S 1340 General Bill, By Patterson, Courson, Giese and Jackson
 A Bill to amend Section 12-36-90, as amended, Code of Laws of South Carolina,
 1976, relating to the definition of gross proceeds of sales for purposes of
 the sales tax, so as to provide that this term does not include proceeds from
 data processing and to define the term data processing for this purpose and
 for purposes of this Chapter; to amend Section 12-36-120, as amended, relating
 to a sale at wholesale for purposes of the sales tax, so as to include the
 sale of certain computer software within the meaning of a sale at wholesale;
 and to amend Section 12-36-2110, as amended, relating to the maximum sales tax
 on the sale or lease of certain items, so as to revise the maximum sales tax
 on the sale or lease of each item of machinery for research and development.

   04/13/94  Senate Introduced and read first time SJ-2
   04/13/94  Senate Referred to Committee on Finance SJ-2

A BILL

TO AMEND SECTION 12-36-90, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DEFINITION OF GROSS PROCEEDS OF SALES FOR PURPOSES OF THE SALES TAX, SO AS TO PROVIDE THAT THIS TERM DOES NOT INCLUDE PROCEEDS FROM DATA PROCESSING AND TO DEFINE THE TERM DATA PROCESSING FOR THIS PURPOSE AND FOR PURPOSES OF THIS CHAPTER; TO AMEND SECTION 12-36-120, AS AMENDED, RELATING TO A SALE AT WHOLESALE FOR PURPOSES OF THE SALES TAX, SO AS TO INCLUDE THE SALE OF CERTAIN COMPUTER SOFTWARE WITHIN THE MEANING OF A SALE AT WHOLESALE; AND TO AMEND SECTION 12-36-2110, AS AMENDED, RELATING TO THE MAXIMUM SALES TAX ON THE SALE OR LEASE OF CERTAIN ITEMS, SO AS TO REVISE THE MAXIMUM SALES TAX ON THE SALE OR LEASE OF EACH ITEM OF MACHINERY FOR RESEARCH AND DEVELOPMENT.

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

SECTION 1. Section 12-36-90(2) of the 1976 Code, as last amended by Act 164 of 1993, is further amended by adding:

"(f) the proceeds from data processing. For this purpose and for purposes of this chapter, `data processing' means the manipulation of information furnished by a customer through all or part of a series of operations involving an interaction of procedures, processes, methods, personnel, and computers. Examples of such processing include, without limitation, summarizing, computing, extracting, retrieving, sorting, sequencing, and the use of computers."

SECTION 2. Section 12-36-120 of the 1976 Code, as last amended by Act 361 of 1992, is further amended by adding:

"(5) Computer software to a person or entity which sells, leases, or licenses such software for use by others including, but not limited to:

(a) software which is customized for otherwise modified prior to such sales, lease, or license to others, and

(b) software which is combined or otherwise integrated with other software prior to the sale, lease, or license to others of such combined or integrated software."

SECTION 3. Section 12-36-2110(D) of the 1976 Code, as amended by Act 110 of 1991, is further amended to read:

"(D) The maximum tax levied pursuant to this chapter on the sale or use of each item of machinery for research and development is three hundred dollars. As used in this subsection, `machinery for research and development' means machinery used directly and exclusively in research and development in the experimental or laboratory sense for new products, new uses for existing products, or for improving existing products. To be eligible for the limitation imposed by this subsection, the machinery must be located in a separate facility devoted exclusively to research and development as defined in this subsection. The limitation does not extend to machinery used primarily in connection with efficiency surveys, management studies, consumer surveys, economic surveys, advertising, promotion, or research in connection with literary, historical, or similar projects."

SECTION 4. This act takes effect upon approval by the Governor.