H 3908 General Bill, By Kirsh

Similar(S 672)
 A Bill to amend Chapter 4, Title 12, Code of Laws of South Carolina, 1976,
 relating to the South Carolina Tax Commission, by adding Article 9 so as to
 authorize the Commission to seek a declaratory judgment to determine the
 constitutionality or legality of a tax law or law providing for the
 administration of taxes, to provide for the case to be heard in the Supreme
 Court on an expedited basis, to provide for the application of tax law subject
 to the action, and to provide taxpayer remedies.

   04/13/93  House  Introduced and read first time HJ-8
   04/13/93  House  Referred to Committee on Ways and Means HJ-9
   05/05/93  House  Committee report: Favorable Ways and Means HJ-20
   05/19/93  House  Debate adjourned until Thursday, May 20, 1993 HJ-698
   05/20/93  House  Debate adjourned until Tuesday, May 25, 1993 HJ-24
   05/25/93  House  Committed to Committee on Judiciary HJ-20

May 5, 1993

H. 3908

S. Printed 5/5/93--H.

Read the first time April 13, 1993.

To whom was referred a Bill (H. 3908), to amend Chapter 4, Title 12, Code of Laws of South Carolina, 1976, relating to the South Carolina Tax Commission, by adding Article 9 so as to authorize the commission to seek a declaratory judgment, etc., respectfully

That they have duly and carefully considered the same, and recommend that the same do pass:

WILLIAM D. BOAN, for Committee.

The Bills amends Chapter 4, Title 12, relating to the South Carolina Tax Commission, by adding Article 9 so as to authorize the Commission to seek a declaratory judgment to determine the constitutionality or legality of a tax law or law providing for the administration of taxes, to provide for the case to be heard in the Supreme Court on an expedited basis, to provide for the application of tax law subject to the action, and to provide taxpayer remedies.

This Bill would have no effect on state or local revenue.

The proposed legislation would suspend statutes, until the Supreme Court decides, that are possibly deemed unconstitutional by the Commission or by a taxpayer. In recent years, the commission employees throughout the country have been sued for administration of unconstitutional provisions. In an effort to protect agency employees from legal action, the commission proposes a statutory change to allow the commission to bring a declaratory action in the Supreme Court for determination of constitutionality or legality of statutes passed by the General Assembly.

Approved By:

James M. Waddell Jr.

S.C. Tax Commission

A BILL

TO AMEND CHAPTER 4, TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE SOUTH CAROLINA TAX COMMISSION, BY ADDING ARTICLE 9 SO AS TO AUTHORIZE THE COMMISSION TO SEEK A DECLARATORY JUDGMENT TO DETERMINE THE CONSTITUTIONALITY OR LEGALITY OF A TAX LAW OR LAW PROVIDING FOR THE ADMINISTRATION OF TAXES, TO PROVIDE FOR THE CASE TO BE HEARD IN THE SUPREME COURT ON AN EXPEDITED BASIS, TO PROVIDE FOR THE APPLICATION OF TAX LAW SUBJECT TO THE ACTION, AND TO PROVIDE TAXPAYER REMEDIES.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. The General Assembly finds that:

(1) On occasion, the South Carolina Tax Commission is confronted with the administration and enforcement of a state statute when there are material concerns about the statute's constitutionality or legality. These concerns may arise from a statute of another state having similar effect and force being declared unconstitutional by the United States Supreme Court or by the highest court of another state, or by the enactment of a federal statute preempting state law.

(2) It is in the public's interest, and it is the intent of the General Assembly that there be no continuation of the administration and enforcement of an unconstitutional or illegal law.

(3) The purpose of this act is to provide a procedure to suspend temporarily the administration and enforcement of the statute until the courts can review the statute and determine whether or not it is invalid.

SECTION 2. Chapter 4, Title 12 of the 1976 Code is amended by adding:

"Article 9

Section 12-4-910. If the commission determines that there is material doubt as to the constitutionality or legality of a tax statute or a statute which affects its ability to administer and enforce the tax laws, the commission, after advising the State Budget and Control Board, may file a declaratory judgment action with the Supreme Court petitioning the court to review and determine the statute's constitutionality, legality, or both. The Supreme Court, upon receipt of the petition, shall schedule the matter for consideration at the earliest practicable date. Except as otherwise provided in this article, this action must be conducted in accordance with Chapter 53 of Title 15.

Section 12-4-920. A taxpayer whose duty to pay the tax and a person whose duty to collect the tax may be affected by the declaratory judgment action may intervene in the action.

Section 12-4-930. If an exemption, exclusion, deduction, or credit is determined to be unconstitutional or illegal, then, unless the imposition statute of the tax specifically provides otherwise, it is the legislative intent of the General Assembly that the tax be upheld and the exemption, exclusion, deduction, or credit be declared void.

Section 12-4-940. All statutes of limitations for assessment, collection, and claims and suits for refund are suspended from the date the action is filed until ninety days after the decision in the case becomes final.

Section 12-4-950. (A) If the statute imposes a tax, taxpayers shall continue to file returns showing the disputed tax during the pendency of the action, but need not pay the tax. If the tax is upheld, failure to pay penalties and interest are waived if the tax is paid within ninety days after the decision becomes final.

(B) If the statute allows an exemption, exclusion, deduction, or credit, taxpayers may continue to claim the exemption, exclusion, deduction, or credit, and if the exemption, exclusion, deduction, or credit is declared unconstitutional or illegal, failure to pay penalties and interest are waived if the tax is paid within ninety days after the decision becomes final.

Section 12-4-960. In addition to all other remedies, a taxpayer who after the petition provided in Section 12-4-720 is filed pays a tax which is declared to be unconstitutional or illegal under this article, may file a claim for refund any time within one year and ninety days after the decision becomes final. If, after administrative remedies are exhausted, the claim for refund is denied by the commission, the taxpayer may file a suit for refund within thirty days from the date of the commission's denial."

SECTION 3. This act takes effect upon approval by the Governor.