S 880 Session 110 (1993-1994)
S 0880 Joint Resolution, By Giese, Lander and M.T. Rose
A Joint Resolution to provide for the manner in which and procedures under
which persons who are entitled to an income tax refund from the state of South
Carolina on the basis of the decision in the case of Davis V. Michigan must be
paid which shall include one of four options involving cash refunds, tax
credits, or a combination thereof; and to provide for the manner in which
funding for these refunds or credits must be provided, including the certain
use of surplus and lapsed funds and appropriations from the Capital Reserve
Fund for this purpose pursuant to Section 36, Article III of the Constitution
of this State.
10/25/93 Senate Prefiled
10/25/93 Senate Referred to Committee on Finance
01/11/94 Senate Introduced and read first time SJ-27
01/11/94 Senate Referred to Committee on Finance SJ-27
A JOINT RESOLUTION
TO PROVIDE FOR THE MANNER IN WHICH AND PROCEDURES
UNDER WHICH PERSONS WHO ARE ENTITLED TO AN INCOME
TAX REFUND FROM THE STATE OF SOUTH CAROLINA ON THE
BASIS OF THE DECISION IN THE CASE OF DAVIS V.
MICHIGAN MUST BE PAID WHICH SHALL INCLUDE ONE
OF FOUR OPTIONS INVOLVING CASH REFUNDS, TAX
CREDITS, OR A COMBINATION THEREOF; AND TO PROVIDE
FOR THE MANNER IN WHICH FUNDING FOR THESE REFUNDS
OR CREDITS MUST BE PROVIDED, INCLUDING THE CERTAIN
USE OF SURPLUS AND LAPSED FUNDS AND APPROPRIATIONS
FROM THE CAPITAL RESERVE FUND FOR THIS PURPOSE
PURSUANT TO SECTION 36, ARTICLE III OF THE
CONSTITUTION OF THIS STATE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. (A) Persons who have timely filed a claim for refund
with the South Carolina Department of Revenue and Taxation on the
basis of the decision in the case of Davis v. Michigan, who are
a class action plaintiff in the case of Bass v. The State of South
Carolina, or who have otherwise timely instituted other valid
administrative or judicial actions against the State of South Carolina or
the Department of Revenue and Taxation on the basis of the Davis
v. Michigan decision, must be paid for such claims by the State of
South Carolina according to one of the following alternatives:
(1) a cash payment for the claim in one lump sum not earlier than
January 1, 1995, and not later than June 30, 1995;
(2) a cash payment for the claim in equal annual installments over
a period not to exceed four years, with the first installment to be paid
during the period January 1, 1995, to June 30, 1995, and the remaining
installments to be paid annually thereafter during this same period. The
taxpayer shall select the number of years over which the payments shall
occur;
(3) a credit against future State of South Carolina individual
income tax liability over a period not to exceed four taxable years,
beginning with the year 1995. Only those taxpayers who report their
income on a calendar year basis may elect this option. The credit may
be taken in whole or in part in any year of the four-year period as the
taxpayer elects;
(4) a combination of options (1), (2), or (3), as the taxpayer elects.
(B) A taxpayer must notify the Department of Revenue and Taxation
in writing between the period July 1, 1994, to December 31, 1994, of
which of the four options contained in subsection (A) he selects. Failure
to notify the department by December 31, 1994, of the option selected
constitutes a waiver of the claim. The department before September 15,
1994, shall attempt to inform each taxpayer it has reason to believe is
affected by the provisions of this resolution of the contents of this
resolution, the options of the taxpayer, and the consequences of failure
to notify the department by December 31, 1994, of the option desired by
the taxpayer. However, failure by the department to so inform any
taxpayer is not grounds to excuse or mitigate the taxpayer's failure to
notify the department by December 31, 1994, of the option desired.
(C) All claims must be paid or credited with interest at the rate of six
percent per annum from the date required by Section 12-54-30 of the
1976 Code until December 31, 1994.
(D) No claim shall be paid or credited which the department finds is
not valid or timely filed. The department may require supporting
documentation of a taxpayer's claim as it considers necessary to establish
that a valid claim exists. However, the department may not deny a claim
on the ground that the decision of Davis v. Michigan is
incorrect or that South Carolina law as applied to this decision results in
the taxpayer not being entitled to a refund of South Carolina income
taxes paid due to the inclusion of federal retirement benefits in income
for that year above the level required for comparable state retirement
benefits of the same year.
(E) A person to which subsection (A) does not apply because no
action has been taken by him as of the effective date of this resolution
to secure such a refund but who believes he is entitled to a refund or
credit authorized by this resolution may notify the department between
the period July 1, 1994, to December 31, 1994, of the option which he
selects together with supporting documentation justifying the claim as
the department requires, and this must be considered a timely filing of
his claim for refund.
(F) Each year in which a taxpayer alleges his federal retirement
benefits were improperly taxed by the State of South Carolina on his
state income tax return for that year constitutes a separate claim.
(G) The claim of a person entitled to a cash refund or credit under
this resolution who dies before December 31, 1994, may be maintained
by and is available to his primary beneficiary or beneficiaries as
determined by the probate court having jurisdiction of his estate or by
the law of the jurisdiction in which he died if his estate was not admitted
to probate.
SECTION 2. The funding for the cash refunds or credits provided for
in Section 1 of this resolution must be as provided by the General
Assembly in the annual appropriations act for the years affected except
that:
(1) Notwithstanding any other provision of law and subject to the
constitutionally required replenishment of reserve funds from year-end
surplus funds, surplus or lapsed funds from fiscal years beginning with
fiscal year 1992-93 and ending with fiscal year 1997-98 must be used
for these purposes to the extent necessary as determined by the Budget
and Control Board.
(2) After the use of surplus or lapsed funds from a preceding fiscal
year as provided in item (1), and subject to any other constitutionally
required uses of the funds in the Capital Reserve Fund, any
appropriations from the Capital Reserve Fund for any fiscal year
beginning with fiscal year 1993-94 and ending with fiscal year 1998-99
must be used for these purposes to the extent necessary as determined by
the Budget and Control Board. These appropriations from the Capital
Reserve Fund are subject to the special voting and other requirements
contained in Section 36 of Article III of the Constitution of this State.
Pursuant to Section 36 of Article III, the appropriation in this item (2)
from the Capital Reserve Fund is declared to be for a nonrecurring
purpose and is declared by the General Assembly to be the highest
priority for the use of these funds absent a constitutionally mandated
priority.
SECTION 3. This joint resolution takes effect upon approval by the
Governor.
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