H*3666 Session 108 (1989-1990)
H*3666(Rat #0268, Act #0175 of 1989) General Bill, By J.L. Harris
A Bill to amend Section 12-7-1220, Code of Laws of South Carolina, 1976,
relating to jobs tax credit, so as to further provide for this credit and for
the entities and area that qualify for this credit, provide that the credit
also applies to insurance premium taxes, and provide for definitions to be
used for purposes of this credit.
03/09/89 House Introduced and read first time HJ-30
03/09/89 House Referred to Committee on Ways and Means HJ-30
04/25/89 House Committee report: Favorable with amendment Ways
and Means HJ-199
05/09/89 House Committee amendment tabled HJ-12
05/09/89 House Read second time HJ-18
05/10/89 House Amended HJ-22
05/10/89 House Read third time and sent to Senate HJ-23
05/11/89 Senate Introduced and read first time SJ-23
05/11/89 Senate Referred to Committee on Finance SJ-23
05/24/89 Senate Recalled from Committee on Finance SJ-30
05/25/89 Senate Read second time SJ-36
05/31/89 Senate Read third time and enrolled SJ-6
06/02/89 Ratified R 268
06/08/89 Signed By Governor
06/08/89 Effective date 06/08/89
06/08/89 Act No. 175
06/19/89 Copies available
(A175, R268, H3666)
AN ACT TO AMEND SECTION 12-7-1220, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO JOBS TAX CREDIT, SO AS TO FURTHER PROVIDE FOR THIS CREDIT AND FOR THE
ENTITIES AND AREAS THAT QUALIFY FOR THIS CREDIT, PROVIDE THAT THE CREDIT ALSO
APPLIES TO INSURANCE PREMIUM TAXES, AND PROVIDE FOR DEFINITIONS TO BE USED FOR
PURPOSES OF THIS CREDIT.
Be it enacted by the General Assembly of the State of South Carolina:
Jobs tax credit revisions
SECTION 1. Section 12-7-1220 of the 1976 Code (formerly Section 12-7-616,
redesignated by Act 170 of 1987) is 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, 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, 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, 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), and (D) 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 employment fluctuations during the additional five
years of credit.
(F) The sale, merger, acquisition, or bankruptcy of any corporation may not
create new eligibility in any succeeding corporation, but any unused job tax
credit may be transferred and continued by any 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 credit claimed under this section but not used in any 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 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 job created by an employer in South Carolina at the
time a new facility or an expansion is initially 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' 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' does not include any
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' 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' 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 sales' and 'tangible personal property', for purposes
of this section, have those meanings as contained in Chapter 35 of Title
12."
Time effective
SECTION 2. This act takes effect upon approval by the Governor. |