S*944 Session 106 (1985-1986)
S*0944(Rat #0458, Act #0414 of 1986) General Bill, By J.M. Waddell, Leatherman,
I.E. Lourie and N.A. Theodore
Similar(H 3409)
A Bill to amend Sections 12-7-20, as amended, 12-7-430, 12-7-435, 12-7-450,
12-7-455, 12-7-618, 12-7-2410, and 12-9-310, as amended, Code of Laws of South
Carolina, 1976, and Act 101 of 1985, all relating to the State Income Tax, so
as to make technical corrections and correct references for purposes of the
South Carolina Income Tax Federal Conforming Amendments of 1985; to amend Act
176 of 1977, as amended, relating to approval of regulations by the General
Assembly pursuant to the Administrative Procedures Act, so as to exempt from
review regulations of the South Carolina Tax Commission adopting Internal
Revenue Service regulations for purposes of the South Carolina Income Tax
Federal Conforming Amendments; and to redesignate Section 12-35-1125 as
Section 12-35-1127 of the 1976 Code so as to correct the duplication of a
designation.-amended title
02/04/86 Senate Introduced and read first time SJ-420
02/04/86 Senate Referred to Committee on Finance SJ-420
04/22/86 Senate Committee report: Favorable with amendment
Finance SJ-2218
04/24/86 Senate Amended SJ-2298
04/24/86 Senate Read second time SJ-2301
04/24/86 Senate Unanimous consent for third reading on next
legislative day SJ-2301
04/25/86 Senate Read third time and sent to House SJ-2342
04/29/86 House Introduced, read first time, placed on calendar
without reference HJ-2637
04/30/86 House Read second time HJ-2714
05/01/86 House Read third time and enrolled HJ-2770
05/07/86 Ratified R 458
05/12/86 Signed By Governor
05/12/86 Effective date 05/12/86
05/12/86 Act No. 414
05/20/86 Copies available
(A414, R458, S944)
AN ACT TO AMEND SECTIONS 12-7-20, AS AMENDED, 12-7-430, 12-7-435, 12-7-450,
12-7-455, 12-7-618, 12-7-2410, AND 12-9-310, AS AMENDED, CODE OF LAWS OF SOUTH
CAROLINA, 1976, AND ACT 101 OF 1985, ALL RELATING TO THE STATE INCOME TAX, SO AS
TO MAKE TECHNICAL CORRECTIONS AND CORRECT REFERENCES FOR PURPOSES OF THE SOUTH
CAROLINA INCOME TAX FEDERAL CONFORMING AMENDMENTS OF 1985; TO AMEND ACT 176 OF
1977, AS AMENDED, RELATING TO APPROVAL OF REGULATIONS BY THE GENERAL ASSEMBLY
PURSUANT TO THE ADMINISTRATIVE PROCEDURES ACT, SO AS TO EXEMPT FROM REVIEW
REGULATIONS OF THE SOUTH CAROLINA TAX COMMISSION ADOPTING INTERNAL REVENUE
SERVICE REGULATIONS FOR PURPOSES OF THE SOUTH CAROLINA INCOME TAX FEDERAL
CONFORMING AMENDMENTS; AND TO REDESIGNATE SECTION 12-35-1125 AS SECTION
12-35-1127 OF THE 1976 CODE SO AS TO CORRECT THE DUPLICATION OF A DESIGNATION.
Be it enacted by the General Assembly of the State of South Carolina:
Definition
SECTION 1. Item (11) of Section 12-7-20 of the 1976 Code, as last amended by
Section 76, Part II, of Act 201 of 1985, is further amended to read:
"(11) 'Internal Revenue Code' means the Internal Revenue Code of 1954 as
amended through December 31, 1985."
Exclusion
SECTION 2. Subitem (1) of item B of Section 12-7-430 of the 1976 Code, as added
by Section 7 of Act 101 of 1985, is amended to read:
"(1) The exclusion from gross income authorized by Internal Revenue Code
Section 103 is modified to exempt only interest upon obligations of this State,
any of its political
subdivisions and to exempt interest upon obligations of the United States."
Definition
SECTION 3. Subitem (6) of item (d) of Section 12-7-430 of the 1976 Code, as
added by Section 7 of Act 101 of 1985, is amended to read:
"(6) For purposes of computing the deduction allowed by Internal Revenue
Code Section 691(c) the term 'estate tax' means the taxes imposed under Chapter
15 of Title 12 including any South Carolina generation-skipping transfer
tax."
Exclusion from gross income
SECTION 4. Section 12-7-430 of the 1976 Code, as added by Section 7 of Act 101
of 1985, is amended by adding two new items at the end to read:
"(g) South Carolina gross income does not include gross income excluded
from federal income tax by reason of any treaty of the United States.
(h) South Carolina taxable income does not include income of an organization
exempt from income tax pursuant to Internal Revenue Code Section 501."
Deduction
SECTION 5. Item (d) of Section 12-7-435 of the 1976 Code, as added by Section
7 of Act 101 of 1985, is amended to read:
"(d) All amounts received from the South Carolina Retirement Systems as
provided in Title 9."
Deductions must be reduced
SECTION 6. Subitem (4) of item (b) of Section 12-7-450 of the 1976 Code, as
added by Section 7 of Act 101 of 1985, is amended to read:
"(4) The itemized deductions of a nonresident estate or nonresident trust
must be reduced by an amount which is the same proportion as South Carolina gross
income is of federal gross income."
Net operating loss carried forward
SECTION 7. Subsection (x) of Section 12-7-455 of the 1976 Code, as added by
Section 7 of Act 101 of 1985, is amended to read:
"(x) Any net operating loss carryforward under Section 12-7-705 as in
effect on December 31, 1984, is allowed for South Carolina income tax purposes
before any loss carryforwards pursuant to Internal Revenue Code Section 172 as
modified by subparagraph 2 of item (d) of Section 12-7-430, but in no event is
the same loss deductible more than once. Any net operating loss that has not
expired prior to January 1, 1985, shall expire under the rules provided in
Internal Revenue Code Section 172."
Charitable deduction carryover
SECTION 8. Section 12-7-455 of the 1976 Code, as added by Section 7 of Act 101
of 1985, is amended by adding two new subsections at the end to read:
"(aa) If a taxpayer has a charitable deduction carryover, as permitted
by Internal Revenue Code Section 170, from a tax year prior to January 1, 1985,
the taxpayer is not allowed to deduct the charitable deduction carryover for
South Carolina income tax purposes.
(bb) For any taxable year beginning after December 31, 1984, to the extent
gross income, adjusted gross income, or taxable income of any taxpayer is
affected by any provision of federal law enacted prior to January 1, 1985, which
provision is not contained in the Internal Revenue Code, the provision is
applicable in determining the South Carolina gross, adjusted gross, and taxable
income of the taxpayer in the appropriate taxable year."
Credit
SECTION 9. Section 12-7-618 of the 1976 Code, as added by Section 9 of Act 101
of 1985, is amended to read:
"Section 12-7-618. For South Carolina income tax purposes, an individual
may claim a credit for expenses related to a dependent as provided
in Internal Revenue Code Section 21, except that the term 'applicable percentage'
means seven percent and is not reduced if a taxpayer's adjusted gross income
exceeds ten thousand dollars for a taxable year. Only expenses that are directly
attributable to items of South Carolina gross income qualify for the credit
allowed by this section."
Income tax liability
SECTION 10. Section 12-7-2410 of the 1976 Code is amended to read:
"Section 12-7-2410. Whenever an individual who is a resident of South
Carolina is liable for income tax in another state on account of (1) income
earned from personal services rendered in the other state, or (2) income received
through a nonresident fiduciary, the Tax Commission shall credit the amount of
income tax payable for the income year by the taxpayer under this title with the
amount of tax paid by the taxpayer to another state on South Carolina taxable
income. In no case shall the credit herein allowed exceed an amount equivalent
to the proportion of South Carolina income tax attributable to the South Carolina
taxable income as determined in accordance with Section 12-7-410, as modified by
Sections 12-7-430 and 12-7-435 and taxed by another state."
Distribution of taxable income
SECTION 11. Item (4) of Section 12-9-310 of the 1976 Code, as added by Section
8 of Act 101 of 1985, is amended to read:
"(4) Making any distribution of South Carolina taxable income to a
nonresident beneficiary of any estate or trust shall withhold from the
distribution seven percent of the beneficiary's South Carolina taxable income
attributable to the distribution. The amounts withheld must be paid over each
year to the Commission with the annual tax return of the estate or trust. The
nonresident beneficiary
may claim the amount withheld as a credit against any South Carolina income tax
liability and shall receive a refund of any excess. A trust that is exempt from
taxation pursuant to Internal Revenue Code Section 501 is not subject to this
item."
References
SECTION 12. Item (b) of Section 12 of Act 101 of 1985 is amended to read:
"(b) Sections 22 through 52, 515, 853, 901 through 908, and 960 relating
to tax credits."
Section redesignated
SECTION 13. Section 12-35-1125 of the 1976 Code, as added by Section 5 of Act
308 of 1986, is redesignated Section 12-35-1127.
Regulations
SECTION 14. Section 12 of Act 176 of 1977, as last amended by Act 414 of 1982,
is further amended to read:
"Section 12. All regulations except those specifically exempted under
this article must be submitted to the General Assembly for review in accordance
with the provisions of the article. To initiate the process of review, the
agency shall file with the President of the Senate and the Speaker of the House
of Representatives a copy of any regulations promulgated along with a request for
review. Upon receipt of the request, the President and Speaker reviewing the
request shall submit it for consideration to the standing committees of the
Senate and House which are most concerned with the function of the promulgating
agency. The committees shall have one hundred twenty days from the date
regulations are submitted to the General Assembly to consider regulations so
referred and determine their action thereon. If no action is taken by either the
Senate or House of Representatives' committee to introduce a resolution to
approve or disapprove the regulations within one hundred twenty days after
submission to the General Assembly, the regulations are effective upon
publication in the State Register. Upon introduction of the first joint
resolution disapproving a regulation by a standing committee to which the
regulation was referred for review, additional days must be added to the days
remaining on the one-hundred-twenty-day period for automatic approval, if less
than sixty, to equal sixty days. The introduction of a resolution by the
committee of either House does not prevent the introduction of a resolution by
the committee of the other House to either approve or disapprove the regulations
concerned.
The one-hundred-twenty-day period of review begins on the date the regulation
is filed with the President and Speaker. Sine die adjournment of the General
Assembly tolls the running of the period of review and the remainder of the
period shall begin to run upon the next convening of the General Assembly
excluding special sessions called by the Governor.
Any member may introduce a joint resolution approving or disapproving a
regulation or group of regulations thirty days following the date the regulations
concerned are submitted to a standing committee for review and no committee
resolution approving or disapproving such regulations has been introduced and the
regulations concerned have not been withdrawn by the promulgating agency pursuant
to Section 12A but the introduction does not toll the one-hundred-twenty-day
period of automatic approval.
General Assembly review is not required for regulations promulgated to maintain
compliance with federal law including, but not limited to, grant programs.
Review also is not required for regulations promulgated by the State Board of
Financial Institutions in order to authorize state-chartered banks,
state-chartered savings and loan associations, and state-chartered credit unions
to engage in activities that are authorized pursuant to Section 34-1-110 of the
1976 Code. Review is not required for regulations promulgated by the South
Carolina Tax Commission to adopt regulations, revenue rulings, revenue
procedures, and technical advice memoranda of the Internal Revenue Service so as
to maintain conformity with the Internal Revenue Code of 1954. All regulations
submitted to the General Assembly for approval shall have attached thereto a
brief synopsis or analysis of the regulations submitted explaining the content
therein and any changes in existing regulations resulting therefrom. The
synopsis or analysis shall include citations of federal law, if any, mandating
changes in the regulations. The one-hundred-twenty-day period of review provided
for in this section does not begin to run until the synopsis or analysis is
attached to regulations submitted."
Provisions effective
SECTION 15. The provisions of Sections 1 through 8 and 10 of this act are
effective for taxable years beginning after December 31, 1984. The provisions
of Section 9 are effective for taxable years beginning after December 31, 1985.
Time effective
SECTION 16. This act shall take effect upon approval by the Governor. |