S*319 Session 107 (1987-1988)
S*0319(Rat #0105, Act #0070 of 1987) General Bill, By Senate Finance
Similar(S 176)
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Chapter 16
in Title 12, so as to enact the South Carolina Estate Tax Act applicable to
decedents dying after June 30, 1991; to amend Sections 12-15-61, 12-15-251,
and 12-15-550, relating to amounts specifically exempt from the South Carolina
Estate Tax, so as to increase the exemption in phases until the effective date
of the South Carolina Estate Tax Act; to amend Section 12-49-70, relating to
the period after which taxes are presumed to be paid, so as to exempt the
recapture estate tax from the presumption; to amend Section 12-54-70, relating
to enforcement and collection of taxes, so as to correct a cross-reference; to
amend Section 2-801 of the South Carolina Probate Code, relating to
disclaimers, so as to correct a cross-reference; to repeal Chapter 15 of Title
12, relating to the estate tax, for decedents dying after June 30, 1991; to
repeal Chapter 17 of Title 12, relating to the gift tax, effective for gifts
made after December 31, 1991; and to repeal Sections 12-15-1540 and
12-15-1550, relating to the estate tax, effective July 1, 1987.
01/28/87 Senate Introduced, read first time, placed on calendar
without reference SJ-319
02/17/87 Senate Read second time SJ-537
02/17/87 Senate Ordered to third reading with notice of
amendments SJ-537
02/24/87 Senate Read third time and sent to House SJ-631
02/25/87 House Introduced and read first time HJ-714
02/25/87 House Referred to Committee on Ways and Means HJ-715
04/08/87 House Committee report: Favorable Ways and Means HJ-1653
04/15/87 House Read second time HJ-1880
04/16/87 House Read third time and enrolled HJ-1970
04/21/87 House Recalled from Legislative Council HJ-2052
04/22/87 House Reconsider vote whereby read 3rd time & enrolled
HJ-2067
04/22/87 House Amended HJ-2067
04/22/87 House Read third time HJ-2067
04/22/87 House Returned HJ-2067
04/23/87 Senate Concurred in House amendment and enrolled SJ-1480
04/30/87 Ratified R 105
05/06/87 Signed By Governor
05/06/87 Effective date 05/06/87
05/06/87 Act No. 70
05/15/87 Copies available
(A70, R105, S319)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 16
IN TITLE 12 SO AS TO ENACT THE SOUTH CAROLINA ESTATE TAX ACT APPLICABLE TO
DECEDENTS DYING AFTER JUNE 30, 1991; TO AMEND SECTIONS 12-15-61, 12-15-251, AND
12-15-550, RELATING TO AMOUNTS SPECIFICALLY EXEMPT FROM THE SOUTH CAROLINA ESTATE
TAX, SO AS TO INCREASE THE EXEMPTION IN PHASES UNTIL THE EFFECTIVE DATE OF THE
SOUTH CAROLINA ESTATE TAX ACT; TO AMEND SECTION 12-49-70, RELATING TO THE PERIOD
AFTER WHICH TAXES ARE PRESUMED TO BE PAID, SO AS TO EXEMPT THE RECAPTURE ESTATE
TAX FROM THE PRESUMPTION; TO AMEND SECTION 12-54-70, RELATING TO ENFORCEMENT AND
COLLECTION OF TAXES, SO AS TO CORRECT A CROSS-REFERENCE; TO AMEND SECTION 2-801
OF THE SOUTH CAROLINA PROBATE CODE, RELATING TO DISCLAIMERS, SO AS TO CORRECT A
CROSS-REFERENCE; TO REPEAL CHAPTER 15 OF TITLE 12 RELATING TO THE ESTATE TAX, FOR
DECEDENTS DYING AFTER JUNE 30, 1991; TO REPEAL CHAPTER 17 OF TITLE 12 RELATING
TO THE GIFT TAX, EFFECTIVE FOR GIFTS MADE AFTER DECEMBER 31, 1991; AND TO REPEAL
SECTIONS 12-15-1540 AND 12-15-1550 RELATING TO THE ESTATE TAX, EFFECTIVE JULY 1,
1987.
Be it enacted by the General Assembly of the State of South Carolina:
Estate tax enacted
SECTION 1. Title 12 of the 1976 Code is amended by adding:
"CHAPTER 16
Estate Tax
Article 1. Definitions and Domicile
Article 3. Interstate Compromise and
Arbitration of Death Taxes
Article 5. Imposition of Tax
Article 7. Tax on Generation-Skipping Transfers
Article 9. Recapture Tax on Certain Use-
Valuations
Article 11. Returns and Payment of Tax
Article 13. Assessment and Collection
Article 15. Nonpayment of Tax, Lien for Unpaid
Taxes, Certificate of Release from
Lien
Article 17. Enforcement and Liabilities
Article 19. Miscellaneous Provisions
Article 1
Definitions and Domicile
Section 12-16-10. This chapter may be cited as the 'South Carolina Estate Tax
Act'.
Section 12-16-20. As used in this chapter, unless the context clearly shows
otherwise, the term or phrase:
(1) 'Decedent' means a deceased person.
(2) 'Federal credit' means the maximum amount of the credit for state death
taxes allowable by Internal Revenue Code Section 2011. The term 'maximum amount'
must be construed so as to take full advantage of the credit as allowed by the
Internal Revenue Code.
(3) 'Gross estate' means 'gross estate' as defined in Internal Revenue Code
Section 2031.
(4) 'Intangible personal property' means incorporeal personal property
including deposits in banks, negotiable instruments, mortgages, debts,
receivables, shares of stock, bonds, notes, creditors, evidences of an interest
in property, evidences of debt, and choses in action generally.
(5) 'Internal Revenue Code' means the Internal Revenue Code of 1986, as
amended through December 31, 1986.
(6) 'Net estate' means the net estate as determined under the provisions of
the Internal Revenue Code.
(7) 'Nonresident' means a decedent who was domiciled outside of this State at
his death.
(8) 'Person' means persons, corporations, associations, joint stock companies,
and business trusts.
(9) 'Personal representative' means the personal representative of the estate
of the decedent, appointed, qualified, and acting within the State, or, if there
is no personal representative appointed, qualified, and acting within the State,
then any person in actual or constructive possession of the South Carolina gross
estate of the decedent.
(10) 'Resident' means a decedent who was domiciled in this State at his death.
(11) 'State' means any state, territory, or possession of the United States
and the District of Columbia.
(12) 'Tangible personal property' means corporeal personal property, including
money.
(13) 'Taxable estate' means 'taxable estate' as defined in Internal Revenue
Code Section 2051.
(14) 'Transfer' includes the passing of property or any interest therein, in
possession or enjoyment, present or future, by inheritance, descent, devise,
succession, bequest, grant, deed, bargain, sale, gift, or appointment in the
manner herein described.
(15) 'United States' when used in a geographical sense includes only the fifty
states and the District of Columbia.
(16) 'Value' means 'value' as finally determined for federal estate tax
purposes under the Internal Revenue Code.
Section 12-16-30. For the purposes of this chapter, every person is presumed
to have died a resident of this State if:
(1) The person has dwelt or has lodged in the State during and for the greater
part of any period of twelve consecutive months in the twenty-four months next
preceding death, notwithstanding the fact that from time to time during the
twenty-four months the person may have sojourned outside of this State, and
without regard to whether or not the person may have voted, may have been
entitled to vote, or may have been assessed for taxes in this State; or
(2) The person was a resident of South Carolina, sojourning outside of this
State for any period of time.
The burden of proof in an estate tax proceeding
is on any person claiming exemption by reason of alleged nonresidence, and orders
relating to domicile previously entered in the probate proceedings are not
conclusive for the purposes of this chapter.
Article 3
Interstate Compromise and Arbitration of Death Taxes
Section 12-16-210. This article may be cited as the Uniform Act on Interstate
Compromise and Arbitration of Death Taxes.
Section 12-16-220. This article must be interpreted and construed to
effectuate its general purpose to make uniform the law of those states which
enact it.
Section 12-16-230. When the commission claims that a decedent was domiciled
in this State at the time of his death and the taxing authorities of another
state or states make a like claim on behalf of their state or states, the
commission may make a written agreement with the other taxing authorities and
with the executor or administrator to submit the controversy to the decision of
a board consisting of one or any uneven number of arbitrators. The executor or
administrator is authorized to make the agreement. The parties to the agreement
shall select the arbitrator or arbitrators.
Section 12-16-240. The board shall hold hearings at the times and places as
it may determine, upon reasonable notice to the parties to the agreement, all of
whom are entitled to be heard, to present evidence, and to examine and
cross-examine witnesses.
Section 12-16-250. The board has the power to administer oaths, take
testimony, subpoena, and require the attendance of witnesses and the production
of books, papers, and documents, and issue commissions to take testimony.
Subpoenas may be signed by any member of the board. In case of failure to obey
a subpoena, any judge of a court of record of this State, upon application by the
board, may make an order requiring compliance with the subpoena and the court may
punish failure to obey the order as a contempt.
Section 12-16-260. The board shall, by majority vote, determine the domicile
of the decedent at the time of his death. This determination is final for
purposes of imposing and collecting death taxes but for no other purpose.
Section 12-16-270. Except as provided in Section 12-16-250 in respect of the
issuance of subpoenas, all questions arising in the course of the proceeding must
be determined by majority vote of the board.
Section 12-16-280. The commission, the board, or the executor or administrator
shall file the determination of the board as to domicile, the record of the
board's proceedings, and the agreement, or a duplicate, made pursuant to Section
12-16-230, with the authority having jurisdiction to assess the death taxes in
the state determined to be the domicile and shall file copies of all such
documents with the authorities that would have been empowered to assess the death
taxes in each of the other states involved.
Section 12-16-290. In any case where it is determined by the board that the
decedent died domiciled in this State, interest or penalties, if otherwise
imposed by law, for nonpayment of death taxes between the date of the agreement
and of filing of the determination of the board as to domicile.
Section 12-16-300. Nothing contained in this article prevents at any time a
written compromise, if otherwise lawful, by all parties to the agreement made
pursuant to Section 12-16-230, fixing the amounts to be accepted by this and any
other state involved in full satisfaction of death taxes.
Section 12-16-310. The compensation and expenses of the members of the board
and its employees may be agreed upon among the members and the executor or
administrator and, if they cannot agree, must be fixed by the probate court of
the state determined by the board to be the domicile of the decedent. The
amounts so agreed upon or fixed are considered an administration expense and are
payable by the executor or administrator.
Section 12-16-320. This article applies only to arbitration cases in which
each of the states involved has a law identical with or substantially similar to
this article.
Article 5
Imposition of Tax
Section 12-16-510. (A) A tax in the amount of the federal credit is imposed
on the transfer of the taxable estate of every resident, subject, where
applicable, to the credit provided in subsection (B).
(B) If the real and tangible personal property of a resident is located
outside of this State and is subject to a death tax imposed by another state for
which the federal credit is allowed, the amount of tax due under this section
must be credited with the lesser of:
(1) the amount of the death tax paid the other state and credited against
the federal estate tax; or
(2) an amount computed by multiplying the federal credit by a fraction, the
numerator of which is the value of that part of the gross estate over which
another state or states have jurisdiction to the same extent to which this State
would exert jurisdiction under this chapter with respect to the residents of the
other state or states and the denominator of which is the value of the decedent's
gross estate.
(C) Property of a resident includes:
(1) real property situated in this State;
(2) tangible personal property having an actual situs in this State; and
(3) intangible personal property owned by the resident regardless of where
it is located.
Section 12-16-520. (A) A tax in an amount computed as provided in this section
is imposed on the transfer of every nonresident's taxable estate located in this
State.
The tax is an amount computed by multiplying the federal credit by a fraction,
the numerator of which is the value of that part of the gross estate over which
this State has jurisdiction for estate tax purposes and the denominator of which
is the value of the decedent's gross estate.
(B) For purposes of this section, property located in this State which is
taxable to a nonresident includes:
(1) real property and real property interests located in this State,
including mineral interests, royalties, production payments, leasehold interests,
or working interests in oil, gas, coal, or any other minerals; and
(2) tangible personal property having an actual situs in this State.
Section 12-16-530. (A) A tax in an amount computed as provided in this section
is imposed upon the transfer of real property and tangible personal property
having an actual situs in this State and upon intangible personal property
physically present within this State of every person who at the time of death was
not a resident of the United States.
The tax is an amount computed by multiplying the federal credit by a fraction,
the numerator of which is the value of that part of the gross estate over which
this State has jurisdiction for estate tax purposes and the denominator of which
is the decedent's gross estate taxable by the United States wherever situated.
(B) Resident aliens of the United States are subject to the tax imposed by
this chapter under Section 12-16-520 when the decedent, at the time of death, was
not a resident of this State but was a resident of the United States. A resident
alien who, at the time of death, was a resident of this State and a resident of
the United States is subject to the tax imposed by this chapter under Section
12-16-510.
(C) For purposes of this section, stock in a corporation organized under the
laws of this State is considered physically present within this State.
Article 7
Tax on Generation-Skipping Transfers
Section 12-16-710. (A) Terms, phrases, and words used in this article, except
for those defined in subsection (B) of this section, are defined as they are
defined under Chapter 13 of subchapter B of the Internal Revenue Code of 1986.
(B) As used in this article the phrase:
'Original transferor' means any transferor, as defined in Internal Revenue Code
Section 2652, who by grant, gift, trust, will, or otherwise makes a transfer of
real or personal property that results in a federal generation-skipping transfer
tax under applicable provisions of the Internal Revenue Code at any time and for
which a credit is available under Section 2604.
Section 12-16-720. (A) A tax is imposed upon every generation-skipping
transfer, where the original transferor is a resident of this State at the date
of original transfer, in an amount equal to the maximum amount allowable as a
credit for state generation-skipping transfer taxes under Internal Revenue Code
Section 2604, to the extent the credit exceeds the aggregate amount of all taxes
on the same transfer actually paid to the several states of the United States,
other than this State.
(B) A tax is imposed upon every generation-skipping transfer where the
original transferor is not a resident of this State at the date of the original
transfer, but where the generation-skipping transfer includes real or personal
property having a situs in this State, in an amount equal to the maximum amount
allowable as a credit for state generation-skipping transfer taxes under Internal
Revenue Code Section 2604, reduced by an amount which bears the same ratio to the
total state tax credit allowable for federal generation-skipping transfer tax
purposes as the value of the transferred property taxable by all other states
bears to the value of the gross generation-skipping transfer for federal
generation-skipping transfer tax purposes. In any case in which a tax is imposed
on a generation-skipping transfer by this State and by one or more other states,
the commission shall negotiate with the taxing authorities of the other state or
states so that the aggregate amount of taxes imposed by this State and the other
state or states on a generation-skipping transfer does not exceed one hundred
percent of the maximum amount allowable as credit for state generation-skipping
transfer taxes under Internal Revenue Code Section 2604.
Section 12-16-730. (A) Every person required to file a return reporting a
generation-skipping transfer under applicable federal statutes and regulations
shall file a return with the commission on or before the last day prescribed for
filing the federal return. For purposes of this article the requirements for
filing a return are satisfied by filing a duplicate copy of the federal return.
(B) The tax imposed by this section is due upon a taxable distribution or
taxable termination as determined under applicable provisions of the federal
generation-skipping transfer tax. The person liable for payment of the federal
generation-skipping transfer tax is liable for the tax imposed by this article.
The tax must be paid to the commission on or before the last day allowed for
filing a return hereunder. Interest computed as provided in Section 12-54-20
accrues on the amount of unpaid tax from the day after the last day until the
date of payment.
Section 12-16-740. If, after the filing of a duplicate federal
generation-skipping tax return, the Internal Revenue Service increases or
decreases the amount of the federal generation-skipping transfer tax, an amended
return must be filed with the commission showing all changes made in the original
return and the amount of increase or decrease in the federal generation-skipping
transfer tax.
If, based upon the deficiency and the ground therefor, it appears that the
amount of tax previously paid this State is less than the amount of tax owing,
the difference together with
interest, as computed under Section 12-54-20, must be paid upon notice and demand
by the commission. If the person required to file a return and pay the tax fails
to file the return required by this section, any additional tax which is owing
may be assessed, or a proceeding in court for the tax may be begun without
assessment, at any time prior to the filing of the return or within thirty days
after the delinquent filing of the return.
Article 9
Recapture Tax on Certain Use-Valuations
Section 12-16-910. (A) When the gross estate of a decedent at the date of death
is a value requiring filing a federal estate tax return and the estate contains
certain farm or business real property which qualified for valuation under
Internal Revenue Code Section 2032A for the tax imposed under this chapter, a
copy of the election made at the time of filing the federal estate tax return
must be attached to the South Carolina estate tax return when filed. The return
shall also include an agreement signed by each person in being having an
interest, whether or not in possession, in the property and consent to the
application of Internal Revenue Code Section 2032A.
(B) If, within ten years after the decedent's death and before the death of the
qualified heir, as defined in Internal Revenue Code Section 2032A(e)(1), a
qualified heir disposes of any interest in the property, other than to a member
of his family, as defined in subsection (e)(2) of the section, or ceases to use
the property for qualified uses as defined in subsection (b)(2) of the section,
there is imposed an additional South Carolina estate tax, computed as provided
in Internal Revenue Code Section 2032A(c).
Section 12-16-920. The qualified heir is personally liable for the additional
tax imposed under this article. The amount of the adjusted tax difference
attributable to an interest in any qualified property, computed in the same
manner as provided in Internal Revenue Code Section 2032A(c)(2)(C) is a lien on
the interest in the property in favor of this State. The lien arises at the time
the election is filed hereunder and continues until:
(1) the liability for tax under this article attributable to the interest
has been satisfied or has become unenforceable by lapse of time; or
(2) it is established to the satisfaction of the commission that no further
tax liability attributable to the interest may arise under this article.
Section 12-16-930. Any qualified heir is required to notify the commission,
on a form prescribed by the commission, of any disposition or change in use of
the property and pay any additional South Carolina estate tax resulting from the
disposition or change, within six months of the disposition or change. Any tax
imposed under this article may be assessed until the expiration of three years
from the date of the notification.
Article 11
Returns and Payment of Tax
Section 12-16-1110. (A) The tax imposed under this chapter is due and payable
no later than nine months from the date of the decedent's death and is payable
to the commission at its office in Columbia.
(B) The personal representative of every estate subject to the tax imposed by
this chapter who is required by the laws of the United States to file a federal
estate tax return shall file with the Tax Commission, on or before the date the
federal estate tax return is required to be filed: (1) a return for the tax due
under this chapter; and (2) a copy of the federal estate tax return.
(C) In addition to the provisions of Section 12-54-70, if the personal
representative has obtained an extension of time for filing the federal estate
tax return, the filing required by subsection (B) is similarly extended until the
end of the time period granted in the extension of time for the federal estate
tax return. Upon obtaining an extension of time for filing the federal estate
tax return, the personal representative shall provide the commission with a copy
of the instrument providing for this extension.
(D) Except as provided in Section 12-16-910, the tax due under this chapter
must be paid by the personal representative to the Tax Commission at its office
in Columbia not later than the date when the return covering this tax is required
to be filed under subsection (B) or (C). If the tax is paid pursuant to
subsection (C), interest, at a rate equal to the rate of interest established
pursuant to Section 12-54-20, must be added for the period between the date when
the tax would have been due had no extension been granted and the date of full
payment.
Section 12-16-1120. (A) If the personal representative files an amended
federal estate tax return, he shall immediately file with the commission an
amended return covering the tax imposed by this chapter, accompanying the same
with a copy of the amended federal estate tax return. If the personal
representative is required to pay an additional tax under this chapter pursuant
to the amended return, he shall pay the tax, together with interest as provided
in Section 12-54-20, at the time of filing the amended return.
(B) If, upon final determination of the federal estate tax due, a deficiency
is assessed, the personal representative shall, within sixty days after this
determination, give written notice of the deficiency to the commission. If any
additional tax is due under this chapter by reason of this determination, the
personal representative shall pay the additional tax, together with interest as
provided in Section 12-54-20, at the same time he files the notice.
(C) The limitations on assessment of taxes provided in this chapter do not
expire any earlier than ninety days after the personal representative provides
the commission with the notice required in subsection (B).
Section 12-16-1130. Upon receipt of notice and demand from the commission as
provided in Section 12-16-1360 there must be paid at the time and place stated
in the notice the amount of any tax, including any interest and assessable
penalties stated in the notice and demand.
Section 12-16-1140. The commission may extend the time for the payment of the
amount of tax required by this chapter for a reasonable period not to exceed
twelve months. If the commission finds that the payment on the due date of any
part of the amount determined by the executor as the tax imposed by this chapter
would result in undue hardship to the estate, it may extend the time for payment
for a reasonable period not in excess of five years from the date prescribed by
Section 12-16-1110.
Section 12-16-1150. The tax and interest imposed by this chapter must be paid
by the personal representative. If any personal representative distributes
either in whole or in part any of the property of an estate to the heirs, next
of kin, distributees, legatees, or devisees without having paid or secured the
tax due pursuant to this chapter, he is personally liable for the tax so due, or
so much thereof as may remain due and unpaid, to the full extent of any property
belonging to the deceased person or estate which may come into the personal
representative's custody or control.
Section 12-16-1160. A resident personal representative holding personal
property of a deceased nonresident subject to the tax shall deduct the tax or
collect it from the personal representative in the state of the decedent's
domicile and shall not deliver the property to him or any other person until he
has collected the tax and paid the same to the commission. When the transfer of
the personal property is subject to a tax under the provisions of this chapter
and the personal representative in the state of domicile neglects or refuses to
pay the tax upon demand or if for any reason the tax is not paid within nine
months after the decedent's death, the resident personal representative may
petition the probate court where the resident personal representative qualified
may direct, for authority to sell the property or, if the same can be divided,
the portion as may be necessary. He shall then deduct the tax from the proceeds
of such sale and account for the balance, if any, in lieu of the property.
Section 12-16-1170. The commission may require any personal representative to
show the property of the decedent to the commission or its representative upon
demand and may employ a suitable person to appraise the property. The personal
representative shall make and subscribe his oath that the property shown on the
inventory and appraisal filed by him in the probate court includes all the
property, both real and personal, of the decedent that has come to his knowledge
or into his possession. The appraiser shall prepare an inventory of the
property, shall appraise it at its fair market value at the time of the
decedent's death, and shall return the inventory and appraisal to the commission.
Section 12-16-1180. At any time after the expiration of the time required by
this chapter for the filing of any return required therein the commission may
require the personal representative or any person or corporation interested in
the succession to appear at the office of the commission at a time the commission
designates and produce for the use of the commission in determining whether or
not the estate is subject to tax and the amount of tax, if any, all books,
papers, or securities which may be within the possession or within the control
of the personal representative or beneficiary relating to estate or tax and to
furnish other information relating to the same as he may be able and the
commission may require.
Section 12-16-1190. Whenever any person summoned under the provisions of this
chapter neglects or refuses to obey the summons as required, the commission may
apply to any circuit judge of the State for an attachment against him for
contempt. The judge shall hear the application and, if satisfactory proof is
made, issue an attachment directed to the sheriff of the county in which the
person resides for the arrest of the person and upon his being brought before him
shall proceed to a hearing of the case. At the hearing the judge may make an
appropriate order not inconsistent with existing laws for the punishment of
contempt, to enforce
obedience to the requirements of the summons, and to punish the person for his
default or disobedience.
Section 12-16-1200. In case of the refusal or neglect of any person summoned
under the provisions of this chapter by the commission to appear before it and
produce books, papers, or securities, the commission may apply to any justice of
the Supreme Court or circuit judge or to the judge of the county court for
Richland County for a mandamus to compel obedience to the summons and the hearing
thereon may be had in Richland County or any other convenient county.
Section 12-16-1210. If a foreign executor, administrator, or trustee assigns
or transfers any stock or obligations in this State standing in the name of a
decedent or in trust for a decedent, liable to tax under this chapter, the tax
must be paid to the commission on transfer.
Section 12-16-1220. The probate judge shall send to the commission by mail a
copy of the inventory and appraisal of the assets of every estate the gross
assets of which for probated purposes are equal to or exceed the sum of six
hundred thousand dollars within thirty days after it is filed, together with a
copy of any will probated with respect to the estate. In the case of a
nonresident decedent, the probate judge shall furnish the commission with copies
of all wills filed with his office and, in the case of an ancillary
administration, the probate judge shall furnish the commission with copies of
inventories and appraisals in all cases regardless of the value of the tangible
personal property and real property having a situs in this State.
Article 13
Assessment and Collection
Section 12-16-1310. The commission shall make assessment of all taxes,
including interest and assessable penalties, imposed by this chapter, or accruing
under the former estate tax laws, including taxes due in respect to those estates
for which returns have not been filed at the time and in the manner provided by
law. This authority includes also the assessment by the commission of all taxes
determined by the personal representative as to which a return has been filed
under this chapter.
Section 12-16-1320. The assessment must be made
by recording the amount of the tax in the office of the commission in accordance
with rules prescribed by the commission. Upon request of the personal
representative, the commission shall furnish him a copy of the record of
assessment.
Section 12-16-1330. If the commission determines that there is a deficiency
in respect of the tax imposed by this chapter, it is authorized to send notice
of the deficiency to the personal representative. The notice must be sent by
certified or registered mail to him at his last known address. The notice shall
reasonably appraise the personal representative of the grounds for the proposed
deficiency.
Section 12-16-1340. (A) Within ninety days after the notice of deficiency
authorized in Section 12-16-1330 is mailed, not counting Saturday, Sunday, or a
legal holiday as the last day, the personal representative may file a petition
with the circuit court for the circuit in which the estate is being administered
or with the court of common pleas for Richland County for a redetermination of
the deficiency.
No assessment of a deficiency in respect of the tax imposed by this chapter and
no levy or proceeding in court for its collection may be made, begun, or
prosecuted until the notice has been mailed to the taxpayer, nor until the
expiration of the ninety-day period, nor, if a petition has been filed with the
circuit court, until the decision of the circuit court is final.
(B) If the personal representative is notified that, on account of a
mathematical error appearing upon the return, an amount of tax in excess of that
shown on the return is due, and that an assessment of the tax has been or will
be made on the basis of what would have been the correct amount of tax but for
the mathematical error, the notice is not considered as a notice of deficiency
for purposes of subsection (A), and the personal representative does not have any
right to file a petition with the circuit court based on the notice, nor may the
assessment or collection be prohibited by the provisions of subsection (A) of
this section.
(C) The commission may by regulations promulgated pursuant to Section
12-16-1320 provide for the making of assessments (1) where the executor in
writing has waived the restrictions on assessment and collection prescribed in
subsection (A), and (2) where the executor has made any payment as a tax or in
respect of any tax.
(D) The petition filed with the circuit court pursuant to subsection (A) must
be accompanied by a detailed statement of each particular which is to be reviewed
and no item may be considered or reviewed if not specifically set forth in the
detailed statement. A copy of the petition must be served upon the commission
within the ninety-day period provided in subsection (A) and upon all other
parties in interest within a reasonable time thereafter. The appeal must be
determined by the circuit court, either in open court or at chambers, upon
testimony before the court or taken before a referee appointed by the court for
that purpose. The costs must be taxed as in equity causes in this State.
(E) The commission shall as soon as practicable, and within sixty days, after
the making of an assessment of a tax pursuant to Section 12-16-1320, give notice
to each person liable for the unpaid tax, stating the amount and demanding
payment thereof. The notice must be left at the dwelling or usual place of
business of the person or may be sent by mail to the person's last known address.
Except where the commission believes collections would be jeopardized by delay,
if any tax is assessed prior to the last date prescribed for payment of the tax,
payment of the tax may not be demanded as provided above until after such date.
Section 12-16-1350. Where the assessment of the tax imposed by this chapter
has been made within the period of limitation properly applicable thereto, the
tax may be collected by levy or by a proceeding in court, but only if the levy
is made or the proceeding begun within six years after the assessment of the tax.
Section 12-16-1360. The running of the period of limitations for collection
of any tax imposed by this chapter is suspended for a period of any extension of
time for payment granted under the provisions of Section 12-16-1140.
Section 12-16-1370. The commission shall give receipts for all sums collected
by it.
Article 15
Nonpayment of Tax, Lien for Unpaid Taxes,
Certificate of Release from Lien
Section 12-16-1510. (A) A lien arises automatically upon the death of the
decedent upon all property, real or personal, located in this State of every
decedent having a taxable estate who fails to pay the tax imposed by this
chapter. Except as provided in Section 12-16-910, the lien once it attaches is
enforceable for a period not to exceed ten years from the date of death of the
decedent.
(B) That part of the property of a decedent subject to the lien provided under
subsection (A) is divested of the lien to the extent it is used for payment of
charges against the estate or expenses of its administration allowed by the court
having jurisdiction thereof.
(C) That part of the personal property of a decedent subject to the lien
provided under subsection (A) is divested of the lien upon the conveyance or
transfer of the property to a purchaser or holder of a security interest for an
adequate and full consideration and the lien shall then attach to the proceeds
received for the property from the purchaser or holder of a security interest.
Real property is not divested of the lien except as provided in subsections (B)
and (D) of this section.
(D) When any lien under this section has attached and the commission is
satisfied that the tax liability, if any, of the estate has been fully
discharged, the commission shall issue a certificate releasing all property of
the estate from the lien; or, if the commission is satisfied that the tax
liability of the estate has been provided for, it shall issue a certificate
releasing any surplus property of the estate from the lien.
Section 12-16-1520. Ten days' notice must be served upon the commission prior
to the transfer or delivery by any financial institution, corporation, person,
or other institution of securities, deposits, or other assets, including shares
of capital stock or other interest in the above institutions or corporations,
which belong to or stand in the name of any other persons to the executors,
administrators, or legal representatives of the decedent or to his survivors when
held in the joint name of the decedent and one or more other persons upon their
order or request. However, the ten-day notice period may be waived upon written
consent of the commission. Prior to the expiration of the ten-day period, the
commission may require the portion of the property to be transferred for purposes
of paying any taxes and interest subsequently due upon the property as imposed
by this chapter.
Notwithstanding the provisions of this section:
(1) Any portion of a checking or savings account up to ten thousand dollars
may be transferred upon notification to the commission of the intent to transfer
without its written consent and without regard to the ten-day notice period. Any
amount so withdrawn must be included in the gross estate of the decedent if
otherwise includable therein as provided by law.
(2) This notice is also not required for the transfer of stocks, bonds, notes,
mortgages, dividends, interest, wages, or salaries of a nonresident decedent
unless the transferee has actual knowledge that a decedent was a resident of this
State or that the assets have an actual business situs in this State. The
exemption from notice for nonresidents does not apply to bank accounts, bank
boxes, certificates of deposit, safe-deposit boxes, insurance proceeds, or real
estate.
Section 12-16-1530. The commission, personally or by representatives, may
examine such securities, deposits, or assets at the time of the delivery or
transfer. Failure to serve the notice required by Section 12-16-1520, to allow
the examination, or to retain a sufficient portion or amount to pay the tax and
interest, as provided in this article, renders the safe-deposit company, trust
company, corporation, bank, or other institution or person liable to the payment
of the amount of the tax and interest due or thereafter to become due upon the
securities, deposits, or other assets, including the shares of the capital stock
of or other interest in the safe-deposit company, trust company, corporation,
bank, or other institution making the delivery or transfer, and in addition
thereto a penalty of one thousand dollars. The payment of the tax and interest
thereon or of the penalty above described, or both, may be enforced in an action
brought by the commission in any court of competent jurisdiction. The
commission, upon good cause shown, may, in its discretion, remit the penalty in
whole or in part.
Article 17
Enforcement and Liabilities
Section 12-16-1710. For the purposes of this chapter, the term 'deficiency'
means the amount by which the tax imposed by this chapter exceeds:
(1) the sum of:
(a) the amount shown as the tax by the taxpayer upon his return, if a return
was made by the taxpayer and an amount was shown as the tax by the taxpayer
thereon, plus
(b) the amounts previously assessed (or collected without assessment) as a
deficiency, over
(2) the amount of any credits allowable with respect thereto.
Section 12-16-1720. The term 'executor', wherever it is used in this chapter
in connection with the estate tax imposed by this chapter, means the executor,
administrator, or personal representative of the estate of the decedent, or, if
there is no executor, administrator, or personal representative appointed,
qualified, and acting within this State, then any person in actual or
constructive possession of any property of the decedent.
Section 12-16-1730. The probate court may authorize executors, administrators,
personal representatives, and trustees to sell the real estate of a decedent for
the payment of the tax in the same manner in which it may authorize them to sell
real estate for the payment of debts.
Section 12-16-1740. The commission may appear in any proceeding in any court
in which the decree may in any way affect the tax and no decree in any such
proceeding or appeal therefrom shall be binding upon the State unless personal
notice of such proceeding shall have been given to the commission.
Section 12-16-1750. Whenever the commission in any action instituted by it
recovers taxes under the provisions of this chapter, the amount of the judgment
so recovered must be paid to the commission and the commission shall turn over
to the State Treasurer all of the taxes after paying the costs, disbursements,
and expenses of the suit. The commission shall issue executions for any taxes
which remain unpaid for a period of ninety days.
Article 19
Miscellaneous Provisions
Section 12-16-1910. For purposes of this chapter, if a person as defined in
Section 2-801 of the South Carolina Probate Code makes a disclaimer as provided
in Internal Revenue Code Section 2518 with respect to any interest in property,
this chapter applies as if the interest had never been transferred to the person.
Section 12-16-1920. The commission may prescribe forms, make rules, and
promulgate regulations as necessary to implement and administer this chapter.
Section 12-16-1930. Except in accordance with proper judicial order or as
otherwise provided by law, it is unlawful for the members of the commission, any
deputy, agent, clerk, or other officer or employee, or former employees or
officers to divulge or make known in any manner the report or return or any
particulars set forth or disclosed in any report or return, as completed in
connection with the administration and enforcement of this chapter. The
provisions of this section apply to all reports and returns filed before or after
enactment of this section.
Nothing in this section prohibits the publication
of statistics, so classified as to prevent the identification of particular
reports or returns and the items thereof, or the inspection by the Attorney
General or other legal representative of the State, of the report or return upon
an application for review of any adjustment proposed by the commission or upon
the filing of a petition for redetermination of a deficiency assessed by the
commission, or against whom an action or proceeding has been instituted to
recover any tax or penalty imposed by this chapter. Nothing herein precludes the
disclosure of deficiency assessments to the probate courts and the filing of
warrants for uncollected taxes.
Any person who violates the provisions of this section is guilty of a
misdemeanor and, upon conviction, must be imprisoned for not more than one year
or fined not more than one thousand dollars, or both. If the offender is an
employee or officer of this State, he is dismissed from office and may not hold
any public office in this State for five years thereafter.
Section 12-16-1940. Notwithstanding the provisions of Section 12-16-1930, the
commission may permit the commissioner of Internal Revenue of the United States,
the proper officer of any state imposing taxes similar to those imposed by this
chapter, or the authorized representative of either such officer to inspect tax
returns of any taxpayer or may furnish to the officer or his authorized
representative an abstract of the tax return of any taxpayer or supply him with
information concerning any item contained in any tax return or disclosed by the
report of any investigation of the tax return of any taxpayer.
Permission is granted or the information furnished to the officer or his
representative only if the statutes of the United States or of the other state
grant substantially similar privileges to the proper officer of this State
charged with the administration of this chapter.
Section 12-16-1950. (A) If upon the death of a decedent leaving an estate, a
will disposing of the estate is not offered for probate and a personal
representative is not appointed within four months after death, the proper
probate court, upon application by the commission, shall appoint an
administrator. If it comes to the knowledge of a probate judge that any person
within his jurisdiction has died leaving an estate upon which no application has
been made for appointment as a personal representative or no will offered for
probate or letters testamentary issued, he shall, immediately after the lapse of
four months from the death of the decedent, notify the commission thereof
together with his opinion as to whether or not any part of the estate is likely
to be taxable.
(B) In the absence of administration in this State upon the estate of a
nonresident, the commission may, at the request of a personal representative duly
appointed and qualified in the state of the decedent's domicile or at the request
of a devisee, legatee, distributee, or grantee under a conveyance made during the
grantor's lifetime, and upon satisfactory evidence furnished it by the personal
representative, devisee, legatee, distributee, or grantee, or otherwise,
determine whether or not any part of the estate of the decedent within this State
is subject to tax under the provisions of this chapter and may apply to the
proper probate court for the appointment of a personal representative in this
State as provided in subsection (A).
Section 12-16-1960. When a personal representative or a trustee is empowered
under the will or trust of a decedent to satisfy a pecuniary bequest, devise, or
transfer in trust, in kind with assets at their value for federal estate tax
purposes, the fiduciary, in order to implement the bequest, devise, or transfer
in trust, shall, unless the governing instrument provides otherwise, distribute
assets, including cash, fairly representative of appreciation or depreciation in
the value of all property thus available for distribution in satisfaction of the
pecuniary bequest, devise, or transfer.
Section 12-16-1970. The provisions of Sections 12-16-1960 to 12-16-1980 are not
intended to change the present laws applicable to fiduciaries, but are statements
of the fiduciary principles applicable to the fiduciaries and are declaratory of
such laws.
Section 12-16-1980. Personal representatives may enter into agreements with
beneficiaries and with governmental authorities, agreeing to make distribution
in accordance with the terms of Sections 12-16-1960 to 12-16-1980 for any purpose
which they consider to be in the best interests of the estate, including the
purpose of protecting and preserving the federal estate tax marital deduction as
applicable to the estate, and the representative of a deceased beneficiary may
enter into agreements for and on behalf of the beneficiary or deceased
beneficiary.
Section 12-16-1990. The commission shall prescribe all forms, books, and
blanks for the use of the probate judges necessary for the administration of this
chapter, which must be provided at the expense of the several counties, and the
commission shall mail notice to the probate judge of each form, book, or blank
required to be used thirty days before the use thereof is required.
Section 12-16-2000. No final account of a personal representative in any
probate proceeding who is required to file a federal estate tax return is allowed
and approved by the court before whom the proceeding is pending unless the court
finds that the tax imposed on the property by this chapter, including applicable
interest, has been paid in full or that no such tax is due."
Exemption increased
SECTION 2. Section 12-15-61 of the 1976 Code is amended to read:
"Section 12-15-61. For the purposes of the tax imposed by
Section 12-15-10, the value of the taxable estate is determined by deducting from
the value of the gross estate an exemption in addition to the deductions and
exemptions allowed in Section 12-15-60, as follows:
(1) one hundred twenty thousand dollars;
(2) for decedents dying after June 30, 1988, and before July 1, 1989, one
hundred forty thousand dollars;
(3) for decedents dying after June 30, 1989, and before July 1, 1990, one
hundred seventy thousand dollars;
(4) for decedents dying after June 30, 1990, three hundred twenty thousand
dollars."
Exemption increased
SECTION 3. Section 12-15-251 of the 1976 Code is amended to read:
"Section 12-15-251. For purposes of the tax imposed by Section 12-15-210,
the value of the taxable estate is determined by deducting from the value of the
gross estate an exemption in addition to the deductions and exemptions allowed
in Section 12-15-250, as follows:
(1) one hundred twenty thousand dollars;
(2) for decedents dying after June 30, 1988, and before July 1, 1989, one
hundred forty thousand dollars;
(3) for decedents dying after June 30, 1989, and before July 1, 1990, one
hundred seventy thousand dollars;
(4) for decedents dying after June 30, 1990, three hundred twenty thousand
dollars."
Copy forwarded
SECTION 4. Section 12-15-550 of the 1976 Code is amended to read:
"Section 12-15-550. The probate judge shall send to the commission by
mail a copy of the inventory and appraisal of the assets of every estate the
gross assets of which for probated purposes are equal to or exceed the sum of the
amounts exempted pursuant to Sections 12-15-61 and 12-15-251 within thirty days
after it is filed, together with a copy of any will probated with respect to the
estate. In the case of a nonresident decedent, the probate judge shall furnish
the Tax Commission with copies of all wills filed with his office and, in the
case of an ancillary administration, the probate judge shall furnish the Tax
Commission with copies of inventories and appraisals in all cases regardless of
the value of the tangible personal property and real property having a situs in
this State."
Presumption revised
SECTION 5. Section 12-49-70 of the 1976 Code is amended to read:
"Section 12-49-70. Except as provided in Article 7 of Chapter 16 of this
title, all taxes levied or becoming due under the laws of this State are
conclusively presumed paid after ten years from the last date taxes could have
been paid without penalty. This section does not apply to taxes for the
collection of which the State institutes judicial proceedings within the time
limit above.
Except as to the conclusive presumption after ten years of payment of taxes by
taxpayers as provided in this section, this section does not affect or impair the
operation of Sections 12-45-380, 12-55-20, and 12-59-330."
Reference updated
SECTION 6. Section 12-54-70(c) of the 1976 Code is amended to read:
"(c) Provisions regarding prepayment of ninety percent of the estimated
liability do not apply to persons filing monthly reports. For monthly filers,
no extension may be granted for more than one additional month beyond the due
date. The time and payment requirements of this section do not apply for estate
tax purposes if a hardship extension is granted under Section 12-16-1140; but
interest must be calculated on any outstanding amount until completely
paid."
Reference updated
SECTION 7. Section 2-801(a) of the South Carolina Probate Code is amended to
read:
"(a) In addition to any methods available under existing law, statutory
or otherwise, if a person (or his executor, administrator, successor, personal
representative, special administrator, guardian, attorney-in-fact, trustee,
committee, conservator, or his other fiduciary or agent who performs
substantially similar functions under the law governing his status, acting with
or without the approval of a specific court order and with or without the receipt
of consideration for the act), as a disclaimant, makes a disclaimer as defined
in Section 12-16-1910 of the 1976 Code, with respect to any transferor's transfer
(including tranfers by any means whatsoever, lifetime and testamentary, voluntary
and by operation of law, initial and successive, by grant, gift, trust, contract,
intestacy, wrongful death, elective share, forced share, homestead allowance,
exempt property allowance, devise, bequest, beneficiary designation, survivorship
provision, exercise and nonexercise of a power, and otherwise) to him of any
interest in, including any power with respect to, property, or any undivided
portion thereof, the interest, or such portion, is considered never to have been
transferred to the disclaimant."
Period of assessment and collection
SECTION 8. Notwithstanding the provisions of Section 9 of this act, nothing
prevents the assessment and collection of taxes levied under Chapter 15 of Title
12 of the 1976 Code until the expiration of the period of limitations on
assessment and collection applicable under that chapter.
Code sections repealed
SECTION 9. Chapter 15 of Title 12 of the 1976 Code is repealed with respect to
decedents dying after June 30, 1991, except for Section 12-15-420 therein, which
is repealed with respect to transfers after March 21, 1980, and Sections
12-15-1540 and 12-15-1550, which are repealed effective July 1, 1987. Chapter
17 of Title 12 of the 1976 Code is repealed with respect to gifts made after
December 31, 1991.
Code section effective
SECTION 10. Chapter 16 of Title 12 of the 1976 Code added by this act is
effective with respect to decedents dying after June 30, 1991, except for Article
7 therein, which is effective for transfers occurring after October 22, 1986, and
Articles 3 and 9, which are effective upon approval by the Governor. Section 6
of this act is effective July 1, 1991. Section 7 of this act is effective
January 1, 1992.
Time effective
SECTION 11. This act takes effect upon approval by the Governor. |