H 4089 Session 110 (1993-1994)
H 4089 General Bill, By C.L. Sturkie
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Article 10
in Chapter 36 of Title 12, relating to the sales and use tax, by enacting the
School Property Tax Relief Sales Tax Act, so as to increase the sales and use
tax from five to six percent, distribute the revenue to school districts on an
average daily membership basis, and provide a tax credit against the school
property tax; to amend Section 12-36-2120, as amended, relating to sales tax
exemptions, so as to delete all exemptions except the exemption for
prescription drugs and constitutionally mandated exemptions and to add an
exemption for food; and to repeal Section 12-36-2110, relating to the sales
tax cap on motor vehicles, motorcycles, boats, aircraft, and certain other
tangible personal property.
04/14/93 House Introduced and read first time HJ-62
04/14/93 House Referred to Committee on Ways and Means HJ-62
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING ARTICLE 10 IN CHAPTER 36 OF TITLE 12,
RELATING TO THE SALES AND USE TAX, BY ENACTING THE
SCHOOL PROPERTY TAX RELIEF SALES TAX ACT, SO AS TO
INCREASE THE SALES AND USE TAX FROM FIVE TO SIX
PERCENT, DISTRIBUTE THE REVENUE TO SCHOOL DISTRICTS
ON AN AVERAGE DAILY MEMBERSHIP BASIS, AND PROVIDE
A TAX CREDIT AGAINST THE SCHOOL PROPERTY TAX; TO
AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO
SALES TAX EXEMPTIONS, SO AS TO DELETE ALL
EXEMPTIONS EXCEPT THE EXEMPTION FOR PRESCRIPTION
DRUGS AND CONSTITUTIONALLY MANDATED EXEMPTIONS
AND TO ADD AN EXEMPTION FOR FOOD; AND TO REPEAL
SECTION 12-36-2110, RELATING TO THE SALES TAX CAP ON
MOTOR VEHICLES, MOTORCYCLES, BOATS, AIRCRAFT, AND
CERTAIN OTHER TANGIBLE PERSONAL PROPERTY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 36, Title 12 of the 1976 Code is amended by
adding:
"Article 10
School Property Tax Relief
Sales Tax Act
Section 12-36-1010. This article may be cited as the School
Property Tax Relief Sales Tax Act.
Section 12-36-1020. An additional tax equal to one percent is added
to the taxes imposed pursuant to Articles 9, 13, and 17 of this chapter.
For all purposes of this title, this additional tax is considered a tax levied
pursuant to the South Carolina Sales and Use Tax Act. The commission
shall prescribe tables establishing the total amount that may be added to
the sales price to reflect all tax levied pursuant to this chapter.
Section 12-36-1030. (A) After deducting the amount of refunds
made, the revenue from the tax must be credited to a separate fund in the
State Treasury entitled the School Property Tax Relief Fund. Earnings
on the fund must be credited to the fund. Revenues in the fund must be
distributed quarterly to the school districts of the State by means of a
formula in which the share of a district is determined by multiplying the
total amount available for distribution by a fraction in which the
numerator is the district's one hundred thirty-five day average daily
membership and the denominator is total statewide one hundred
thirty-five day average daily membership.
(B) The State Treasurer may correct misallocations from the School
Property Tax Relief Fund by adjusting subsequent distributions.
(C) The Tax Commission and the State Department of Education
shall furnish data to the State Treasurer and to school districts for the
purpose of calculating distributions and estimating revenues.
Section 12-36-1040. (A) A tax credit is granted against the school
tax liability of every ad valorem taxpayer in an amount determined by
multiplying the appraised value of the taxpayer's taxable property by a
fraction in which the numerator is the total estimated revenue received
by the school district from the School Property Tax Relief Fund during
the applicable fiscal year of the school district and the denominator is
the total of the appraised value of taxable property in the school district
as of January first of the applicable tax year.
(B) For motor vehicles subject to the payment of property taxes
pursuant to Article 21, Chapter 37 of this title, the credit provided under
this section applies against the tax liability for motor vehicle tax years
beginning after December of the year in which the credit is
calculated."
SECTION 2. Section 12-36-2120 of the 1976 Code is amended to
read:
"Section 12-36-2120. Exempted from the taxes imposed by this
chapter are the gross proceeds of sales, or sales price of:
(1) tangible personal property or receipts of any business which the
State is prohibited from taxing by the Constitution or laws of the United
States of America or by the Constitution or laws of this State;
(2) tangible personal property sold to the federal government;
(3) textbooks, magazines, and periodicals used as a part of a course
of study in primary and secondary schools and institutions of higher
learning, and all books, magazines, and periodicals sold to publicly
supported state, county, or regional libraries which are open to the
public without charge;
(4) livestock. `Livestock' is defined as domesticated animals
customarily raised on South Carolina farms for use primarily as beasts
of burden, or food, and certain mammals when raised for their pelts or
fur. Animals such as dogs, cats, reptiles, fowls (except baby chicks and
poults), and animals of a wild nature, are not considered livestock;
(5) feed used for the production and maintenance of poultry and
livestock;
(6) insecticides, chemicals, fertilizers, soil conditioners, seeds, or
seedlings, or nursery stock, used solely in the production for sale of
farm, dairy, grove, vineyard, or garden products or in the cultivation of
poultry or livestock feed;
(7) containers and labels used in:
(a) preparing agricultural, dairy, grove, or garden products for
sale; or
(b) preparing turpentine gum, gum spirits of turpentine, and gum
resin for sale.
For purposes of this exemption, containers mean boxes, crates, bags,
bagging, ties, barrels, and other containers;
(8) newsprint paper, newspapers, and religious publications,
including the Holy Bible and the South Carolina Department of
Agricultures The Market Bulletin;
(9) coal, or coke or other fuel sold to manufacturers, electric power
companies, and transportation companies for:
(a) use or consumption in the production of by-products;
(b) the generation of heat or power used in manufacturing
tangible personal property for sale. For purposes of this item,
`manufacturer' or `manufacturing' includes the activities of a processor;
(c) the generation of electric power or energy for use in
manufacturing tangible personal property for sale; or
(d) the generation of motive power for transportation. For the
purposes of this exemption, `manufacturer' or `manufacturing' includes
the activities of mining and quarrying;
(10) (a) meals or foodstuffs used in furnishing meals to school
children, if the sales or use are within school buildings and are not for
profit;
(b) meals or foodstuffs provided to elderly or disabled persons at
home by nonprofit organizations that receive only charitable
contributions in addition to sale proceeds from the meals;
(11) (a) toll charges for the transmission of voice or messages
between telephone exchanges;
(b) charges for telegraph messages; and
(c) carrier access charges and customer access line charges
established by the Federal Communications Commission or the South
Carolina Public Service Commission;
(12) water sold by public utilities, if rates and charges are of the kind
determined by the Public Service Commission, or water sold by
nonprofit corporations organized pursuant to Sections 33-35-10 to
33-35-170;
(13) fuel, lubricants, and supplies for use or consumption aboard
ships in intercoastal trade or foreign commerce. This exemption does
not exempt or exclude from the tax the sale of materials and supplies
used in fulfilling a contract for the painting, repair, or reconditioning of
ships and other watercraft;
(14) wrapping paper, wrapping twine, paper bags, and containers,
used incident to the sale and delivery of tangible personal property;
(15) gasoline or other motor vehicle fuels taxed at the same rate as
gasoline, fuels used in farm machinery, farm tractors, and commercial
fishing vessels, and clean alternative transportation fuels as defined in
regulation by the South Carolina Tax Commission as defined by the
State Energy Office. Gasoline used in aircraft is not exempted by this
item;
(16) farm machinery and their replacement parts and attachments,
used in planting, cultivating or harvesting farm crops, including bulk
coolers (farm dairy tanks) used in the production and preservation of
milk on dairy farms, and machines used in the production of poultry and
poultry products on poultry farms, when such products are sold in the
original state of production or preparation for sale. This exemption does
not include automobiles or trucks;
(17) machines used in manufacturing, processing, compounding,
mining, or quarrying tangible personal property for sale. `Machines'
include the parts of machines, attachments, and replacements used, or
manufactured for use, on or in the operation of the machines and which
are necessary to the operation of the machines and are customarily so
used. This exemption does not include automobiles or trucks;
(18) fuel used exclusively to cure agricultural products;
(19) electricity used by manufacturers, miners, or quarriers to
manufacture, mine, or quarry tangible personal property for sale. For
purposes of this item, `manufacturer' or `manufacture' includes the
activities of processors;
(20) railroad cars, locomotives, and their parts, monorail cars, and the
engines or motors that propel them, and their parts;
(21) vessels and barges of more than fifty tons burden;
(22) materials necessary to assemble missiles to be used by the
Armed Forces of the United States;
(23) farm, grove, vineyard, and garden products, if sold in the original
state of production or preparation for sale, when sold by the producer or
by members of the producers immediate family;
(24) supplies and machinery used by laundries, cleaning, dyeing, or
pressing establishments in the direct performance of their primary
function, but not sales of supplies and machinery used by coin-operated
laundromats;
(25) motor vehicles (excluding trucks) or motorcycles, which are
required to be licensed to be used on the highways, sold to a resident of
another state, but who is located in South Carolina by reason of orders
of the United States Armed Forces. This exemption is allowed only if,
within ten days of the sale, the vendor is furnished a statement, from a
commissioned officer of the Armed Forces of a higher rank than the
purchaser, certifying that the buyer is a member of the Armed Forces on
active duty, and a resident of another state;
(26) all supplies, technical equipment, machinery, and electricity sold
to radio and television stations, and cable television systems, for use in
producing, broadcasting, or distributing programs. For the purpose of
this exemption, radio stations, television stations, and cable television
systems are deemed to be manufacturers;
(27) all plants and animals sold to any publicly supported zoological
park or garden or to any of its nonprofit support corporations;
(28)(2) medicine and prosthetic devices sold by
prescription; hypodermic needles, insulin, alcohol swabs, and blood
sugar testing strips sold to diabetics under the authorization and
direction of a physician; and dental prosthetic devices;
(29) Reserved;
(30) office supplies, or other commodities, and services resold by the
Division of General Services of the State Budget and Control Board to
departments and agencies of the state government, if the tax was paid on
the divisions original purchase;
(31) vacation time sharing lease plans as provided by Chapter 32 of
Title 27;
(32) natural and liquefied petroleum gas and electricity used
exclusively in the production of poultry, livestock, swine, and milk;
(33) electricity, natural gas, fuel oil, kerosene, LP gas, coal, or any
other combustible heating material or substance used for residential
purposes. Individual sales of kerosene of twenty gallons or less by
retailers are considered used for residential heating purposes;
(34) thirty-five percent of the gross proceeds of the sale of modular
homes as defined in Section 31-17-20;
(35) motion picture film sold or rented to or by theaters;
(36) tangible personal property where the seller, by contract of sale,
is obligated to deliver to the buyer, or to an agent or donee of the buyer,
at a point outside this State or to deliver it to a carrier or to the mails for
transportation to the buyer, or to an agent or donee of the buyer, at a
point outside this State;
(37) petroleum asphalt products, commonly used in paving,
purchased in this State, which are transported and consumed out of this
State;
(38) hearing aids, as defined by Section 40-25-20(5);
(39) concession sales at a festival by an organization devoted
exclusively to public or charitable purposes, if:
(a) all the net proceeds are used for those purposes;
(b) the festival is listed as a special event in the calendar of events
provided by the South Carolina Department of Parks, Recreation and
Tourism; and
(c) in advance of the festival, its organizers provide the
commission, on a form it prescribes, information necessary to insure
compliance with this item. For purposes of this item, a `festival' does
not include a recognized state or county fair;
(40) containers and chassis, including all parts, components, and
attachments, sold to international shipping lines which have a
contractual relationship with the South Carolina State Ports Authority
and which are used in the import or export of goods to and from this
State. The exemption allowed by this item is effective for sales after
June 30, 1982;
(41) items sold by organizations exempt under Section 12-37-220
A(3) and (4) and B(5), (6), (7), (8), (12), (16), (19), (22), and (24), if the
net proceeds are used exclusively for exempt purposes and no benefit
inures to any individual. An organization whose sales are exempted by
this item is also exempt from the retail license tax provided in Article 5
of this chapter. The exemption allowed by this item is effective for sales
after June 30, 1989;
(42) depreciable assets, used in the operation of a business, pursuant
to the sale of the business. This exemption only applies when the entire
business is sold by the owner of it, pursuant to a written contract and the
purchaser continues operation of the business. The exemption allowed
by this item is effective for sales after June 30, 1987.
(43) all supplies, technical equipment, machinery, and electricity sold
to motion picture companies for use in filming or producing motion
pictures. For the purposes of this item, `motion picture' means any
audiovisual work with a series of related images either on film, tape, or
other embodiment, where the images shown in succession impart an
impression of motion together with accompanying sound, if any, which
is produced, adapted, or altered for exploitation as entertainment,
advertising, promotional, industrial, or educational media; and a `motion
picture company' means a company generally engaged in the business
of filming or producing motion pictures;
(44) electricity used to irrigate crops;
(45) gross proceeds from the sale of building materials, supplies,
fixtures, and equipment for the construction, repair, or improvement of
or that become a part of a self-contained enclosure or structure
specifically designed, constructed, and used for the commercial housing
of poultry or livestock.
(46) War memorials or monuments honoring units or contingents of
the Armed Forces of the United States or of the National Guard,
including United States military vessels, which memorials or
monuments are affixed to public property;
(3) food which may be purchased with United States Department
of Agriculture food stamps."
SECTION 3. Section 12-36-2110 of the 1976 Code is repealed.
SECTION 4. This act takes effect July 1, 1993.
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