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COMMITTEE REPORT
April 18, 2007
H. 3765
Introduced by Reps. Edge, Merrill, Witherspoon, Hardwick, Ceips, Duncan, Herbkersman, Spires, Taylor, Viers and Chalk
S. Printed 4/18/07--H.
Read the first time March 21, 2007.
To whom was referred a Bill (H. 3765) to amend Section 12-37-220, as amended, the Code of Laws of South Carolina, 1976, relating to general exemption from property tax, so as to exempt, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/SECTION 1. Section 12-37-220(B)(38) of the 1976 Code is amended to read:
/ "(38)(a) Watercraft and motors which have an assessment of not more than fifty dollars.
(b) By ordinance, a governing body of a county may exempt from the property tax, forty-two and 75/100 percent of the fair market value of a watercraft and its motor. This exemption for a watercraft motor applies whether the motor is located in, attached to, or detached from the watercraft."
SECTION 3. This act takes effect upon approval by the Governor and is applicable for tax years beginning after 2007. /
Renumber sections to conform.
Amend title to conform.
DANIEL T. COOPER for Committee.
REVENUE IMPACT 1/
This bill is not expected to impact state revenues. Local property tax revenues will be decreased by $24.2 million in Fiscal Year 2007-08 and shifted to other classes of property to the extent allowed by the millage caps.
Explanation
Section 1 of this bill adds language to Section 12-37-220(B)(38) that exempts 62 percent of the fair market value of a watercraft and its motor, if it is not attached to the watercraft. This effectively changes the assessment ratio on boats and motors from 10.5% to 4.0%. We estimate total property tax collections in South Carolina on boats and motors to be approximately $38.5 million for FY 2007-08. Exempting 62 percent of the fair market value of boats and motors will reduce current local property tax collections on boats and motors by $23.9 million in FY 2007-08.
Section 2 amends Section 12-37-714 to change situs language on how boats can be taxed for property tax purposes in this state. This section would allow counties to tax boats that were in the state for a significant part of the year. Under current law a boat used in interstate commerce must be physically present in this State for thirty days in the aggregate in a property tax year to become subject to ad valorem taxation. This changes the number of days to 60. Also under current law a boat, including its motor if the motor is separately taxed, which is not currently taxed in this State and is not used exclusively in interstate commerce, is subject to property tax in this State if it is present within this State for sixty consecutive days or for ninety days in the aggregate in a property tax year. This changes the number of days to one hundred twenty and one hundred eighty respectively. Overall, this section is estimated to decrease local property tax revenues on boats by $300,000 in FY2007-08. In total, local property tax revenues will be decreased by $24.2 million in Fiscal Year 2007-08 and shifted to other classes of property to the extent allowed by the millage caps.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact by the BEA, or Section 2-7-76 for a local revenue impact or Section 6-1-85(B) for an estimate of the shift in local property tax incidence by the Office of Economic Research.
TO AMEND SECTION 12-37-220, AS AMENDED, THE CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO GENERAL EXEMPTION FROM PROPERTY TAX, SO AS TO EXEMPT FROM THE PROPERTY TAX SIXTY-TWO PERCENT OF THE FAIR MARKET VALUE OF A WATERCRAFT AND ITS MOTOR, IF IT IS NOT ATTACHED TO THE WATERCRAFT; AND TO AMEND SECTION 12-37-714, RELATING TO PROPERTY TAX ON BOATS WITH SITUS IN SOUTH CAROLINA, SO AS TO INCREASE THE NUMBER OF DAYS A BOAT THAT IS USED IN INTERSTATE COMMERCE MUST BE PRESENT IN THE STATE TO BE SUBJECT TO THE PROPERTY TAX FROM THIRTY DAYS TO NINETY DAYS, AND TO INCREASE THE NUMBER OF DAYS A BOAT THAT IS NOT USED IN INTERSTATE COMMERCE MUST BE PRESENT IN THE STATE FROM SIXTY CONSECUTIVE DAYS TO ONE HUNDRED TWENTY CONSECUTIVE DAYS
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-37-220(B)(38) is amended to read:
"(38)(a) Watercraft and motors which have an assessment of not more than fifty dollars.
(b) Sixty-two percent of the fair market value of a watercraft and its motor, if it is not attached to the watercraft."
SECTION 2. Section 12-37-714 of the 1976 Code, as added by Act 386 of 2006, is amended to read:
"Section 12-37-714. In addition to any other provisions of law subjecting boats and boat motors to property tax in this State:
(1) A boat, including its motor if separately taxed, used in interstate commerce having a tax situs in this State and at least one other state is subject to property tax in this State. The value of such a boat must be determined based on the fair market value of the boat multiplied by a fraction representing the number of days present in this State. The fraction is determined by dividing the number of days the boat was present in this State by three hundred and sixty-five days. A boat used in interstate commerce must be physically present in this State for thirty ninety days in the aggregate in a property tax year to become subject to ad valorem taxation.
(2) A boat, including its motor if the motor is separately taxed, which is not currently taxed in this State and is not used exclusively in interstate commerce, is subject to property tax in this State if it is present within this State for sixty one hundred twenty consecutive days or for ninety one hundred eighty days in the aggregate in a property tax year. Upon written request by a tax official, the owner must provide documentation or logs relating to the whereabouts of the boat in question. Failure to produce requested documents creates a rebuttable presumption that the boat in question is taxable within this State."
SECTION 3. This act takes effect upon approval by the Governor and is applicable for tax years beginning after 2007.
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