H 3422 Session 109 (1991-1992)
H 3422 General Bill, By Kirsh, Elliott and D.E. McTeer
A Bill to amend Title 12, Code of Laws of South Carolina, 1976, relating to
taxation, by adding Chapters 2 and 4 so as to revise and consolidate
provisions relating to taxes and the South Carolina Tax Commission and to
delete obsolete provisions; to amend the 1976 Code by adding Section 12-54-227
so as to provide for the collection of taxes from out-of-state taxpayers; to
amend Section 12-54-240, as amended, relating to confidentiality of tax
returns, so as to consolidate existing confidentiality requirements; and to
repeal Chapters 1 and 3 of Title 12 and Section 12-7-60 of the 1976 Code
relating to the South Carolina Tax Commission and to the bond required for its
officers, agents, and employees.
02/05/91 House Introduced and read first time HJ-6
02/05/91 House Referred to Committee on Ways and Means HJ-6
04/23/91 House Tabled in committee
A BILL
TO AMEND TITLE 12, CODE OF LAWS OF SOUTH CAROLINA,
1976, RELATING TO TAXATION, BY ADDING CHAPTERS 2 AND
4 SO AS TO REVISE AND CONSOLIDATE PROVISIONS
RELATING TO TAXES AND THE SOUTH CAROLINA TAX
COMMISSION AND TO DELETE OBSOLETE PROVISIONS; TO
AMEND THE 1976 CODE BY ADDING SECTION 12-54-227 SO AS
TO PROVIDE FOR THE COLLECTION OF TAXES FROM OUT-OF-STATE TAXPAYERS; TO AMEND SECTION 12-54-240, AS
AMENDED, RELATING TO CONFIDENTIALITY OF TAX
RETURNS, SO AS TO CONSOLIDATE EXISTING
CONFIDENTIALITY REQUIREMENTS; AND TO REPEAL
CHAPTERS 1 AND 3 OF TITLE 12 AND SECTION 12-7-60 OF THE
1976 CODE RELATING TO THE SOUTH CAROLINA TAX
COMMISSION AND TO THE BOND REQUIRED FOR ITS
OFFICERS, AGENTS, AND EMPLOYEES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 12 of the 1976 Code is amended by adding:
"CHAPTER 2
General Provisions
Section 12-2-10. As used in this title, `commission' means the
South Carolina Tax Commission.
Section 12-2-20. As used in this title and unless otherwise
required by the context, the term `person' includes an individual, a trust,
estate, partnership, receiver, association, company, corporation, or any
other entity or group.
Section 12-2-30. The repeal or amendment of a code section or
act does not release or extinguish any tax, interest, penalty, forfeiture, or
liability incurred, unless the repealing section or act expressly so
provides. The repealed or amended code section or act must be treated
as remaining in force for the purpose of sustaining any proper action or
prosecution for the enforcement of the tax, interest, penalty, forfeiture,
or liability.
Section 12-2-40. All contracts that are entered into with intent to
evade payment of taxes or in fraud of the tax laws of this State are
against public policy. The courts of this State may not lend their aid to
enforce a contract entered into as a substitute for, or having as its
consideration, a previous contract declared to be against public policy.
Section 12-2-50. (A) Both the principal and interest of all
bonds, notes, and certificates of indebtedness, by or on behalf of the
United States government, the State, or an authority, agency,
department, or institution of the State, and all counties, school districts,
municipalities, and other political subdivisions of the State, and all
agencies thereof, is exempt from all State, county, municipal, school
district, and all other taxes or assessments, except estate or other transfer
taxes, direct or indirect, general or special, whether imposed for the
purpose of general revenue or otherwise. This exemption extends to all
recipients of all interest paid on the obligation, whether paid directly, or
paid indirectly through a trustee, guardian, or other fiduciary.
(B) `Bonds' as used in this section applies to general obligation
bonds and bonds payable wholly or in part from any special fund or
from the revenues of a project or undertaking of the issuer.
Section 12-2-60. The Comptroller General, with the approval of
the Governor, may extend the time for the performance of the duties
imposed upon the county officers for the collection of taxes.
Section 12-2-70. If a:
(1) person, contrary to the statutes of this State regulating the
appointment of the county auditor and county treasurer:
(a) accepts, holds, or exercises, or attempts to hold or exercise,
the office of county auditor or treasurer; or
(b) fails, when application is made to him by his successor, to
turn over all books, papers, and property of all kinds whatsoever
pertaining to either of the offices;
(2) county treasurer, county auditor, or member of a county board
of tax appeals neglects, refuses, or evades the performance of the duties
imposed upon him by law regulating the assessment and collection of
taxes;
(3) county auditor neglects or refuses to comply with the
requirements of the law in the making up of his duplicate or fails to file
with the Comptroller General the abstracts, vouchers, and settlement
sheets within the time required by law; or
(4) county treasurer, after being notified of his removal or
suspension from office, fails to settle with the county auditor and the
Comptroller General and pay over all state and county monies in his
hands to the officers entitled by law to receive these monies within ten
days after being so notified;
he is guilty of a misdemeanor and, upon conviction, must be punished
by a fine of not more than five thousand dollars or by imprisonment for
not more than five years or both."
SECTION 2. Title 12 of the 1976 Code is amended by adding:
"CHAPTER 4
The South Carolina Tax Commission
Article 1
Commission Organization
Section 12-4-10. The South Carolina Tax Commission is created
to administer and enforce the revenue laws of this State and other laws
specifically assigned to it.
Section 12-4-20. The commission must be provided all necessary
offices, furniture, equipment, books, periodicals, and supplies necessary
to conduct its duties.
Section 12-4-30. (A) The commission consists of three
commissioners, their officers, agents, and employees. The
commissioners are appointed by the Governor with the advice and
consent of the Senate. Commissioners shall possess sound moral
character, superior knowledge in taxation, and proven administrative
ability. The Governor shall designate one of the commissioners as
chairman, giving consideration to prior service as a commissioner or
employee of the commission.
(B) If a vacancy on the commission occurs when the General
Assembly is not in session, it must be filled by the Governor's
appointment for the unexpired term, subject to confirmation by the
Senate at the next session of the General Assembly. Commissioners
may be removed by the Governor for cause shown, with the advice and
consent of the Senate. If cause for removal arises when the Senate is not
in session, the Governor may suspend the commissioner and shall fill the
vacancy thus created until the General Assembly next convenes.
Section 12-4-40. Each commissioner, within thirty days after
notice of appointment and before taking office, shall take and file with
the Secretary of State the oath of office prescribed by the state
Constitution.
Section 12-4-50. The terms of office of the commissioners are six
years each, with the term of one member expiring every two years. Each
commissioner shall remain in office until his successor is appointed and
qualifies.
Section 12-4-60. The commissioners shall receive an annual
salary set by the General Assembly and reimbursement for their
expenses incurred while engaged in the work of the commission in the
same manner as other state officers.
Section 12-4-70. The chairman of the commission shall devote the
time required to perform the duties of the office and may not:
(1) engage in any occupation or business interfering with or
inconsistent with his duties;
(2) serve on or under a committee of a political party; or
(3) contribute, directly or indirectly, money or anything of value
in support of a candidate for office or to a political organization.
Article 3
General Powers and Duties
Section 12-4-310. The commission shall:
(1) hold meetings, as considered necessary by the chairman, with
a majority of the commissioners constituting a quorum. The commission
may hold meetings, transact business, or conduct investigations at any
place necessary; however, its primary office is in Columbia;
(2) formulate and recommend legislation to enhance uniformity,
enforcement, and administration of the tax laws, and to secure just
taxation and improvements in the system of taxation;
(3) consult and confer with the Governor upon the subject of
taxation, the administration of the laws, and the progress of the work of
the commission, and furnish the Governor reports, assistance, and
information he may require;
(4) prepare and publish, annually, statistics reasonably available
with respect to the operation of the commission, including amounts
collected, and other facts it considers pertinent and valuable;
(5) make available to the authorities of a political subdivision in
the State levying a tax based on gross receipts any records indicating the
amount of receipts reported to the commission;
(6) hire all necessary personnel, including officers, agents,
deputies, experts, and assistants, and assign to them duties and powers
as the commission prescribes;
(7) require those of its officers, agents, and employees it
designates to give bond for the faithful performance of their duties in the
sum and with the sureties it determines; and all premiums on the bonds
must be paid by the commission;
(8) pay travel expenses, purchase, or lease all necessary facilities,
equipment, books, periodicals, and supplies for the performance of its
duties; and
(9) exercise and perform other powers and duties as granted to it
or imposed upon it by law.
Section 12-4-320. The commission may:
(1) make rules and promulgate regulations, not inconsistent with
law, to aid in the performance of its duties. The commission may
prescribe the extent, if any, to which these rules and regulations must be
applied without retroactive effect;
(2) upon written application, determine the tax effects of
transactions and the tax liability of taxpayers, upon facts furnished to it,
and it may revoke or modify the rulings if the facts should develop
differently later. The commission, in its discretion, may publish these
rulings. This publication may be in brief hypothetical form so as to give
all pertinent facts and decisions without violating the provisions of
Section 12-54-240;
(3) compromise any tax, interest, or penalty imposed by this title
or other law assigned to it and may return to the owner, in whole or in
part, any goods seized or confiscated;
(4) enter into a written agreement with a person with regard to a
tax liability. If the agreement is approved by a majority of the
commissioners, it is final and conclusive and the case may not be
reopened by administrative or judicial action or otherwise, except in
cases of fraud, malfeasance, or misrepresentation;
(5) publish its findings and decisions in all controversies resolved
by it. This publication may be in brief hypothetical form so as to give
all pertinent facts, decisions, and reasons without violating the
provisions of Section 12-54-240.
Section 12-4-330. (A) The commission may summon witnesses
to appear and give testimony and to produce records, books, papers, and
documents relating to any matters which the commission has authority
to investigate or determine.
(B) The commission may cause the deposition of witnesses
residing within or without the State or absent from the State to be taken
upon notice to the interested party, if any, in the manner that depositions
of witnesses are taken in civil actions pending in the circuit court in any
matter which the commission has authority to investigate or determine.
(C) Oaths to witnesses may be administered by the secretary of the
commission or a member of the commission. A person who testifies
falsely in a matter under consideration by the commission is guilty of
and, upon conviction, will be punished for perjury.
(D) Officers who serve summons or subpoenas and witnesses
appearing before the commission will receive the same compensation as
officers and witnesses in the circuit court. The commission may incur
and pay the expense of obtaining expert witnesses or of other evidence
for use by the commission in a judicial or administrative proceeding.
This compensation and expert witness expense must be paid upon
certificate of the commission by the State Treasurer, by drawing upon
funds from the type of tax that is involved in the proceeding, or by the
political subdivision or political subdivisions for whose benefit these
expenses were incurred.
Section 12-4-340. The commission, for the purposes of collecting
delinquent taxes due from a taxpayer not residing in the State, may
contract with a collection agency, within or without the State, for the
collection of delinquent taxes, including penalties and interest as
provided in Section 12-54-227.
Article 5
Powers and Duties with Respect to
Property Taxes
Section 12-4-510. In addition to other powers and duties required
by law, the commission, in order to administer effectively the equitable
assessment of property for taxation:
(1) has all of the powers conferred by law upon the former State
Board of Equalization and upon the former State Board of Assessors
before February 20, 1915;
(2) annually shall make the levy upon the assessed value of
property subject to taxation necessary to raise the annual appropriations
made by the General Assembly;
(3) may equalize the assessment of all property in this State
between persons of the same assessment district, between municipalities
of the same county and between different counties of the State, and the
property assessed by the commission in the first instance; and
(4) shall order reassessment of real and personal property, or any
class or classes of either, in an assessment district when requested by a
county legislative delegation or when, in the judgment of the
commission, the reassessment is advisable or necessary to the end that
all classes of property in the assessment district are assessed in
compliance with the law. For this purpose the commission may require
the assessors making the original assessment to make the reassessment
or, if the commission considers it advisable, it may appoint a special
county assessor and deputy assessors to reassess all or any real or
personal property, or any class or classes of property, in an assessment
district, whether or not the same has been equalized by a board, the
county board of tax appeals, or the commission.
Section 12-4-520. The commission:
(1) shall call meetings of all county assessors, to provide
instruction as to the law governing the assessment and taxation of all
classes of property, and the commission shall formulate and prescribe
rules to govern assessors and county boards of tax appeals in the
discharge of their duties;
(2) shall confer with, advise, and direct assessors and county
boards of tax appeals as to their duties under the laws of the State;
(3) may visit any of the counties in the State to investigate the
assessment, equalization, and taxation of all property subject to taxation
and take any action needed to insure the proper assessment, equalization,
and taxation of the property;
(4) as often as annually, shall examine all the books, papers, and
accounts of assessors, auditors, treasurers, and tax collectors, with a
view to protecting the interests of the State, counties, and other political
subdivisions, and rendering these officers aid or instruction;
(5) shall require county auditors to place upon the assessment
rolls omitted property which may have escaped assessment and taxation
in whole or in part, in the current or previous years; and
(6) may extend the time for the performance of the duties imposed
upon the county officers for the assessment of taxes, and, when the
Comptroller General extends the time for the collection of taxes, the
commission may postpone the time for the imposition of penalties.
Section 12-4-530. The commission shall:
(1) examine cases in which the laws of this State relating to the
valuation, assessment, or taxation of property is complained of, or
discovered to have been evaded or violated in any manner;
(2) require the Attorney General or circuit solicitor to assist in the
commencement and prosecutions of actions and proceedings for
penalties, forfeitures, removals, and punishment for violation of the laws
of this State in respect to the assessment and taxation of property;
(3) direct proceedings, actions, and prosecutions to be instituted
to enforce the laws relating to penalties, liabilities, and punishment of
public officers and officers and agents of corporations for failure or
neglect to comply with the provisions of the laws of this State governing
the assessment and taxation of property and the rules of the commission;
and
(4) cause complaints to be made against assessors, county boards
of tax appeal, or other assessing and taxing officers to the proper
authority for their removal from office for official misconduct or neglect
of duty.
Section 12-4-540. (A) The commission has the sole
responsibility for the appraisal, assessment, and equalization of the
taxable values of corporate headquarters, corporate office facilities, and
distribution facilities and of the real and personal property owned, used,
or leased by the following businesses in the conduct of their business:
(1) manufacturing;
(2) railway;
(3) private car line;
(4) airline;
(5) water, heat, light and power;
(6) telephone;
(7) cable television;
(8) sewer;
(9) pipeline;
(10) mining.
In addition, the commission has the sole responsibility for the appraisal,
assessment, and equalization of the taxable values of the personal
property of merchants.
If a business conducts more than one activity or it is unclear whether
property comes within the terms of this section, the commission has the
sole authority to determine if the company is within this section.
(B) Except as otherwise provided, the commission may use any
accepted or recognized valuation method which in the commission's
opinion clearly reflects the property's fair market value, including
methods within the unit valuation concept.
(C) When the unit valuation concept is used, the value allocated
to this State must be distributed to the taxing entities in which the
property is situated.
(D) Except as otherwise provided, the commission shall assess all
leased real and personal property to the owner. The owner of the
property shall make returns to the commission on forms prescribed.
(E) When the commission uses the unit valuation concept,
property taxes on all leased real and personal property must be paid by
the lessee. Whether or not the unit valuation concept is used, an airline
or private car line shall pay property taxes on all leased real and personal
property in its control.
(F) If the commission discovers that property required by law to
be returned to the commission has not been returned, the commission
may value and assess the property. If property has been returned or
assessed incorrectly, the commission may value and assess the property
and give notice to the taxpayer of the valuation and assessment. After
the expiration of the appeal period, the commission shall certify the
corrected assessment to the county auditor of the county where the
property is located.
Section 12-4-550. The commission shall:
(1) require municipal, county, and other public officers to report
information as to the assessment of property, collection of taxes, receipts
from licenses and other sources, and information necessary in the work
of the commission in the form the commission prescribes; and
(2) require all persons to furnish information concerning their
capital, bonded or other debts, current assets and liabilities, value of
property, earnings, operating and other expenses, taxes, and other facts
necessary for the commission to ascertain the value and relative tax
burden borne by all kinds of property.
Section 12-4-560. The commission shall prepare appropriate
manuals, guides, and other aids for the equitable assessment of all
properties and prepare suitable forms for an adequate listing and
description of property by groups and classes.
Section 12-4-570. The commission, at the request of the Governor
or a member of the General Assembly, shall prepare and make available
a report showing all taxable property in the State and its value in
tabulated form.
Article 7
Application, Determination, and
Revocation of Exemptions from Property Taxes
Section 12-4-710. The commission shall determine if any property
qualifies for exemption from local property taxes under Section 12-37-220 in accordance with the Constitution and general laws of this State.
This determination must be made on an annual basis and the appropriate
county official so advised by June first of each year by the commission.
Section 12-4-720. (A) Applications for property exemptions
must be filed as follows:
(1) Except as otherwise provided in items (2) and (3) of this
subsection, any tax-exempt property owner or property owner whose
property may qualify for property exemption shall file an application for
exemption with the commission between January first and April
fifteenth of the first year for which the exemption is claimed.
(2) Owners of property exempt under Section 12-37-220A(7)
and (8) and B(17) shall file an application for exemption before the
sixteenth day of the fourth month after the close of the accounting period
regularly employed by the taxpayer for income tax purposes in
accordance with Chapter 7 of this title.
(3) Owners of property exempt under Section 12-3-220B(26)
and (27) and churches which own motor vehicles shall file an
application for exemption within sixty days before or within thirty days
after the date on which the motor vehicle was registered or the
registration renewal date.
Thereafter, the owner is not required to file an additional
application, unless there is a change in the status of the property as
reported on the initial application or unless requesting an exemption for
property which was not included on the initial or subsequent application.
(B) The provisions of subsection (A) of this section do not apply
in the case of properties owned by the United States government or
those exempt properties enumerated in Section 12-37-220A(1), (5), (9),
and (10) and B (9), (13), (14), (15), (23), (25), and (30).
Section 12-4-730. The commission, upon receipt of an application
and upon proper investigation, may declare the real and personal
property of a person qualifying for an exemption from ad valorem
taxation identified in this chapter as exempt and shall certify the
exemption to the auditor's office in the county in which the property is
located. Upon certification by the commission, the auditor shall void
any tax notice applicable to the property.
Section 12-4-740. (A) An owner of tax exempt property or a
property owner requesting tax exemption shall furnish information and
records requested by the commission. The commission and its agents
may examine portions of the financial records of the owners of real and
personal property as necessary to determine if the property qualifies for
tax exempt status.
(B) The commission and its authorized agents may enter the
premises upon reasonable notice and inspect them for tax exemption
purposes.
Section 12-4-750. (A) The commission may revoke tax exempt
status if the property does not qualify or continue to qualify for tax
exempt status under the provisions of the Constitution and the general
laws of the State.
(B) If the commission finds within three years from the date that
taxes would have been due on property that has been granted an
exemption that the exemption was for any reason improperly granted
due to incomplete, misleading, or fraudulent information furnished by
the applicant or its agents, the commission shall notify the appropriate
county official, and the county auditor shall enter on the duplicate the
taxes that would have been due for those years that the property escaped
taxation, with an added ten percent penalty.
Section 12-4-760. In addition to any right of appeal otherwise
provided by law, a taxpayer may appeal from the decision of the
commission to the Tax Board of Review for an interpretation of the
Constitution or state laws regarding his property tax exemption status
upon payment of his property taxes under protest. The county governing
body may appeal the decision of the commission to the Tax Board of
Review."
SECTION 3. Article 1, Chapter 54, Title 12 of the 1976 Code is
amended by adding:
"Section 12-54-227. (A) As provided by Section 12-4-340,
the commission may, for the purposes of collecting delinquent taxes due
from a taxpayer not residing in this State, contract with a collection
agency, within or without this State, for the collection of the delinquent
taxes, including penalties and interest. Delinquent tax claims may be
assigned to the collection agency, for the purpose of litigation in the
agency's name and at the agency's expense, as a means of facilitating and
expediting the collection process. For purposes of this section, a
delinquent tax claim is defined as a tax liability that is due and owing for
a period longer than six months and for which the taxpayer has been
given at least three notices requesting payment, one of which has been
sent by certified or registered mail. The notice sent by certified or
registered mail will include a statement that the matter of the taxpayer's
delinquency may be referred to a collection agency in the taxpayer's
home state.
(B) Fees for services, reimbursements, or other remuneration to
the collection agency must be based on the amount of tax, penalty, and
interest actually collected. Each contract entered into between the
commission and the collection agency must provide for the payment of
fees for these services, reimbursements, or other remuneration not in
excess of fifty percent of the total amount of delinquent taxes, penalties,
and interest actually collected.
All funds collected, less the fees for collection services as provided
in the contract, must be remitted to the commission within forty-five
days from the date of collection from a taxpayer. Forms to be used for
these remittances must be prescribed by the commission.
(C) The contract with a collection agency must provide that the
collection agency acknowledges that it is receiving income from sources
within this State or doing business in this State for purposes of income
taxation.
(D) Before entering into a contract, the commission shall require
the collection agency to post a bond guaranteeing compliance with the
terms of the contract, not in excess of one hundred thousand
dollars."
SECTION 4. Section 12-54-240(A) of the 1976 Code is amended to
read:
"(A) Except in accordance with proper judicial order or as
otherwise provided by law, it is unlawful for the members of
the commission or any a deputy, agency, clerk, or other
officer or employee of the commission, or any a person
engaged or retained by the State Auditor's Office for the purpose of
examining the records of the commission to divulge or make known in
any manner any particulars set forth or disclosed in any
a report or return required under Chapters 7, 15, 16,
17, 35, or 35 36 of this title.
A person, firm, or governmental entity and its employees, under
contract with the commission, having access to information contained
in or produced from a tax return, document, or magnetically stored data
may not publish or disclose any part of the data or information resulting
from the data except to the commission, or as authorized by the
commission, or as otherwise provided by law, or by an order of a court
of competent jurisdiction. This provision does not exempt the
commission from the provisions of the State Procurement Code.
Any A person violating the provisions of this section
is guilty of a misdemeanor and, upon conviction, must
be punished by a fine of not more than one thousand dollars or by
imprisonment for not more than one year, or both. If the offender is an
officer or an employee of this State he must be dismissed from office
and is disqualified from holding any public office in this State for a
period of five years thereafter. If the offender is an officer or
employee of a company retained by the State on an independent contract
basis under subsection (D) of this section, the contract is
immediately terminated immediately, and the company
is not eligible to contract with the State for this purpose for a period
of five years thereafter."
SECTION 5. Chapters 1 and 3 of Title 12 of the 1976 Code are
repealed. Section 12-7-60 of the 1976 Code is repealed.
SECTION 6. The Code Commissioner shall:
(1) place all appropriate provisions of acts dealing with Chapters
1 and 3, Title 12 of the 1976 Code enacted in the 1991 session of the
General Assembly in the appropriate part of Chapters 2 and 4, Title 12
of the 1976 Code as added by this act, and in so doing he shall modify
the language of code sections as necessary to implement the intent of the
General Assembly;
(2) eliminate or delete from the chapters added by this act any
provision of law the subject matter of which was repealed or eliminated
by the General Assembly in the 1991 session;
(3) amend provisions in the chapters added by this act
corresponding to amendments of the tax laws of this State enacted by the
General Assembly during the 1991 session in other acts;
(4) correct cross references as he considers necessary in affected
provisions of the 1976 Code.
SECTION 7. Except where inappropriate, a reference in a law,
regulation, or other document to Chapters 1 and 3 of Title 12 of the 1976
Code, is considered a reference to the appropriate provisions of Chapters
2 and 4 of Title 12, Chapter 5 of Title 11, and Section 12-54-227, all of
the 1976 Code.
SECTION 8. This act takes effect July 1, 1991.
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