H 3626 Session 109 (1991-1992)
H 3626 General Bill, By J.G. McAbee, R.L. Altman, C.D. Chamblee, Elliott,
J.G. Felder, S.E. Gonzales, D.N. Holt, M.F. Jaskwhich, Keegan, Phillips,
J. Rama, Sharpe, R. Smith and J.J. Snow
A Bill to amend Section 12-7-1220, as amended, Code of Laws of South Carolina,
1976, relating to the Jobs Tax Credit, so as to include tourism facilities and
define the term.
02/28/91 House Introduced and read first time HJ-6
02/28/91 House Referred to Committee on Ways and Means HJ-7
03/19/91 House Committee report: Favorable Ways and Means HJ-22
03/21/91 House Amended HJ-14
03/21/91 House Read second time HJ-14
03/26/91 House Read third time and sent to Senate HJ-12
03/27/91 Senate Introduced and read first time SJ-6
03/27/91 Senate Referred to Committee on Finance SJ-7
Indicates Matter Stricken
Indicates New Matter
AMENDED
March 21, 1991
H. 3626
Introduced by REPS. McAbee, Sharpe, Smith, Keegan, Snow, Holt,
Jaskwhich, Felder, Chamblee, D. Elliott, Rama, Gonzales, Altman and
Phillips
S. Printed 3/21/91--H.
Read the first time February 28, 1991.
A BILL
TO AMEND SECTION 12-7-1220, AS AMENDED, CODE OF LAWS
OF SOUTH CAROLINA, 1976, RELATING TO THE JOBS TAX
CREDIT, SO AS TO INCLUDE TOURISM FACILITIES AND
DEFINE THE TERM.
Amend Title To Conform
Whereas, tourism is a principal industry in South Carolina, and
incentives which stimulate the tourism industry contribute to a healthy
economy in the State and to the public good generally; and
Whereas, South Carolina has the potential for attracting a convention
business, a theme park, or other tourism attraction of a size and quality
to have a major impact upon the state's economy; and
Whereas, South Carolina has not enacted legislation tailored specifically
for a major tourism facility, but other states offer incentives targeted at
theme park attractions and other major tourist attractions; and
Whereas, South Carolina should capitalize upon its potential and meet
the competition by providing financial incentives for investors who
consider investing in a theme park or other major tourist attraction
within the State; and
Whereas, the purpose of this legislation is to clarify whether the tax
credit provided in Chapter 7, Title 12 of the 1976 Code for new jobs
created in South Carolina extend to jobs in the tourism sector. Now,
therefore,
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-7-1220 of the 1976 Code, as last amended
by Act 175 of 1989, is further amended to read:
"Section 12-7-1220. (A) Annually by December thirty-first,
using the most current data available from the South Carolina
Employment Security Commission and the United States Department of
Commerce, the Tax Commission shall rank and designate the state's
counties as provided in this section. The sixteen counties in this State
having a combination of the highest unemployment rate and lowest per
capita income for the most recent thirty-six month period with equal
weight being given to each category are designated less developed
counties. The fifteen counties in the State with a combination of the next
highest unemployment rate and next lowest per capita income for the
most recent thirty-six month period with equal weight being given to
each category are designated moderately developed counties. The
fifteen counties in the State with a combination of the lowest
unemployment rate and the highest per capita income for the most recent
thirty-six month period with equal weight being given to each category
are designated developed counties. Corporations which create new
full-time jobs qualify for the appropriate tax credit as provided
in subsections (B), (C), and (D). The designation by the commission is
effective for corporate tax years which begin after the date of
designation. For corporations which plan a significant expansion in their
labor forces at a South Carolina location, the appropriate commission
shall prescribe certification procedures to insure that the corporations
can claim credits in future years without regard to whether or not a
particular county is removed from the list of less developed or
moderately developed counties.
(B) Corporations operating manufacturing, tourism,
processing, warehousing, distribution, research and development, and
corporate office facilities in counties designated by the commission as
less developed are allowed a job tax credit for taxes imposed by Section
12-7-230 and for insurance premium taxes imposed pursuant to Chapter
7 of Title 38 equal to one thousand dollars annually for each new
full-time employee job for five years beginning with years two through
six after the creation of the job. The number of new full-time jobs must
be determined by comparing the monthly average number of full-time
employees subject to South Carolina income tax withholding in the
applicable county for the taxable year with the corresponding period of
the prior taxable year. Only those corporations that increase
employment by ten or more in a less developed county are eligible for
the credit. Credit is not allowed during any of the five years if
the net employment increase falls below ten. The appropriate
commission shall adjust the credit allowed each year for net new
employment fluctuations above the minimum level of ten.
(C) Corporations operating manufacturing, tourism,
processing, warehousing, distribution, research and development, and
corporate office facilities in counties that have been designated by the
commission as moderately developed are allowed a job tax credit for
taxes imposed by Section 12-7-230 and for insurance premium taxes
imposed pursuant to Chapter 7 of Title 38 equal to six hundred dollars
annually for each new full-time employee job for five years beginning
with years two through six after the creation of the job. The number of
new full-time jobs must be determined by comparing the monthly
average number of full-time employees in the applicable county subject
to South Carolina income tax withholding for the taxable year with the
corresponding period of the prior taxable year. Only those corporations
that increase employment by eighteen or more in a county that has been
designated moderately developed are eligible for the credit. The credit
is not allowed during any of the five years if the net employment
increase falls below eighteen. The appropriate commission shall adjust
the credit allowed each year for net new employment fluctuations above
the minimum level of eighteen.
(D) Corporations operating manufacturing, tourism,
processing, warehousing, distribution, research and development, and
corporate office facilities in counties designated by the commission as
developed are allowed a job tax credit for taxes imposed by Section
12-7-230 and for insurance premium taxes imposed pursuant to Chapter
7 of Title 38 equal to three hundred dollars annually for each new
full-time employee job for five years beginning with years two through
six after the creation of the job. The number of new full-time jobs must
be determined by comparing the monthly average number of full-time
employees in the applicable county subject to South Carolina income tax
withholding for the taxable year with the corresponding period of the
prior taxable year. Only those corporations that increase employment
by fifty or more in a county that has been designated developed are
eligible for the credit. The credit is not allowed during any of the
five years if the net employment increase falls below fifty. The
appropriate commission shall adjust the credit allowed each year for net
new employment fluctuations above the minimum level of fifty.
(E) Tax credits for five years for the taxes imposed by Section
12-7-230 and for insurance premium taxes imposed pursuant to Chapter
7 of Title 38 must be awarded for additional new full-time jobs created
by corporations qualified under subsections (B), (C), (D), and (I), of
this section. Additional new full-time jobs must be determined by
subtracting highest total employment of the corporation during years two
through six, or whatever portion of year two through six completed,
from the total increased employment. The appropriate commission shall
adjust the credit allowed in the event of for employment
fluctuations during the additional five years of credit.
(F) The sale, merger, acquisition, or bankruptcy of any
a corporation may not create new eligibility in any a
succeeding corporation, but any unused job tax credit
credits may be transferred and continued by any
a transferee of the corporation. The appropriate commission
shall determine whether or not qualifying net increases or decreases
have occurred and may require reports, promulgate regulations, and hold
hearings as needed for substantiation and qualification.
(G) Any A credit claimed under this section but
not used in any a taxable year may be carried forward
for ten years from the close of the tax year in which the credit is earned
by the corporation but. However, the credit
established by this section taken in any one tax year must be
limited to an amount not greater than fifty percent of the taxpayer's state
corporate income tax or premium tax liability which is attributable to
income or premiums derived from operations in the State for that year.
(H) For the purpose of this section, the term:
(1) `New job' means any a job created by an
employer in South Carolina at the time a new facility or an expansion
is initially is staffed, but does not include a job
created when an employee is shifted from an existing South Carolina
location to a new or expanded facility.
(2) `Full-time' means a job requiring a minimum of thirty-five
hours of an employee's time a week for the entire normal year of
company operations or a job requiring a minimum of thirty-five hours
of an employee's time for a week for a year in which the employee was
initially hired for or transferred to the South Carolina facility.
(3) `Corporation' means a business entity which is subject to
South Carolina taxes as contained in Section 12-7-230 and Chapter 7 of
Title 38.
(4) `Manufacturing facility' means an establishment where
tangible personal property is produced or assembled.
(5) `Processing facility' means an establishment engaged in
services such as manufacturing-related, computer-related,
communications-related, energy-related, or transportation-related
services, but the term `processing facility'. It
does not include an establishment where retail merchandise or retail
services are sold directly to retail customers.
(6) `Warehousing facility' means an establishment where
tangible personal property is stored, but the term `warehousing
facility'. It does not include any
an establishment which operates as a location where retail sales
of tangible personal property are made to retail customers.
(7) `Distribution facility' means an establishment where
shipments of tangible personal property are processed for delivery to
customers, but the term `distribution facility'.
It does not include an establishment which operates as a
location where retail sales of tangible personal property are made
directly to retail customers. For the purpose of this definition, a
`distribution facility' includes establishments which process customer
sales orders by mail, telephone, or electronic means, if the establishment
also processes shipments of tangible personal property to customers and
if at least seventy-five percent of the dollar amount of goods sold
through the facility are sold to customers outside of South
Carolina.
(8) `Research and development facility' means an
establishment engaged in laboratory, scientific, or experimental testing
and development related to new products, new uses for existing
products, or improving existing products, but a `research and
development facility'. It does not include an
establishment engaged in efficiency surveys, management studies,
consumer surveys, economic surveys, advertising, promotion, or
research in connection with literary, historical, or similar projects.
(9) `Corporate office facility' means the location where
corporate managerial, professional, technical, and administrative
personnel are domiciled and employed, and where corporate financial,
personnel, legal, technical, support services, and other business
functions are handled. Support services include, but are not limited to,
claims processing, data entry, word processing, sales order processing,
and telemarketing. A `corporate office facility' does not include
establishments engaged in the direct sale of retail merchandise or retail
services to retail customers. For the purpose of this definition, `sales
order processing' facilities include establishments which process
customer sales orders by mail, telephone, or electronic means, if the
establishments also process shipments of tangible personal property to
customers and if at least seventy-five percent of the dollar amount of
goods sold through the facility are sold to customers outside of
South Carolina.
(10) The terms `retail `Retail sales' and
`tangible personal property', for purposes of this section, have
those meanings as contained in Chapter 35
36 of Title 12.
(11) `Tourism facility' means an establishment used for a
theme park, an amusement park, an historical, an educational, or a trade
museum, a botanical garden, a cultural center, a theater, a motion picture
production studio, a convention center, an arena, an auditorium, or a
spectator or participatory sports and similar establishments where
entertainment, education, or recreation is provided to the general public.
Tourism facility also includes new hotel and motel construction, except
that to qualify for the credits allowed by this section and regardless of
the county in which the facility is located, the number of new jobs that
must be created by the new hotel or motel is twenty or more. It does not
include that portion of an establishment where retail merchandise or
retail services are sold directly to retail customers.
(I) Permanent business enterprises engaged in manufacturing,
tourism, processing, warehousing, wholesaling, research and
development, and service-related industries in a business or industrial
park jointly established and developed by a group of counties pursuant
to Section 13 of Article VIII of the Constitution of this State are allowed
an additional job tax credit for taxes imposed by Section 12-7-230,
which is in addition to those job tax credits already authorized
by this section, equal to five hundred dollars annually for each new
full-time employee job for five years beginning with years two through
six after the creation of the job. The number of new full-time jobs must
be determined by comparing the monthly average number of full-time
employees subject to South Carolina income tax withholding for the
taxable year with the corresponding period of the prior taxable year. The
limitations and conditions contained in subsections (E), (F), and (G)
of this section also apply to the additional job tax credit
authorized by this subsection (I). Notwithstanding which of the
participating counties where the permanent business is located, for
purposes of the regular job tax credits authorized by subsections (B),
(C), and (D) of this section, the participating county which
would qualify for the greatest dollar amount of job tax credit is the
county the permanent business enterprise is deemed to be located in
regardless of whether or not it is actually is located in
another participating county."
SECTION 2. This act takes effect upon approval by the Governor.
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