with the filming or production of one or more motion pictures in the State within a consecutive twelve-month period.
(2) The application must be approved by the secretary.
(3) Once the application is approved by the secretary, the The Department of Revenue shall issue a sales and use tax exemption certificate to the motion picture production company as evidence of the exemption. The exemption is effective on the date the application is approved by the secretary.
(D) A motion picture production company that is approved and receives a sales and use tax exemption certificate but fails to expend two hundred fifty thousand dollars in South Carolina within a consecutive twelve-month period is liable for the sales and use taxes that would have been paid had the approval not been granted; except, that the motion picture production company must be given a sixty-day period in which to pay the sales and use taxes without incurring penalties. The sales and use taxes are considered due as of the date the tangible personal property was purchased in or brought into South Carolina for use, storage, or consumption.
(E) Upon completion of the motion picture, the motion picture production company must return the sales and use tax exemption certificate to the Department of Revenue and submit a report to the department of the actual expenditures made in South Carolina in connection with the filming or production of the motion picture in South Carolina.
Section 12-62-50. (A)(1) The South Carolina Film Commission department may rebate to a motion picture production company a portion of the South Carolina payroll of the employment of persons subject to South Carolina income tax withholdings in connection with production of a motion picture or pictures. The rebate may not exceed fifteen twenty percent of the total aggregate South Carolina payroll for persons subject to South Carolina income tax withholdings employed in connection with the production when total production costs in South Carolina equal or exceed one million dollars during the taxable year. The rebates issued to all motion picture production companies in total may not annually exceed ten fifteen million dollars and shall come from the state's general fund. For purposes of this section, 'total aggregate payroll' does not include the portion of the salary of an employee whose salary which is equal to or greater than one million dollars for each motion picture. Unexpended funds from this source may be carried over to the next and succeeding fiscal years.
(2)(a) For purposes of this section, an employee is an individual directly involved in the filming physical production or post-production of a motion picture performed in South Carolina and who is an employee of a:
(i) motion picture production company that is directly involved in the filming physical production or post-production of a motion picture in South Carolina; or
(ii) personal service corporation retained by a motion picture production company to provide persons used directly in the filming physical production or post-production of a motion picture in South Carolina; or
(iii) payroll services or loan out company that is retained by a motion picture production company to provide employees who work directly in the filming physical production or post-production of a motion picture in South Carolina.
(b) For his wages to qualify for the rebate, the employee must be certified by the department as a qualifying employee and the employee must have had South Carolina income tax withholding withheld and remitted to the Department of Revenue by a company described in item (2)(a).
(3) The rebate applies with respect to an employee described in subitem (a)(ii) or (iii) only if, before commencement of filming in South Carolina the rebate is applied for, the personal services corporation, payroll services company, or loan out company is approved and certified by the department, and makes an irrevocable assignment of its rebate to the motion picture production company that produced the motion picture. The assignment must be made on a form provided by the Department of Revenue department, which must include a waiver of confidentiality pursuant to Section 12-54-240. Upon assignment, the rebate may be paid only to the motion picture production company. A personal services corporation, payroll services company, or loan out company which is a subcontractor to another entity which has made or does make the irrevocable assignment is not required to make the assignment or execute the form. However, a subcontractor is not entitled to a rebate unless, before the start of physical production in South Carolina, the subcontractor has notified both the Film Commission and the motion picture production company that it is a subcontractor and does not intend to assign its rebate.
(B)(1) The rebate provided in subsection (A) is available to the motion picture production company at the end of all filming physical production or post-production activity in South Carolina in connection with the motion picture, whichever is later. The motion picture production company producing the motion picture must apply to the department for a certificate of completion once filming physical production or post-production activity in South Carolina is complete. The motion picture production company must shall provide the information the department considers necessary to determine if the one million dollar expenditure requirement has been met.
(2) A motion picture production company may claim the rebate by filing a request for rebate with the department once the certificate of completion is obtained. The request for rebate must be filed by the last day of February of the year following the year in which the certificate of completion is obtained. To claim the rebate, the motion picture production company and all companies described in subsection (A)(2)(a)(ii) or (iii) must be current with respect to all taxes or loans due and owing the State or political subdivisions at the time of filing the request for rebate. If the motion picture production company or a company described in subsection (A)(2)(a)(ii) or (iii) is not current with respect to all taxes due and owing the State or political subdivisions, the motion picture production company is may be permanently barred from claiming the rebate.
(3) The motion picture production company must attach to its request for rebate a copy of the certificate of completion and a copy of all assignments of the rebate, if applicable.
(C) A motion picture production company claiming a rebate pursuant to this section, and all companies described in subsection (A)(2)(a)(ii) or (iii), must make payroll books and records available for inspection to the commission and the department at the times requested by the commission or the department. Each motion picture production company claiming the rebate, at the time of filing, must provide a report to both the commission and the department that includes the project's name, the name of each employee that worked on the motion picture, the social security number for each employee, the dates employed beginning and ending date of employment, the dates number of days the employee worked on the motion picture, a job description for each employee, the total gross wages for each employee, the South Carolina taxable wages subject to withholding for each employee, the amount of rebate attributable to that employee, and other information considered necessary by the commission or the department. The report also must contain the total amount of withholding attributable to all employees that worked on the motion picture in South Carolina.
(D) For purposes of this section, and as an exception to Section 12-54-240, a motion picture production company and a company described in subsection (A)(2)(a)(ii) or (iii) agree that the commission and the department and the Department of Revenue may share or provide information concerning the request for rebate and the certificate of completion among the respective taxpayers and the respective agencies.
Section 12-62-55. At the time the motion picture production company is certified by the department, it may make, with the approval of the coordinating council department, an irrevocable assignment of future payments attributable to the rebates made pursuant to Section 12-62-40 or 12-62-50 or 12-62-60 to a designated trustee. The assignment shall specify whether one or both rebates are being assigned. For purposes of this chapter, 'designated trustee' means the single financier or financial institution designated by the council motion picture production company to receive all assignments of payments made pursuant to this chapter and to the terms of an agreement entered into by the qualifying motion picture production company. If a qualifying motion picture production company elects to assign payments to the designated trustee, the election must be made on a form provided by the department, including a waiver of confidentiality pursuant to Section 12-54-240, and the payments may be paid only to the designated trustee. The qualifying motion picture production company must file an application for the assignment with the secretary department no later than thirty days after filming begins in South Carolina.
Section 12-62-60. (A)(1) An amount equal to twenty-six percent of the general fund portion of admissions tax collected by the State of South Carolina for this State in the previous fiscal year plus ten million dollars must be appropriated annually to the department in the general appropriations act and these appropriations must be funded made available annually by September first to the department for the exclusive use of the South Carolina Film Commission. The department may rebate to a motion picture production company up to fifteen thirty percent of the expenditures made by the motion picture production company in the this State if the motion picture production company has a minimum in-state expenditure in the aggregate of at least of one million dollars. The distribution of rebates may not exceed the amount annually funded to the department for the South Carolina Film Commission from the admissions tax collected by the State. Unexpended funds from this appropriation may carry forward to the next and succeeding fiscal years and must be used for the same purposes.
(2) This subsection does not apply to payroll paid for motion picture production employees subject to Section 12-62-50 or money paid to the companies described in Section 12-62-50(A)(2)(a)(ii) or (iii). Unexpended funds from this source may be carried over to the next and succeeding fiscal years.
(B) Up to seven percent of the amount provided appropriated to the department in pursuant to subsection (A) may be used exclusively for marketing and special events.
(C) The allocations to motion picture production companies contemplated by this chapter must be made by the Coordinating Council for Economic Development department. The Coordinating Council for Economic Development department may adopt prescribe rules, and promulgate regulations policies, and procedures for the application for and award of the rebate.
(D) An additional one percent of the general fund portion of admissions tax collected by the State of South Carolina this State for the previous fiscal year must be funded appropriated to the department for the exclusive use of the South Carolina Film Commission for the promotion of collaborative production and educational efforts between institutions of higher learning in South Carolina and motion picture related entities. The department, in conjunction with the South Carolina Film Commission, shall adopt may prescribe rules, and promulgate regulations policies, and procedures necessary to administer this section. Unexpended funds from this source may be carried over appropriation may carry forward to the next and succeeding fiscal years and must be used for the same purposes.
(E) The department shall report annually to the coordinating council on the use of all funds pursuant to this section. The report is a public record pursuant to the Freedom of Information Act, Chapter 4 of Title 30, and must be posted annually on the commission's website by January first.
Section 12-62-70. (A)(1) Upon a determination by the Director of the Office of General Services Division of the South Carolina Budget and Control Board of the underutilization of state property by a state agency, the department may negotiate below-market rates for temporary use, no more than twelve months, of space for the underutilized property. The negotiations and temporary use are exempt from the provisions of the State Consolidated Procurement Code. The motion picture production company shall reimburse costs at normal and customary rates incurred by the state agency to the state agency, including costs required to repair any damage caused by the motion picture production company to real or personal property of the State.
(2) The state agency or local political subdivision that owns the property determined to be underutilized may appeal within three business days that determination of underutilization to the State Budget and Control Board.
(B) The State or its political subdivisions may not charge a location or facility fee for properties they own if the properties are used for seven or fewer days as a location or facility in the production of a motion picture, but only properties used directly in filming and not as support locations are covered by this provision. A property may be used for a total of only twenty-one thirty days without location or facility fees in a calendar year. The motion picture production company may be on site no longer than seven days within a thirty-day period without a location or facility fee charge. State-owned or political subdivision-owned properties may recoup all costs they expend on behalf and at the direction of the motion picture production company. State-owned or political subdivision- owned properties also may recoup a location or facility fee, after the first seven days, not to exceed two thousand five hundred dollars a day. State-owned or political subdivision-owned properties also may recoup costs required to repair damage caused by the motion picture production company to real or personal property of the state agency or political subdivision. The motion picture production company shall reimburse all costs, at the property' s normal and customary rates, to the state agency or political subdivisions incurring the costs within twenty-one calendar days of completion of production activities on site. The motion picture production company may use the publicly-owned property only on the days agreed to and approved by the state agency or political subdivision, and each production company may designate only four locations a film a day.
Section 12-62-80. The department may form a South Carolina Film Foundation to solicit donations for the recruitment and development of motion pictures and the motion picture industry in furtherance of the purposes of this chapter.
Section 12-62-90. The end credit roll of a motion picture that utilizes a South Carolina tax credit or rebate must recognize the State of South Carolina with the following statement: 'Filmed in South Carolina pursuant to the South Carolina Motion Picture Incentive Act', except that the State of South Carolina reserves the right to refuse the use of South Carolina's name in the credits of a motion picture filmed or produced in the State.
Section 12-62-100. To the extent not already provided, the department may adopt prescribe rules and promulgate regulations to carry out the intent and purposes of this chapter."
SECTION 65. 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 thereof; , 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;
(23)(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, ifat 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;
(34) Savings and Loan Associations to the extent that the same are insured by an agency of the federal government;
(45) 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.
(56) Repurchase agreements when collateralized by securities as set forth in this section.
(67) 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 (56) 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.
(78) 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 rating categories issued by no fewer than two nationally recognized credit rating 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."
SECTION 66. Section 12-6-510(A) of the 1976 Code is amended to read:
"(A) For taxable years beginning after 1994 2006, a tax is imposed on the South Carolina taxable income of individuals, estates, and trusts and any other entity except those taxed or exempted from taxation under Sections 12-6-530 through 12-6-550 computed at the following rates with the income brackets indexed in accordance with Section 12-6-520:
Not over $2,220 2.5 percent of taxable income
over $2,220 but $56 plus 3 percent of
not over $4,440 the excess over $2,220;
over $4,440 but $123 plus 4 percent of
not over $6,660 the excess over $4,440;
over $6,660 but $212 plus 5 percent of
not over $8,880 the excess of $6,660;
over $8,880 but $323 plus 6 percent of
not over $11,100 the excess over $8,880;
over $11,100 $456 plus 7 percent of
the excess over $11,100.
OVER BUT NOT
OVER -0-
$ 0 $2,630 2.5% Times the amount
2,630 5,260 3% Times the amount less $13
5,260 7,890 4% Times the amount less $66
7,890 10,520 5% Times the amount less $144
10,520 13,150 6% Times the amount less $250
13,150+ or more 6.83% Times the amount less $381."
SECTION 67. Unless otherwise provided herein, this act takes effect upon approval by the Governor.
This web page was last updated on Monday, October 10, 2011 at 1:34 P.M.