S 836 Session 110 (1993-1994)
S 0836 General Bill, By Passailaigue, Elliott, Giese, Leventis, McConnell,
Mescher, Rankin, L.E. Richter and Washington
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Chapter 12
in Title 12, relating to taxation, by enacting the Economic Impact Zone
Community Development Act of 1993, so as to provide tax incentives for
business and economic development in areas affected by military base closures
or realignments.
06/25/93 Senate Introduced and read first time SJ-13
06/25/93 Senate Referred to Committee on Finance SJ-13
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING CHAPTER 12 IN TITLE 12, RELATING TO
TAXATION, BY ENACTING THE ECONOMIC IMPACT ZONE
COMMUNITY DEVELOPMENT ACT OF 1993, SO AS TO
PROVIDE TAX INCENTIVES FOR BUSINESS AND ECONOMIC
DEVELOPMENT IN AREAS AFFECTED BY MILITARY BASE
CLOSURES OR REALIGNMENTS.
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 12
Economic Impact Zone Community
Development Act of 1993
Section 12-12-10. This chapter may be cited as the Economic
Impact Zone Community Development Act of 1993.
Section 12-12-20. It is the purpose of this chapter to establish a
program of providing tax incentives for the creation of economic impact
zones in order:
(1) to revitalize economically and physically distressed areas
impacted as a result of the closing or realignment of a federal military
installation area, primarily by encouraging the formation of new
businesses and the retention and expansion of existing businesses; (2) to promote meaningful employment for economic impact zone
residents; and
(3) to encourage individuals to reside in the economic impact zones
in which they are employed.
Section 12-12-30. For purposes of this chapter, `economic impact
zone' means a county or municipality, any portion of which is located
within fifty miles of the boundaries of an applicable federal military
installation, and any area not otherwise included as part of the economic
impact zone if the Department of Commerce determines the area to be
adversely impacted by the closing or realignment of an applicable
federal military installation which is closed or realigned under:
(1) the Defense Base Closure and Realignment Act of 1990;
(2) Title II of the Defense Authorization Amendments and Base
Closure and Realignment Act; or
(3) Section 2687 of Title 10, United States Code.
Section 12-12-40. (A) A designation of an area as an economic
impact zone remains in effect during the period beginning on the date of
the designation and ending on the earlier of:
(1) December thirty-first of the fifteenth calendar year following
the calendar year in which the designation occurs, or
(2) a termination date designated by legislative enactment of the
General Asembly.
(B) A designation may be revoked by the General Assembly only
after a hearing on the record in which officials of the county or
municipality involved may participate.
Section 12-12-45. A taxpayer is allowed a nonrefundable credit
against the tax imposed pursuant to Chapter 7 of this title equal to five
percent of `qualified zone wages' paid in a taxable year as defined in
Section 12-12-50.
Section 12-12-50. As used in this chapter:
(1) (a) `qualified zone wages' means any wages paid or incurred
by an employer for services performed by an employee while the
employee is a qualified zone employee.
(b) with respect to each qualified zone employee, the amount of
qualified zone wages which may be taken into account for the taxable
year may not exceed seven thousand dollars.
(2) Except as otherwise provided in this chapter, `qualified zone
employee' means, with respect to any period, any employee of an
employer if:
(a) substantially all of the services performed during the period
by such employee for such employer are performed within an economic
impact zone in a trade or business of the employer, and
(b) the principal place of abode of such employee while
performing such services is within the tax economic impact zone.
(3) The term `qualified zone employee' does not include:
(a) a five percent owner, or
(b) an individual employed by the employer in a trade or business
the principal activity of which is farming as defined in this chapter.
(c) if the employment of any employee is terminated by the
taxpayer before the day one year after the day on which such employee
began work for the employer, no wages with respect to such employee
may be taken into account under Section 12-12-45 for the taxable year
in which such employment is terminated;
(d) This item does not apply to:
(i) voluntary termination of employment or
(ii) a termination of employment of an individual who before
the close of the period referred to in subitem (c) becomes disabled to
perform the services of such employment unless such disability is
removed before the close of such period and the taxpayer fails to offer
reemployment to such individual; or
(iii) a termination of employment of an individual if it is
determined under state unemployment compensation law that the
termination was due to the misconduct of such individual.
(iv) for purposes of this subitem (c), the employment
relationship between the taxpayer and an employee is not treated as
terminated by a transaction to which Section 381(a) of the Internal
Revenue Code of 1986 applies if the employee continues to be employed
by the acquiring corporation, or by reason of a mere change in the form
of conducting the trade or business of the taxpayer if the employee
continues to be employed in such trade or business and the taxpayer
retains a substantial interest in such trade or business.
Section 12-12-60. (A) In the case of a qualified zone employee
who received qualified zone wages during the taxable year from any
tax-exempt employer, there is allowed as a nonfundable credit against
the tax imposed pursuant to Chapter 7 of this title for such taxable year
an amount equal to five percent of the qualified zone wages received by
such employee from such employer during such taxable year.
(B) With respect to each qualified zone employee, the amount of
qualified zone wages which may be taken into account for the taxable
year may not exceed seven thousand dollars.
(C) For purposes of this chapter, the term `tax exempt employer'
means any employer who is exempt from tax under Chapter 7 of this
title. The term shall not include the federal government, the state, or a
local government or political subdivision thereof, or any agency or
instrumentality of any of the foregoing.
Section 12-12-70. (A) In the case of an individual, there is allowed
as a deduction against South Carolina taxable income an amount equal
to twenty percent of the aggregate amount paid in cash by the taxpayer
during the taxable year for the purchase of enterprise zone stock.
(B)(1) The maximum amount allowed as a deduction under
subsection (A) to a taxpayer for the taxable year may not exceed the
lesser of:
(a) ten thousand dollars; or
(b) the excess of one hundred thousand dollars over the amount
allowed as a deduction under this section to the taxpayer for all prior
taxable years.
(2) If the amount otherwise deductible by the person under
subsection (A) exceeds the limitation under subsection (B)(1)(a):
(a) the amount of such excess is treated as an amount paid to
which subsection (A) applies during the next taxable year; and
(b) the deduction allowed for any taxable year must be
allocated proportionately among the economic impact zone stock
purchased by the person on the basis of the respective purchase prices
a share.
(3) The taxpayer and members of the taxpayer's family are treated
as one person for purposes of subitem (1), and the limitations contained
in such subitem must be allocated among the taxpayer and such
members in accordance with their respective purchases of economic
impact zone stock. For purposes of this section, an individual's family
includes only such individual's spouse and minor children.
(C) For purposes of this section:
(1) the term `economic impact zone stock' means stock of a
corporation if:
(a) such stock is acquired on original issue from the
corporation; and
(b) such corporation is, at the time of issue, a qualified
enterprise zone issuer.
(2)(a) Such term shall include such stock only to the extent that
the proceeds of such issuance are used by such issuer during the
twelve-month period beginning on the date of issuance to purchase
qualified economic impact zone property.
(b) For purposes of this section, the term `qualified economic
impact zone property' means property to which Section 168 of the
Internal Revenue Code of 1986 applies:
(i) the original use of which in an economic impact zone
commences with the issuer; and
(ii) substantially all of the use of which is in an economic
impact zone.
(3) The term `economic impact zone stock' does not include any
stock acquired from a corporation which made a substantial stock
redemption or distribution (without a bona fide business purpose
therefor) in an attempt to avoid the purposes of this section.
(D) For purposes of this section, the term `qualified economic impact
zone issuer' means any domestic `C' corporation if:
(1) such corporation is an economic impact zone business or, in
the case of a new corporation, such corporation is being organized for
purposes of being an economic impact zone business;
(2) such corporation does not have more than one class of stock;
(3) the sum of:
(a) the money;
(b) the aggregate adjusted bases of property owned by such
corporation; and
(c) the value of property leased to the corporation (as
determined under regulations prescribed by the Department of Revenue
and Taxation), does not exceed five million dollars; and
(4) more than twenty percent of the total voting power, and
twenty percent of the total value, of the stock of such corporation is
owned directly by individuals or estates or indirectly by individuals
through partnerships or trusts. The determination under subsection (3)
must be made as of the time of issuance of the stock in question but shall
include amounts received for such stock.
(E)(1) For purposes of this section, the basis of any economic impact
zone stock must be reduced by the amount of the deduction allowed
under this section with respect to the stock in the manner prescribed by
the Department of Revenue and Taxation.
(F)(1) If, during the ten-year period beginning on the date economic
impact stock was purchased by the taxpayer, the issuer of such stock
ceases to be a qualified economic impact zone issuer the taxpayer must
be treated for purposes of subsection (E) as disposing of such stock (and
any other property the basis of which is determined in whole or in part
by reference to the adjusted basis of such stock) during the taxable year
during which such cessation occurs at its fair market value as of the first
day of such taxable year.
(2) A corporation does not fail to be treated as a qualified
enterprise zone issuer for purposes of subsection (1) solely by reason of
the termination or revocation of an economic enterprise zone
designation.
(G)(1) In the case of a partnership or an `S' corporation, the
limitations under subsection (B) apply at the partner and shareholder
level and do not apply at the partnership or corporation level.
(2) Estates and trusts are not treated as individuals for purposes
of this section.
Section 12-12-80. (A) At the election of an individual, qualified
capital gain from the sale or exchange of a qualified economic impact
zone asset is includable in South Carolina taxable income only to the
extent that the amount realized from such sale or exchange, exceeds the
cost (not heretofore taken into account under this subsection) of any
qualified zone asset purchased directly by the taxpayer during the
reinvestment period.
(B) For purposes of this section:
(1) `qualified economic impact zone asset' has the meaning given
that term by Section 12-12-120.
(2)(a) In the case of a sale or exchange of property, the
determination of whether the property is a qualified economic impact
zone asset must be made as of the time of the sale or exchange.
(b) In the case of a purchase of property, the determination of
whether such property is a qualified economic impact zone asset shall
be made as of the time of such purchase.
(C) For purposes of this section:
(1) `reinvestment period' means, with respect to any sale or
exchange, the six-month period beginning on the date of such sale or
exchange.
(2) `purchase' has the meaning given to such term by Section
179(d)(2) of the Internal Revenue Code of 1986.
(D)(1) If, during the ten year period beginning on the date any
qualified zone replacement asset was purchased by the taxpayer, such
asset ceases to be a qualified economic impact zone asset,
notwithstanding any provision of this chapter other than item (3) of this
subsection, the taxpayer shall be treated as disposing of such asset
during the taxable year during which such cessation occurs at its fair
market value as of the first day of such taxable year.
(2) The amount of gain recognized pursuant to item (1) with
respect to any asset may not exceed the lesser of:
(a) the amount of gain which was not recognized under
subsection (A) by the reason of the purchase of such asset; or
(b) the excess of the fair market value referred to in item (1)
over the adjusted basis of such asset.
(3) An asset shall not fail to be treated as a qualified zone asset
for purposes of item (1) solely by reason of the termination of an
economic impact zone designation.
(4) For purposes of item (1), the term `qualified economic impact
zone replacement asset' means any such asset the purchase of which
resulted in the nonrecognition of gain under subsection (A) with respect
to any other property.
(E) If gain from the sale or exchange of any property is not
recognized by reason of subsection (A), such gain must be applied to
reduce (in the order acquired) the basis of any qualified zone
replacement asset (as defined in subsection (D)(4) purchased during the
reinvestment period.
(F) This section does not apply to any gain from any installment sale
(as defined in Section 453(b) of the Internal Revenue Code of 1986) if
Section 453(a) of such code applies to the sale.
(G) If any gain is realized by the taxpayer on any sale or exchange
to which an election under this section applies, then:
(1) the statutory period for the assessment of any deficiency with
respect to such gain shall not expire before the expiration of three years
from the date the department is notified by the taxpayer (in such manner
as the department may prescribe) of:
(a) the taxpayer's cost of purchasing any qualified zone
replacement asset;
(b) the taxpayer's intention not to purchase qualified economic
impact zone replacement asset within the reinvestment period; or
(c) a failure to make such purchase within the reinvestment
period; and
(2) such deficiency may be assessed before the expiration of such
three-year period notwithstanding the provisions of any law or rule of
law which would otherwise prevent such assessment.
(H) For purposes of this section, the term `economic impact zone
business' has the meaning given such term by Section 12-12-120, except
that, in applying Section 12-12-120 for such purposes, the term
`qualified business' does not include any trade or business or producing
property of a character subject to the allowance for depletion under
Section 611 of the Internal Revenue Code of 1986.
Section 12-12-90. In the case of economic impact zone business
which has made a Section 179 election pursuant to the Internal Revenue
Code of 1986, there is allowed an additional deduction against South
Carolina taxable income equal to that amount of the asset cost which
exceeds ten thousand dollars, but this state deduction may not exceed ten
thousand dollars.
Section 12-12-100. (A) There is allowed as a credit against the tax
imposed pursuant to Chapter 7 of this title an economic impact zone
investment tax credit for any taxable year in an amount equal to five
percent of the aggregate bases of qualified zone manufacturing and other
productive equipment properties placed in service during such taxable
year in the economic impact zone.
(B) For purposes of this section:
(1) `economic impact zone qualified manufacturing and
productive equipment property' means any property:
(a) which is used as an integral part of manufacturing,
production, or extraction of or furnishing transportation,
communications, electrical energy, gas, water, or sewage disposal
services in the economic impact zone;
(b) which is tangible property to which Section 168 of the
Internal Revenue Code of 1986 applies;
(c) which is Section 1245 of the Internal Revenue Code of
1986 applies property (as defined in Section 1245(a)(3)); and
(d) (i) the construction, reconstruction, or erection of
which is completed by the taxpayer in the economic impact zone; or
(ii) which is acquired by the taxpayer if the original use of
such property commences with the taxpayer inside the economic impact
zone.
(2) In the case of any computer software which is used to control
or monitor a manufacturing or production process inside the economic
impact zone and with respect to which depreciation (or amortization in
lieu of depreciation) is allowable, such software shall be treated as
qualified manufacturing and productive equipment property.
(C) This section does not apply to any property to which the other
tax credits would apply unless the taxpayer elects to waive the
application of such credits to such property.
Section 12-12-110. (A) For purposes of this chapter, `economic
impact zone business' means:
(1) any qualified business entity; and
(2) any qualified proprietorship.
(B) For purposes of this chapter, `qualified business entity' means,
with respect to any taxable year, any corporation or partnership if for
such year:
(1)(a) every trade or business of such entity is the active conduct
of a qualified business within a tax economic impact zone; and
(b) at least eighty percent of the total gross income of such
entity is derived from the active conduct of such business;
(2) substantially all of the use of the tangible property of such
entity (whether owned or leased) is within a tax economic impact zone;
(3) substantially all of the intangible property of such entity is
used in, and exclusively related to, the active conduct of any such
business;
(4) substantially all of the services performed for such entity by
its employees are performed in a tax economic impact zone;
(5) at least one-third of its employees are residents of an
economic impact zone;
(6) less than five percent of the average of the aggregate
unadjusted bases of the property of such entity is attributable to
collectibles (as defined in Section 408(m)(2) of the Internal Revenue
Code of 1986) other than collectibles that are held primarily for sale to
customers in the ordinary course of such business; and
(7) less than five percent of the average of the aggregate
unadjusted bases of the property of such entity is attributable to
nonqualified financial property.
(C) For purposes of this chapter, the term `qualified proprietorship'
means, with respect to any taxable year, any qualified business carried
on by an individual as a proprietorship if for such year:
(1) at least eight percent of the total gross income of such
individual from such business is derived from the active conduct of such
business in an economic impact zone;
(2) substantially all of the use of the tangible property of such
individual in such business (whether owned or leased) is within an
economic impact zone;
(3) substantially all of the intangible property of such business is
used in, and exclusively related to, the active conduct of such business;
(4) substantially all of the services performed for such individual
in such business by employees of such business are performed in an
economic impact zone;
(5) at least one-third of such employees are residents of an
economic impact zone;
(6) less than five percent of the average of the aggregate
unadjusted bases of the property of such individual which is used in such
business is attributable to collectibles (as defined in Section 408(m)(2)
of the Internal Revenue Code of 1986) other than collectibles that are
held primarily for sale to customers in the ordinary course of such
business; and
(7) less than five percent of the average of the aggregate
unadjusted bases of the property of such individual which is used in such
business is attributable to nonqualified financial property.
For purposes of this subsection, `employee' includes the proprietor.
(D) For purposes of this chapter:
(1) Except as otherwise provided in this subsection, the term
`qualified business' means any trade or business.
(2) The rental to others of real property located in an economic
impact zone may be treated as a qualified business only if:
(a) in the case of real property which is not residential rental
property (as defined in Section 168(e)(2) of the Internal Revenue Code
of 1986), the lessee is an economic impact zone business; or
(b) in the case of residential rental property:
(i) such property was originally placed in service after the
date the economic impact zone was designated; or
(ii) such property is rehabilitated after such date in a
rehabilitation which meets requirements based on the principles of
Section 42(e)(3) of the Internal Revenue Code of 1986.
(3) The rental to others of tangible personal property shall be
treated as a qualified business if and only if substantially all of the rental
of such property is by economic impact zone businesses or by residents
of an economic impact zone.
(4) `Qualified business' shall not include any trade or business
consisting predominantly of the development or holding of intangibles
for sale or license.
(5) The term `qualified business' shall not include:
(a) any trade or business consisting of the operation of any
facility described in Section 144(c)(6)(B) of the Internal Revenue Code
of 1986; and
(b) any trade or business the principal activity of which is
farming (within the meaning of subsections (A) or (B) of Section
2032A(e)(5) of the Internal Revenue Code of 1986), but only if, as of the
close of the preceding taxable year, the sum of:
(i) the aggregate unadjusted bases (or, if greater, the fair
market value) of the assets owned by the taxpayer which are used in
such trade or business; and
(ii) the aggregate value of assets leased by the taxpayer
which are used in such a trade or business, exceeds five hundred
thousand dollars.
For purposes of subitem (b), rules similar to the rules of Section
1395(b) of the Internal Revenue Code of 1986 shall apply.
(6) For purposes of this chapter, the term `nonqualified financial
property' means debt, stock, partnership interests, options, futures
contracts, forward contracts, warrants, notional principal contracts,
annuities, and other similar property specified in regulations, except that
such term shall not include:
(a) reasonable amounts of working capital held in cash, cash
equivalents, or debt instruments with a term of eighteen months or less;
or
(b) debt instruments described in Section 1221(4) of the
Internal Revenue Code.
Section 12-12-120. (A) For purposes of this chapter:
(1) `qualified economic impact zone asset' means:
(a) any qualified economic impact zone stock;
(b) any qualified economic impact zone business property; and
(c) any qualified economic impact zone partnership interest.
(2) Except as provided in item (b), `qualified zone stock' means
any stock in a domestic corporation if:
(a) such stock is acquired by the taxpayer on original issue
from the corporation solely in exchange for cash;
(b) as of the time such stock was issued, such corporation was
an economic impact zone business (or, in the case of a new corporation,
such corporation was being organized for the purposes of being an
economic impact zone business); and
(c) during substantially all of the taxpayer's holding period for
such stock, such corporation qualified as an economic impact zone
business.
(3) `Qualified zone stock' does not include any stock the basis of
which is reduced under Section 12-12-70).
(4) `Qualified zone stock' does not include any stock acquired
from a corporation which made a substantial stock redemption or
distribution (without a bona fide business purpose therefor) in any
attempt to avoid the purposes of this section.
(5) `Qualified zone business property' means tangible property if:
(a) such property was acquired by the taxpayer by purchase (as
defined in Section 179(d)(2) of the Internal Revenue Code of 1986) after
the date on which the designation of the economic impact zone took
effect;
(b) the original use of such property in an economic impact
zone commences with the taxpayer; and
(c) during substantially all of the taxpayer's holding period for
such property, substantially all of the use of such property was in an
economic impact zone and in an economic impact zone business of the
taxpayer.
(6) The requirements of subitems (a) and (b) of item (5) must be
treated as satisfied with respect to:
(a) property which is substantially improved by the taxpayer; and
(b) any land on which such property is located.
For purposes of the preceding sentence, property must be treated as
substantially improved by the taxpayer if, during any twenty-four month
period beginning after the date on which the designation of the
economic impact zone took effect, additions to basis with respect to such
property in the hands of the taxpayer exceed the greater of:
(i) an amount equal to the adjusted basis at the beginning of
such twenty-four month period in the hands of the taxpayer; or
(ii) five thousand dollars.
(7) `Qualified zone business property' does not include land
which is not an integral part of a qualified business (as defined in
Section 12-12-80).
(8) `Qualified zone partnership interest' means any interest in a
partnership if:
(a) such interest is acquired by the taxpayer from the
partnership solely in exchange for cash;
(b) as of the time such interest was acquired, such partnership
was an economic impact zone business (or, in the case of a new
partnership, such partnership was being organized for purposes of being
an economic impact zone business); and
(c) during substantially all of the taxpayer's holding period for
such interest, such partnership qualified as an economic impact zone
business.
A rule similar to the rule of subsection (A)(4) applies for purposes of
this item.
(9) `Qualified zone asset' includes any property which would be
a qualified zone asset but for item (2)(a), (5)(b), or (8)(a) in the hands of
the taxpayer if such property was a qualified zone asset in the hands of
any prior holder.
(10) If any property ceases to be a qualified zone asset by reason
of item (2)(a), (5)(b), or (8)(c) after the ten-year period beginning on the
date the taxpayer acquired such property, such property shall continue
to be treated as meeting the requirements of such item, except that the
amount of gain which is qualified capital gain on any sale or exchange
of such property shall not exceed the amount which would be qualified
capital gain had such property been sold on the date of such cessation.
(11) The termination of any designation of an area as an economic
impact zone must be disregarded for purposes of determining whether
any property is a qualified zone asset.
(B) For purposes of this section:
(1) Except as otherwise provided in this subsection, the term
`qualified capital gain' means any long-term capital gain.
(2) The term `qualified capital gain' does not include any gain
which would be treated as ordinary income under Section 1250 of the
Internal Revenue Code of 1986 if Section 1250 of the Internal Revenue
Code of 1986 applied to all depreciation rather than the additional
depreciation.
(3) The term `qualified capital gain' does not include any gain
attributable to periods after the termination of any designation of an area
as an economic impact enterprise zone.
(C)(1) Gain on the sale or exchange of an interest in a pass-thru
entity held by the taxpayer (other than an interest in an entity which was
an economic impact zone business during substantially all of the period
the taxpayer held such interest) for more than five years shall be treated
as qualified capital gain to the extent such gain is attributable to amounts
which would be qualified capital gain on qualified zone assets
(determined as if such assets had been sold on the date of the sale or
exchange) held by such entity for more than five years and throughout
the period the taxpayer held such interest. A rule similar to the rule of
subsection (A)(2)(c) shall apply for purposes of the preceding sentence.
(2)(a) Any amount included in income by reason of holding an
interest in a pass-thru entity (other than an entity which was an
economic impact zone business during substantially all of the period the
taxpayer held the interest to which such inclusion relates) shall be
treated as qualified capital gain if such amount meets the requirements
of subitem (b).
(b) An amount meets the requirements of this subitem if:
(i) such amount is attributable to qualified capital gain
recognized on the sale or exchange by the pass-thru entity of property
which is a qualified zone asset in the hands of such entity and which was
held by such entity for the period required under subsection (A); and
(ii) such amount is includable in the gross income of the
taxpayer by reason of the holding of an interest in such entity which was
held by the taxpayer on the date on which such pass-thru entity acquired
such asset and at all times thereafter before the disposition of such asset
by such pass-thru entity.
(c) Subitem (2)(a) does not apply to any amount to the extent
such amount exceeds the amount to which subitem (2)(a) would have
applied if such amount were determined by reference to the interest the
taxpayer held in the pass-thru entity on the date the qualified zone asset
was acquired.
(3) For purposes of this section, `pass-thru entity' means any:
(a) partnership;
(b) `S' corporation;
(c) regulated investment company;
(d) limited liability company;
(e) common trust fund.
(D) In the case of the sale or exchange of an interest in a partnership,
or of stock in an `S' corporation, which was an economic impact zone
business during substantially all of the period the taxpayer held such
interest or stock, the amount of qualified capital gain must be
determined without regard to:
(1) any intangible, and any land, which is not an integral part of
any qualified business (as defined in Section 12-12-80); and
(2) gain attributable to periods before the designation of an area
as an economic impact zone.
(E) For purposes of this chapter:
(1) In the case of a transfer of a qualified zone asset to which this
subsection applies, the transferee shall be treated as:
(a) having acquired such asset in the same manner as the
transferor; and
(b) having held such asset during any continuous period
immediately preceding the transfer during which it was held (or treated
as held under this subsection) by the transferor.
(2) This subsection shall apply to any transfer:
(a) by gift;
(b) at death; or
(c) from a partnership to a partner thereof of a qualified zone
asset with respect to which the requirements of subsection (D)(2) are
met at the time of the transfer (without regard to the five-year holding
requirement).
(3) Rules similar to the rules of Section 1244(d)(2) of the Internal
Revenue Code of 1986 shall apply for purposes of this section.
Section 12-12-130. The South Carolina Department of Revenue and
Taxation shall prescribe procedures and promulgate regulations as may
be necessary or appropriate to carry out the purposes of this
chapter."
SECTION 2. This act takes effect January 1, 1994.
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