S*351 Session 106 (1985-1986)
S*0351(Rat #0146, Act #0101 of 1985) General Bill, By J.M. Waddell, Leatherman,
Leventis, I.E. Lourie and N.A. Theodore
Similar(H 2596)
A Bill to enact the South Carolina Income Tax Federal Conforming Amendments of
1985 by amending Sections 12-7-20, 12-7-210, 12-7-212, 12-7-235, 12-7-250,
12-7-1510, and 12-7-2418, Code of Laws of South Carolina, 1976, all relating
to the Income Tax Act of 1926, so as to provide definitions, rate tables and
adjustments, clarifications, exemptions, filing requirements, and corrections
of cross references necessary to adopt for South Carolina income tax purposes
the definitions of taxable income established by the Internal Revenue Code of
1954, to amend Sections 12-9-10, as amended, 12-9-110, as amended, 12-9-310,
as amended, and 12-9-315, as amended, all relating to income tax withholding,
so as to correct cross references and to require withholding by fiduciaries
making distributions to out-of-state beneficiaries, to amend Section
12-37-220, as amended, relating to property exempt from ad valorem taxation,
so as to correct a cross reference, to amend Sections 21-37-20, 46-47-20, and
Section 3 of Act 76 of 1977, as amended, relating to respectively to
disclaimer of property interests, the Family Farm Development Authority Act,
and the State Housing Authority, so as to correct cross references, to amend
the 1976 Code by adding Sections 12-7-618, 12-7-1625 and Articles 4 and 12 in
Chapter 7 of Title 12, so as to adopt for South Carolina income tax purposes
the federal definitions of taxable income for individuals, corporations,
estates, and trusts, to provide for filing status for individual South
Carolina taxpayers, to provide modifications for South Carolina purposes of
the federal definitions of taxable income, to adopt for South Carolina income
tax purposes the federal provisions relating to accounting periods and
methods, and to authorize the South Carolina Tax Commission to require
taxpayers to file copies of federal tax returns with the Commission and to
repeal Sections 12-7-90, 12-7-211, 12-7-220, 12-7-260, 12-7-270, 12-7-280,
12-7-285, 12-7-300, 12-7-310, 12-7-320, 12-7-330, 12-7-510, 12-7-520,
12-7-530, 12-7-535, 12-7-540, 12-7-550, 12-7-560, 12-7-580, 12-7-600,
12-7-610, 12-7-660, 12-7-670, 12-7-680, 12-7-685, 12-7-690, 12-7-700,
12-7-705, 12-7-710, 12-7-720, 12-7-730, 12-7-740, 12-7-750, 12-7-760, and
12-7-770 of the 1976 Code, and Articles 7 and 11 of Chapter 7 of Title 12 of
the 1976 Code, and Section 23, Part II of Act 517 of 1980, and Act 424 of
1978, all relating to the Income Tax Act of 1926.
03/13/85 Senate Introduced and read first time SJ-833
03/13/85 Senate Referred to Committee on Finance SJ-834
03/21/85 Senate Committee report: Favorable with amendment
Finance SJ-976
03/27/85 Senate Read second time SJ-1200
03/27/85 Senate Ordered to third reading with notice of
amendments SJ-1201
04/03/85 Senate Amended SJ-1261
04/03/85 Senate Read third time and sent to House SJ-1264
04/04/85 House Introduced and read first time HJ-2097
04/04/85 House Referred to Committee on Ways and Means HJ-2099
05/02/85 House Committee report: Favorable with amendment Ways
and Means HJ-2879
05/08/85 House Objection by Rep. J. Arthur, Davenport & Aydlette
HJ-2999
05/08/85 House Objection withdrawn by Rep. Aydlette & Davenport
HJ-3005
05/08/85 House Amended HJ-3068
05/08/85 House Read second time HJ-3069
05/09/85 House Read third time HJ-3085
05/09/85 House Returned HJ-3085
05/09/85 Senate Concurred in House amendment and enrolled SJ-2010
05/15/85 Ratified R 146
05/21/85 Signed By Governor
05/21/85 Effective date 05/21/85
05/21/85 Act No. 101
06/03/85 Copies available
(A101, R146, S351)
AN ACT TO ENACT THE SOUTH CAROLINA INCOME TAX FEDERAL CONFORMING AMENDMENTS OF
1985 BY AMENDING SECTIONS 12-7-20, 12-7-210, 12-7-212, 12-7-235, 12-7-250,
12-7-1510, AND 12-7-2418, CODE OF LAWS OF SOUTH CAROLINA, 1976, ALL RELATING TO
THE INCOME TAX ACT OF 1926, SO AS TO PROVIDE DEFINITIONS, RATE TABLES AND
ADJUSTMENTS, CLARIFICATIONS, EXEMPTIONS, FILING REQUIREMENTS, AND CORRECTIONS OF
CROSS REFERENCES NECESSARY TO ADOPT FOR SOUTH CAROLINA INCOME TAX PURPOSES THE
DEFINITIONS OF TAXABLE INCOME ESTABLISHED BY THE INTERNAL REVENUE CODE OF 1954,
TO AMEND SECTIONS 12-9-10, AS AMENDED, 12-9-110, AS AMENDED, 12-9-310, AS
AMENDED, AND 12-9-315, AS AMENDED, ALL RELATING TO INCOME TAX WITHHOLDING, SO AS
TO CORRECT CROSS REFERENCES AND TO REQUIRE WITHHOLDING BY FIDUCIARIES MAKING
DISTRIBUTIONS TO OUT-OF-STATE BENEFICIARIES, TO AMEND SECTION 12-37-220, AS
AMENDED, RELATING TO PROPERTY EXEMPT FROM AD VALOREM TAXATION, SO AS TO CORRECT
A CROSS REFERENCE, TO AMEND SECTIONS 21-37-20, 46-47-20, AND SECTION 3 OF ACT 76
OF 1977, AS AMENDED, RELATING RESPECTIVELY TO DISCLAIMER OF PROPERTY INTERESTS,
THE FAMILY FARM DEVELOPMENT AUTHORITY ACT, AND THE STATE HOUSING AUTHORITY, SO
AS TO CORRECT CROSS REFERENCES, TO AMEND THE 1976 CODE BY ADDING SECTIONS
12-7-618, 12-7-1625 AND ARTICLES 4 AND 12 IN CHAPTER 7 OF TITLE 12, SO AS TO
ADOPT FOR SOUTH CAROLINA INCOME TAX PURPOSES THE FEDERAL DEFINITIONS OF TAXABLE
INCOME FOR INDIVIDUALS, CORPORATIONS, ESTATES, AND TRUSTS, TO PROVIDE FOR FILING
STATUS FOR INDIVIDUAL SOUTH CAROLINA TAXPAYERS, TO PROVIDE MODIFICATIONS FOR
SOUTH CAROLINA PURPOSES OF THE FEDERAL DEFINITIONS OF TAXABLE INCOME, TO ADOPT
FOR SOUTH CAROLINA INCOME TAX PURPOSES THE FEDERAL PROVISIONS RELATING TO
ACCOUNTING PERIODS AND METHODS, AND TO AUTHORIZE THE SOUTH CAROLINA TAX
COMMISSION TO REQUIRE TAXPAYERS TO FILE COPIES OF FEDERAL TAX RETURNS WITH THE
COMMISSION AND TO REPEAL SECTIONS 12-7-90, 12-7-211, 12-7-220, 12-7-260,
12-7-270, 12-7-280, 12-7-285, 12-7-300, 12-7-310, 12-7-320, 12-7-330, 12-7-510,
12-7-520, 12-7-530, 12-7-535, 12-7-540, 12-7-550, 12-7-560, 12-7-580, 12-7-600,
12-7-610, 12-7-660, 12-7-670, 12-7-680, 12-7-685, 12-7-690, 12-7-700, 12-7-705,
12-7-710, 12-7-720, 12-7-730, 12-7-740, 12-7-750, 12-7-760, AND 12-7-770 OF THE
1976 CODE, AND ARTICLES 7 AND 11 OF CHAPTER 7 OF TITLE 12 OF THE 1976 CODE, AND
SECTION 23, PART II OF ACT 517 OF 1980, AND ACT 424 OF 1978, ALL RELATING TO THE
INCOME TAX ACT OF 1926.
Be it enacted by the General Assembly of the State of South Carolina:
Act may be cited
SECTION 1. This act may be cited as the South Carolina Income Tax Federal
Conforming Amendments of 1985.
Definitions
SECTION 2. Section 12-7-20 of the 1976 Code is amended to read:
"Section 12-7-20. For the purposes of this chapter, unless otherwise
required by the context:
(1) The word 'taxpayer' means and includes an individual, a trust, estate,
partnership, association, company, or corporation subject to the tax imposed by
this chapter.
(2) The word 'business' includes trade, profession, occupation, or employment.
(3) The words 'tangible property' mean real property and corporeal personal
property and do not mean money, bank deposits, shares of stock, bonds, credits,
evidences of debt, choses in action, or evidences of an interest in property.
(4) The words 'intangible property' mean all property other than tangible
property.
(5) The words 'income year' mean the calendar year or the fiscal year upon the
basis of which the net income is computed under this chapter; if no fiscal year
has been established they mean the calendar year.
(6) The words 'fiscal year' mean an income year ending on the last day of any
month other than December.
(7) The word 'paid' for the purpose of the deductions under this chapter means
'paid or accrued' or 'paid or incurred'.
(8) The word 'received' for the purpose of the computation of net income under
this chapter means 'received or accrued' and the words 'received and accrued'
must be construed according to the method of accounting upon the basis of which
the net income is computed under this chapter.
(9) The words 'foreign corporation' mean any corporation other than a domestic
corporation.
(10) The phrase 'property having an actual situs in this State' includes real
property physically located within this State and personal property of a bona
fide resident of this State wherever situate.
(11) 'Internal Revenue Code' means the Internal Revenue Code of 1954 as
amended through December 31, 1984.
(12) All of the various terms defined in Sections 7701 and 7702 of the
Internal Revenue Code have the same meaning for South Carolina income tax
purposes, unless a different meaning is clearly required.
(13) 'Resident individual' means any individual who is domiciled in this
State. A 'nonresident individual' means an individual other than a resident
individual or a part-year resident.
(14) 'Part-year resident' means any individual who is a resident individual
for part, but not all of the tax year.
(15) 'Resident estate' means the estate of a decedent who at his death was
domiciled in this State. 'Nonresident estate' means an estate other than a
resident estate.
(16) 'Resident trust' means a trust which is being administered in this State.
'Nonresident trust' means a trust other than a resident trust.
(17) 'Resident partner' means a partner who was during the tax year a resident
individual, a resident estate, a resident trust, or a resident corporation.
'Nonresident partner' means a partner other than a resident partner.
(18) 'Resident beneficiary' means a beneficiary of an estate or trust which
beneficiary is a resident individual, a resident estate, a resident trust,
resident partnership, or a resident corporation. 'Nonresident beneficiary' means
a beneficiary other than a resident beneficiary.
(19) 'Resident corporation' means a corporation whose principal place of
business, as defined in Section 12-7-1110, is located within this State.
'Nonresident corporation' means any corporation other than a resident
corporation.
(20) For purposes of Internal Revenue Code Sections 85, 165, 170, 213, 219,
and 631, 'Adjusted Gross Income' for South Carolina tax purposes means a
taxpayer's adjusted gross income for federal income tax purposes without regard
to the adjustments required by Sections 12-7-430 and 12-7-435."
Income tax imposed
SECTION 3. Section 12-7-210 of the 1976 Code is amended to read:
"Section 12-7-210. A tax is imposed on the South Carolina taxable income
of Individuals, Estates, and Trusts computed at the following rates:
(a) Married Individuals filing jointly, Surviving Spouses, and Heads of
Household:
Not over $3,400 no tax
over $3,400 but not 2 percent of
over $5,400 the excess over $3,400
over $5,400 but not $40 plus 3 percent of
over $7,400 the excess over $5,400
over $7,400 but not $100 plus 4 percent of
over $9,400 the excess over $7,400
over $9,400 but not $180 plus 5 percent of
over $11,400 the excess over $9,400
over $11,400 but not $280 plus six percent
over $13,600 of the excess over
$11,400
over $13,600 $412 plus 7 percent of
the excess over
$13,600.
(b) Unmarried Individuals (not including Surviving Spouses and Heads of
Households):
Not over $2,300 no tax
over $2,300 but not 2 percent of the
over $4,300 excess over $2,300
over $4,300 but not $40 plus 3 percent of
over $6,300 the excess over $4,300
over $6,300 but not $100 plus 4 percent of
over $8,300 the excess over $6,300
over $8,300 but not $180 plus 5 percent of
over $10,300 the excess over $8,300
over $10,300 but not $280 plus 6 percent of
over $12,300 the excess over $10,300
over $12,300 $400 plus 7 percent of
the excess over
$12,300.
(c) Married Individuals filing separately:
Not over $1,700 no tax
over $1,700 but not 2 percent of the
over $3,700 excess over $1,700
over $3,700 but not $40 plus 3 percent of
over $5,700 the excess over $3,700
over $5,700 but not $100 plus 4 percent of
over $7,700 the excess over $5,700
over $7,700 but not $180 plus 5 percent of
over $9,700 the excess over $7,700
over $9,700 but not $280 plus 6 percent of
over $11,700 the excess over $9,700
over $11,700 $400 plus 7 percent of
the excess over
$11,700.
(d) Estates and Trusts and Nonresident Individuals:
Not over $2,000 2 percent of taxable
income
over $2,000 but not $40 plus 3 percent of
over $4,000 the excess over $2,000
over $4,000 but not $100 plus 4 percent of
over $6,000 the excess over $4,000
over $6,000 but not $180 plus 5 percent of
over $8,000 the excess over $6,000
over $8,000 but not $280 plus 6 percent of
over $10,000 the excess over $8,000
over $10,000 $400 plus 7 percent of
the excess over
$10,000.
(e) The amount not subject to tax in items (a) through (c) of this section
must be adjusted annually effective for taxable years beginning after 1984 as
provided in Internal Revenue Code Section 1(f) and the minimum and maximum amount
of each tax bracket in those items must be adjusted by the same dollar amount
that the amount not subject to tax is adjusted. The Commission annually shall
prescribe tables reflecting the adjustments which shall apply in lieu of the
amounts in items (a) through (c).
(f) The Commission may issue tax tables consistent with the rates set pursuant
to this section for taxpayers with taxable incomes of less than fifty thousand
dollars."
Individual making return
SECTION 4. Section 12-7-212 of the 1976 Code, as added by Section 3 of Act 69
of 1981, is amended to read:
"Section 12-7-212. An individual making a return under Section 12-7-210 for
a period of less than twelve months on account of a change in his accounting
period may not use any tax table prescribed by the Commission pursuant to item
(f) of Section 12-7-210."
Corporations exempt
SECTION 5. Section 12-7-235 of the 1976 Code, as added by Section 1 of Act 480
of 1984, is amended to read:
"Section 12-7-235. (a) The following corporations are exempt from the tax
imposed by Section 12-7-230:
(1) Banks as defined in Section 12-11-10
(2) Associations as defined in Section 12-13-10
(3) Insurance companies
(4) Nonprofit corporations organized pursuant to Sections 33-35-10 through
33-35-170 for the purpose of providing water supply and sewerage disposal or a
combination of those services
(5) Farmers' or other mutual hail, cyclone, or fire insurance companies,
mutual ditch or irrigation companies, mutual or cooperative telephone companies,
or like organizations of a purely local character, the income of which consists
solely of assessments, dues, and fees collected from members for the sole purpose
of meeting expenses
(6) Organizations exempt from income taxes pursuant to Section 33-49-120.
(b) If a small business corporation makes a valid election under the provisions
of Subchapter S of the Internal Revenue Code to be exempt from federal income
taxes to the extent provided in Subchapter S of the Internal Revenue Code, the
small business corporation is similarly exempt from the tax imposed by Section
12-7-230. The shareholders shall include in their South Carolina taxable income
their proportionate share of the corporation's South Carolina taxable income.
Nonresident shareholders of an electing small business corporation are taxable
on their share of the corporation's South Carolina taxable income as a
nonresident, as provided in Section 12-7-450. For South Carolina income tax
purposes, an electing small business corporation and the shareholders are treated
in the same manner provided in Subchapter S of the Internal Revenue Code and
applicable federal regulations and the corporation shall file with the Commission
any information return as may be required by the Commission.
(c) The privilege of filing a consolidated income tax return is allowed as
provided in Section 12-7-1570."
Taxpayers partially within and without the State
SECTION 6. Section 12-7-250 of the 1976 Code is amended to read:
"Section 12-7-250. If any taxpayer, except those defined in former 1962
Code Section 65-256, is transacting or conducting his business partly within and
partly without this State, the income tax as provided in this chapter is imposed
upon a base which reasonably represents the proportion of the trade or business
carried on within this State. The taxpayer subject to taxation under this
section is considered to have been transacting or conducting his business partly
within and partly without the State if the taxpayer is subject to a net income
tax or a franchise tax measured by net income in any other state, the District
of Columbia, a territory or possession of the United States, or any foreign
country, or would be subject to the net income tax in any other taxing
jurisdiction if the other taxing jurisdiction adopted the net income tax laws of
this State. Nothing in this section operates to deny any taxpayer affected by
this section and Sections 12-7-230, 12-7-240, and 12-7-1110 to 12-7-1200 the
benefits of the net operating loss deduction where the taxpayer suffers a net
loss, but as to the apportionment of net operating losses carried forward, the
provisions of those sections apply as if the taxpayer had a net income."
Returns must be made
SECTION 6A. Section 12-7-1510 of the 1976 Code is amended to read:
"Section 12-7-1510. Returns with respect to income taxes must be made by
the following:
(1) (A) Every individual having for the taxable year a gross income of the
exemption amount or more, except that a return is not required of an individual,
other than an individual referred to in subitem (C):
(i) who is not married, is not a surviving spouse, and for the taxable
year has a gross income of less than the sum of the exemption amount plus the
zero bracket amount applicable to such an individual.
(ii) who is a surviving spouse and for the taxable year has a gross income
of less than the sum of the exemption amount plus the zero bracket amount
applicable to such an individual, or
(iii) who makes a joint return and whose gross income, when combined with
the gross income of his spouse, is, for the taxable year, less than the sum of
twice the exemption amount plus the zero bracket amount applicable to a joint
return, but only if the individual and his spouse, at the close of the taxable
year, had the same household as their home.
Clause (iii) does not apply if for the taxable year the spouse makes a separate
return or any other taxpayer is entitled to an exemption for the spouse.
(B) The amount specified in clause (i) or (ii) of subitem (A) must be
increased by the exemption amount in the case of an individual entitled to an
additional personal exemption under Internal Revenue Code Section 151(c)(1), and
the amount specified in clause (iii) of subitem (A) must be increased by the
exemption amount for each additional personal exemption to which the individual
or his spouse is entitled under Internal Revenue Code Section 151(c).
(C) The exception under subitem (A) does not apply to:
(i) a nonresident individual;
(ii) an individual making a return under Internal Revenue Code Section
443(a)(1) for a period of less than twelve months on account of a change in his
annual accounting period;
(iii) an individual who has income, other than earned income, of the
exemption amount or more and who is described in Internal Revenue Code Section
63(e)(1)(D); or
(iv) an estate or trust.
(D) For purposes of this item:
(i) The term 'zero bracket amount' has the meaning given to that term by
Internal Revenue Code Section 63(d).
(ii) The term 'exemption amount' has the meaning given to that term by
Internal Revenue Code Section 151(f).
(2) Every corporation subject to taxation.
(3) Every estate the gross income of which for the taxable year is six hundred
dollars or more.
(4) Every trust having for the taxable year any taxable income, or having
gross income of six hundred dollars or over, regardless of the amount of taxable
income.
(5) Every estate or trust of which any beneficiary is a nonresident.
(6) Every political organization within the meaning of Internal Revenue Code
Section 527(e)(1), and every fund treated under Internal Revenue Code Section
527(g) as if it constituted a political organization, which has political
organization taxable income within the meaning of Internal Revenue Code Section
527(c)(1) for the taxable year.
(7) Every homeowners association within the meaning of Internal Revenue Code
Section 528 (c)(1) which has homeowners association taxable income within the
meaning of Internal Revenue Code Section 528(d) for the taxable year.
(8) Every estate of an individual under Chapters 7 or 11 of Title 11 of the
United States Code relating to bankruptcy the gross income of which for the
taxable year is two thousand seven hundred dollars or more."
Dewtermination of income
SECTION 7. Chapter 7, of Title 12 of the 1976 Code is amended by adding:
"Article 4
Section 12-7-410. The South Carolina gross income, adjusted gross income, and
taxable income of an individual is the individual's gross income, adjusted gross
income, and taxable income as determined under the Internal Revenue Code with the
modifications specified in Sections 12-7-430 and 12-7-435.
Section 12-7-415. The South Carolina gross income and taxable income of a
corporation, including the unrelated business income of a corporation exempt from
taxation under Internal Revenue Code Section 501 et seq., is the corporation's
gross income and taxable income as determined under the Internal Revenue Code
with the modifications specified in Section 12-7-430.
Section 12-7-420. A partnership is not subject to tax under this chapter. All
of the provisions of the Internal Revenue Code apply to determine the gross
income, adjusted gross income, and taxable income of a partnership and its
partners, subject to the modifications provided in Section 12-7-430.
Section 12-7-425. The South Carolina gross income and taxable income of an
estate or a trust is the estate's or trust's gross income and taxable income as
determined under the Internal Revenue Code including the provisions of Internal
Revenue Code Section 584, with the modifications provided in Section 12-7-430.
Section 12-7-430. The South Carolina taxable income of individuals, estates,
trusts, partnerships, and corporations is modified as provided in this section.
(a) The gross income of a taxpayer is determined without application of
Internal Revenue Code Sections 78, 86, and 87.
(b) The determination of gross income as provided in the following Internal
Revenue Code Sections is made with the following modifications:
(1) The exclusion from gross income authorized by Internal Revenue Code
Section 103 is modified to exempt only interest upon obligations of this State,
any of its political subdivisions and to include obligations of the United
States.
(2) In any and all Internal Revenue Code Sections that make reference to
Internal Revenue Code Section 103, the modification provided in subitem (1) of
item (b) of this section similarly applies.
(3) If a taxpayer has included a state income tax refund in federal gross
income, South Carolina gross income is computed without regard to such state
income tax refund.
(4) No exclusion from gross income is permitted for South Carolina income
tax purposes as permitted by Internal Revenue Code Sections 911, 912, 931 through
936.
(c) Adjusted gross income and taxable income are computed without the
deductions authorized by Internal Revenue Code Section 196.
(d) The deductions used in computing adjusted gross income and taxable income
are modified as follows:
(1) The deduction permitted by Internal Revenue Code Section 164 must be
computed in the same manner except there is no deduction for state and local
income taxes, or state and local franchise taxes measured by net income, or any
income taxes, or any taxes measured by or with respect to net income.
(2) Any net operating loss deduction is computed in accordance with Internal
Revenue Code Section 172, except that all items of income and deductions used in
computing the net operating loss deduction are adjusted as provided in this
section and in Section 12-7-435 and no carrybacks are allowed.
(3) For purposes of computing the depletion deduction pursuant to Internal
Revenue Code Sections 611 through 613, a taxpayer who allocates or apportions
income under the provisions of Article 9 of this chapter has the option of
adjusting taxable income to eliminate the allowance for depletion otherwise
allowable, and to deduct as an allowance for depletion from South Carolina
taxable income subject to tax after allocation and apportionment depletion
computed in accordance with Internal Revenue Code Sections 611 through 613 with
respect to mines, oil and gas wells, and other natural deposits located in this
State, except that the allowance may not exceed fifty percent of the net income
apportioned to South Carolina by Sections 12-7-1140 through 12-7-1190.
(4) The disallowance of deductions required by Internal Revenue Code Section
265 shall apply for South Carolina income tax purposes if the related income is
exempt for South Carolina income tax purposes, whether or not the income is
exempt for federal purposes.
(5) The limiting provisions of Internal Revenue Code Section 280C are not
applied.
(6) For purposes of computing the deduction allowed by Internal Revenue Code
Section 691(c) the term 'estate tax' means the taxes imposed under Chapter 15 of
Title 7 including any South Carolina generation-skipping transfer tax.
(7) If for federal income tax purposes a taxpayer claims a credit for which
Internal Revenue Code Section 48(q) requires a reduction of basis, the taxpayer
may reduce his South Carolina taxable income by the amount of the reduction in
basis in the tax year in which basis is so reduced for federal income tax
purposes. If a taxpayer makes an election pursuant to Internal Revenue Code
Section 48(q)(4) to reduce the credit and not the basis, this subitem does not
apply.
(8) A corporation that has a net capital loss for a tax year may not carry
back the loss to a prior tax year as permitted by Internal Revenue Code Section
1212(a), but it may carry forward the net capital loss to future years to the
extent provided in Internal Revenue Code Section 1212(a).
(e) If the income of a taxpayer is subject to allocation or apportionment, or
both, pursuant to Article 9 of this chapter then South Carolina taxable income
is modified as provided in that Article.
(f) A beneficiary of a trust shall exclude from South Carolina taxable income
any excess distributions by trusts included in the beneficiary's federal taxable
income by reason of Internal Revenue Code Sections 665 through 669 or any
comparable provisions.
Section 12-7-435. There is allowed as a deduction from South Carolina taxable
income of an individual the following amounts:
(a) Any retired person, or his surviving spouse, who receives a federal civil
service retirement annuity is allowed to deduct from taxable income three
thousand dollars of the annuity received each taxable year exclusive of any other
exemption. The provisions of this item do not apply to retired persons who are
now exempt from payment of taxes on federal civil service retirement annuities.
(b) Any person retired from the uniformed services of the United States with
twenty or more years active duty service, or his surviving spouse, is allowed to
deduct from taxable income three thousand dollars of his uniformed services
retirement pay received each taxable year.
(c) Any retired person, or his surviving spouse, who attains the age of
sixty-five before the close of the taxable year and who receives income under one
or more qualified pension programs is allowed to deduct from taxable income three
thousand dollars of the pension income received in each taxable year. If the
pension income also qualifies for a deduction from taxable income under the
provisions of items (a) or (b) of this section, no deduction from taxable income
is permitted under the provisions of this item.
(d) All amounts received from the South Carolina Retirement System as provided
in Chapter 1 of Title 9.
(e) Retirement pay received by police officers or firemen from a municipality
or county which has a group retirement plan.
(f) Amounts received and excludable from income by Sections 12-7-565 and
12-7-570.
(g) The amount received for disability retirement due to permanent and total
disability by any person who could qualify for the homestead exemption under
Section 12-37-250 by reason of being classified as totally and permanently
disabled.
(h) A taxpayer may deduct from South Carolina taxable income those expenses
incurred while conducting business as provided in Internal Revenue Code Section
162(h) without regard to limitations in Internal Revenue Code Section 162(h)(4).
Section 12-7-440. (a) In all cases where a husband and wife file a joint South
Carolina income tax return, the determination of South Carolina taxable income
must, unless otherwise provided, be made as if husband and wife were one
individual taxpayer.
(b) If the federal taxable income of a husband and wife are determined on
separate federal returns, their South Carolina taxable income must be separately
reported and taxed.
(c) If both a husband and wife are residents, and if their federal taxable
income is determined on a joint federal return, their South Carolina taxable
income must be reported and taxed on the basis of a joint South Carolina income
tax return.
(d) If both a husband and wife are nonresidents, and if their federal taxable
income is determined on a joint federal return, their South Carolina taxable
income must be reported and taxed on the basis of a joint South Carolina return.
(e) If either a husband or wife is a resident and the other is a nonresident,
and if their federal taxable income is determined on a joint federal return,
their South Carolina taxable income must be reported and taxed on the basis of
a joint South Carolina return as provided under the nonresident provisions of
Section 12-7-450.
(f) If neither a husband or wife files a federal return, their South Carolina
taxable income must be determined on a separate basis unless both elect to have
their South Carolina taxable income determined on the basis of a joint South
Carolina tax return.
Section 12-7-445. An individual who is a resident of South Carolina for part of
a year may elect to:
(a) Report and compute his South Carolina tax as if he were a resident for the
entire year and take the applicable credit as provided in Section 12-7-2410; or
(b) Report and compute his South Carolina tax as if he were a nonresident for
the entire year, except that for purposes of this computation the South Carolina
taxable income for that period during which the individual was a resident
includes all items of income, gain, loss, or deductions whether or not derived
from sources within South Carolina with the modifications specified in Sections
12-7-430 and 12-7-435.
Section 12-7-450. The South Carolina taxable income of a nonresident individual,
a nonresident trust, a nonresident estate, and a nonresident beneficiary is the
same as if he were a resident individual or resident trust or resident estate or
a resident beneficiary with the following modifications:
(a) South Carolina taxable income as determined in Sections 12-7-410,
12-7-420, or 12-7-425 only includes income from the following sources:
Income, gains, losses, or deductions attributable to:
(1) The ownership of any interest in real or tangible personal property
located in South Carolina;
(2) A business, trade, profession, or occupation carried on in South
Carolina or compensation for services performed in South Carolina;
(3) A business, trade, profession, or occupation carried on or compensation
for services performed partly within and partly without South Carolina to the
extent allocable and apportionable to South Carolina as determined under Article
9 of this chapter;
(4) The distributive share of the South Carolina part of partnership income,
gains, losses, or deductions;
(5) The distributive share of the South Carolina part of estate or trust
income, gains, losses, or deductions;
(6) Income from intangible personal property, including annuities,
dividends, interest, and gains from the disposition of intangible personal
property to the extent that such income is from property employed in a trade,
business, profession, or occupation carried on in South Carolina. A nonresident
individual, nonresident partnership, nonresident trust, or nonresident estate,
other than a dealer holding property primarily for sale to customers in the
ordinary course of his or its trade or business, is not considered to carry on
a business, trade, profession, or occupation in South Carolina solely by reason
of the purchase and sale of property for his or its own account;
(7) The distributive share of the South Carolina taxable income or loss of
a corporation defined in Subchapter S of the Internal Revenue Code.
(b) The South Carolina taxable income of a nonresident individual, nonresident
estate, or nonresident trust must be adjusted as follows:
(1) The personal exemptions of a nonresident individual, nonresident estate,
or nonresident trust must be reduced to an amount which is the same proportion
as South Carolina adjusted gross income is of federal adjusted gross income.
(2) If a nonresident individual itemizes deductions, the excess itemized
deductions must be reduced to an amount which is the same proportion as South
Carolina adjusted gross income is of federal adjusted gross income.
(3) In addition, all nonresident individuals are permitted an additional
deduction from South Carolina taxable income equal to the applicable 'zero
bracket amount' as defined in Internal Revenue Code Section 63(d), depending on
filing status, reduced to an amount by which the South Carolina adjusted gross
income is of federal adjusted gross income.
(4) The itemized deductions of a nonresident estate or nonresident trust
must be reduced by an amount which is the same proportion as South Carolina
adjusted gross income is of federal adjusted gross income.
(5) For purposes of the computations required in subitems (1) through (4)
of this item, the term South Carolina adjusted gross income means the adjusted
gross income of the taxpayer, computed based solely on the income taxable in
South Carolina as provided in item (a) of this section and in accordance with the
provisions of the Internal Revenue Code, with the adjustments provided in Section
12-7-430, where applicable. Adjustments to gross income authorized by Internal
Revenue Code Section 62 must be apportioned based on the ratio of South Carolina
gross income to federal gross income unless the adjustment is directly connected
with an item of gross income and in such event the adjustment is allowed in
computing South Carolina adjusted gross income only to the extent the item of
income is taxable in South Carolina.
(6) The Commission may issue rules and promulgate regulations to effectuate
the provisions of this item.
(c) The South Carolina taxable income of a nonresident estate or nonresident
trust as determined in items (a) and (b) of this section must be allocated among
the estate or trust and its beneficiaries (including solely for purposes of this
allocation, resident beneficiaries) in proportion to their respective shares of
distributable net income. The amounts so allocated shall have the same character
under this chapter as under the Internal Revenue Code. If for the taxable year
the estate or trust does not have distributable net income for federal tax
purposes, the taxable income must be allocated between the estate or trust and
its beneficiaries in proportion that the income is retained by the estate or
trust and distributable or distributed by the estate or trust.
(d) The nonresident beneficiary of any estate or trust is taxable on his share
of South Carolina taxable income as determined under items (a), (b), and (c) of
this section.
Section 12-7-455. (a) If a taxpayer was receiving an annuity prior to January
1, 1985, that is subject to tax pursuant to Internal Revenue Code Section 72, the
annuitant shall continue to report income from the annuity in the manner provided
in item (2) of Section 12-7-560 as in effect on December 31, 1984.
(b) If as of January 1, 1985, a taxpayer is for federal income tax purposes
amortizing a capital expense paid or incurred prior to January 1, 1985, as
provided in Internal Revenue Code Sections 169, 171, 174, 177, 184, 185, 188,
189, 194, 195, 248, or 709, the taxpayer is allowed to deduct for South Carolina
income tax purposes the amount amortized and deducted for federal income tax
purposes. At the expiration of the amortization for federal income tax purposes,
the taxpayer may continue to amortize, for South Carolina income tax purposes,
the balance of the capital expense using the same rate of amortization until the
cost of the item has been fully amortized for South Carolina income tax purposes.
(c) If prior to January 1, 1985, a taxpayer has made an election pursuant to
Internal Revenue Code Section 83(b), the election is not effective for South
Carolina income tax purposes unless the taxpayer reported on his South Carolina
income tax return for the year of the election, income in a manner consistent
with the election. If a taxpayer has not so reported income, then he is taxed
under the provisions of Internal Revenue Code Section 83 when income is otherwise
realized and recognized as though no Section 83(b) election had been made.
(d) For purposes of the exemptions authorized by Internal Revenue Code Section
151, a taxpayer who utilizes the provisions of Internal Revenue Code Section
152(e)(2), must similarly attach to his South Carolina income tax return a copy
of the written declaration of the custodial spouse releasing the exemption or
exemptions.
(e) Except as provided in subsection (o) of this section, if, as of January
1, 1985, a taxpayer is deducting the cost of personal property placed in service
prior to 1983, as provided in
Internal Revenue Code Section 168, the taxpayer is allowed for South Carolina
income tax purposes a similar annual deduction. At the expiration of the
deductions for federal tax purposes the balance of the deductible cost may be
deducted for South Carolina income tax purposes at the rate of fifty percent a
year, until the entire deductible cost has been deducted for South Carolina
income tax purposes. In no event may the deduction authorized by this subsection
exceed the taxpayer's depreciable basis.
(f) Except as provided in subsection (o) of this section, if, as of January
1, 1985, a taxpayer is deducting the cost of improvements to real property paid
or incurred prior to January 1, 1985, as provided in Internal Revenue Code
Section 168, the taxpayer is allowed for South Carolina income tax purposes a
similar annual deduction for the improvements. At the expiration of the
deductions for federal tax purposes the balance of the deductible cost may be
deducted for South Carolina income tax purposes at the rate of twenty percent a
year, until the entire deductible cost of the improvements has been deducted for
South Carolina income tax purposes. In no event may the deduction authorized by
this section exceed the taxpayer's depreciable basis.
(g) If prior to January 1, 1985, a taxpayer has made an election pursuant to
Internal Revenue Code Section 341(f), the election is effective for South
Carolina income tax purposes as though the election were made in a year that
South Carolina had a statute similar to Internal Revenue Code Section 341.
(h) If a taxpayer complies with the provisions of Internal Revenue Code
Section 367 for federal income tax purposes, then it is not necessary for the
taxpayer to seek the approval of the South Carolina Tax Commission, but it is
considered to have received the approval of the Commission so long as approval
is received from the Internal Revenue Service. A taxpayer utilizing the
provisions of Internal Revenue Code Section 367 shall attach to its next annual
income tax return a copy of the approval received from the Internal Revenue
Service.
(i) The provisions of Internal Revenue Code Section 383 are applicable to all
income tax credits available to a corporation for South Carolina income tax
purposes.
(j) Any incentive stock option issued under Internal Revenue Code Section 422A
is considered a qualified option or incentive stock option for South Carolina
income tax purposes whether or not granted before or after January 1, 1985.
(k) Any taxpayer who is reporting income or deducting expenses over a time
period as a result of a change of accounting method or accounting year, shall
continue to report income or deduct expenses in the manner provided in the
Internal Revenue Code and approved by the Internal Revenue Service. At the
expiration of the authorized adjustment period, the balance of the income or
expense must be reported or deducted in the same manner and amount for South
Carolina income tax purposes until all of the income or expenses have been fully
reported or deducted.
(1) Any election for federal income tax purposes automatically applies for
South Carolina income tax purposes and a taxpayer may not elect differently for
South Carolina income tax purposes.
(m) If a taxpayer is reporting income from the distribution from the
liquidation of a corporation under Internal Revenue Code Section 337 using the
installment method of reporting or from an installment sale under Internal
Revenue Code Section 453, and the taxpayer has previously reported all the gain
for South Carolina income tax purposes, then South Carolina taxable income must
be reduced by the amount of the installment gain. If a taxpayer has elected
installment sale reporting for South Carolina purposes and not federal purposes,
the taxpayer shall continue to report gain in his South Carolina tax return in
addition to income otherwise taxable.
(n) If prior to January 1, 1985, a taxpayer has maintained a vacation pay
accrual account as permitted by Internal Revenue Code Section 463, the taxpayer
shall use the provisions of subsection (w) of this section in order to establish
the reserve for South Carolina income tax purposes. If the taxpayer does not
elect to use the provisions of subsection (w), the taxpayer may establish a
vacation pay accrual account for South Carolina income tax purposes and is
allowed as additions to the reserve the amounts provided in Internal Revenue Code
Section 463.
(o) If a taxpayer has a higher basis in assets as the result of a taxable
corporate liquidation prior to January 1, 1985; or an exchange of property prior
to January 1, 1985, that qualified under Internal Revenue Code Section 1031, but
did not similarly qualify under Section 12-7-930, as in effect on December 31,
1984, as a result of the property received in the exchange not having a situs in
South Carolina; or as a result of electing Internal Revenue Code Section 179
prior to January 1, 1985; the taxpayer may continue to depreciate the assets, to
the extent depreciable, in the manner in which the assets were being depreciated
prior to January 1, 1985.
(p) If a taxpayer is subject to the provisions of Internal Revenue Code
Sections 483 or 1271 through 1288 as a result of a contract entered into prior
to 1985, then no recomputation of principal and income is required.
(q) Any organization described in Internal Revenue Code Sections 501 through
528 and 1381 having taxable income shall compute its tax using the rates set
forth in Section 12-7-230.
(r) For purposes of determining gain, the basis of an asset acquired prior to
January 1, 1921, is its fair market value on that date and not cost, if fair
market value was higher than cost.
(s) If a taxpayer has a capital loss carryover, as permitted by Internal
Revenue Code Section 1212, from a tax year prior to January 1, 1985, the taxpayer
is not allowed to deduct the capital loss carryover for South Carolina income tax
purposes.
(t) If for South Carolina income tax purposes a taxpayer utilizes the
provisions of Internal Revenue Code Section 1341 the phrase 'taxes paid in this
chapter' means taxes imposed by this Chapter.
(u) Except as hereinafter provided, all elections made under the provisions
of Internal Revenue Code Sections 1361 through 1378 automatically apply for South
Carolina purposes. If a taxpayer had a valid 'S' election in effect for federal
tax purposes prior to January 1, 1985, but has not elected that treatment for
South Carolina income tax purposes, the taxpayer may at its option continue to
be subject to the tax provided in Section 12-7-230 or it may affirmatively elect
in the manner described in Internal Revenue Code Section 1362 to be exempt from
the South Carolina tax. Once made, a South Carolina 'S' election may not be
revoked or terminated unless the 'S' election is similarly revoked or terminated
for federal income tax purposes. The approval of an 'S' election by the Internal
Revenue Service is approval for South Carolina income tax purposes as of the
effective date of the federal election. Any termination or revocation of an 'S'
election for federal purposes automatically revokes or terminates the election
for South Carolina income tax purposes as of the effective date of the federal
revocation or termination. An 'S' election can be made for South Carolina income
tax purposes only if it is made for federal purposes or there is an existing 'S'
election for federal purposes. No termination occurs under Internal Revenue Code
Section 1362(d)(3) for South Carolina income tax purposes unless a termination
similarly occurs for federal tax purposes. If Internal Revenue Code Section
1374(c) is effective for federal tax purposes, then the exception provided in the
section is similarly applicable whether or not an 'S' corporation meets the
requirements of Internal Revenue Code Section 1374(c) for South Carolina income
tax purposes. The rules of Internal Revenue Code Section 1378 concerning tax
year
changes do not apply for South Carolina income tax purposes unless the section
is similarly applicable for federal purposes (that is, a change in year is not
mandated for South Carolina income tax purposes unless mandated for federal
purposes also). A taxpayer shall give the Commission notice of its intent to be
an 'S' corporation by filing with the Commission a copy of the election it files
with the Internal Revenue Service although, the failure to file the notice does
not void the corporation's 'S' election for South Carolina tax purposes.
(v) If a taxpayer disposes of an asset that has a different South Carolina
basis and federal basis the taxpayer shall adjust South Carolina gain or loss to
reflect the difference in basis.
(w) If any taxpayer has different South Carolina and federal amounts of an
item of prepaid income or deferred expense or other similar balance sheet item
as of January 1, 1985, the taxpayer is entitled, at his option, to make an
application to the Commission for a change in accounting method and shall include
in the change of accounting method all items in paragraph (1) of this subsection
whether resulting in an increase or decrease in the transitional adjustment.
(1) items subject to adjustment are only those which:
(A) Have been treated differently in determining amounts subject to tax
under South Carolina and federal income tax laws which were applicable in a
period prior to January 1, 1985;
(B) Have been an element in determining South Carolina income subject to
tax in periods with respect to which South Carolina income tax was paid;
(C) Except for the required change in reporting income, would have
produced in a subsequent taxable period an adjustment to income subject to tax
on account of the differences in federal and South Carolina tax reporting.
(2) Items subject to adjustment may consist of deductions taken or not taken
in prior years, or amounts of income required to be included or excluded in such
years, but the items must be disregarded to the extent it can be shown that the
prior treatment of the items had no actual effect on the amount of South Carolina
income tax paid. In making the showing, no items other than the items subject
to this transitional adjustment may be considered.
(3) The net income reportable or net deduction allowable under this
subsection must be reported or deducted in equal amounts of one tenth each over
the first ten taxable periods ending after the approval of a change of accounting
method, except that if the net income or deduction is less than twenty-five
thousand dollars (A) the income is reportable in full in the first taxable period
ending after the approval of the change or (B) the income is deductible in the
first taxable period after the approval of the change to the extent of the
taxpayer's taxable income and to each taxable period thereafter to the extent not
previously taken in the earliest successive taxable period.
(x) Any net operating loss carryforward under Section 12-7-705 as in effect
on December 31, 1984, is allowed for South Carolina income tax purposes before
any loss carryforwards pursuant to Internal Revenue Code Section 172 as modified
by subparagraph 2 of item (d) of Section 12-7-430, but in no event is the same
loss deductible more than once.
(y) If for a tax year prior to the January 1, 1985, a taxpayer has previously
reported income on a South Carolina income tax return which was excluded from
federal taxable income as a result of Internal Revenue Code Sections 921 through
927 or Sections 970 through 997, the taxpayer may exclude from his South Carolina
taxable income the previously reported income for the year in which the income
is taxable for federal income tax purposes.
(z) For purposes of computing tax, a 'Head of Household' as defined in
Internal Revenue Code Section 2(b), shall use the rates provided in item (a) of
Section 12-7-210. For purposes of Internal Revenue Code Section 63(d), the 'Zero
Bracket Amount' for a 'Head of Household' as defined in Section 2(b) is the
maximum amount of taxable income on which no tax is paid in item (a) of Section
12-7-210."
Distribution to a nonresident beneficiary
SECTION 8. Section 12-9-310 of the 1976 Code, as last amended by Section 21,
Part II, of Act 512 of 1984, is further amended by adding a new item to read:
"(4) Making any distribution to a nonresident beneficiary of any estate
or trust shall withhold from the distribution seven percent of the beneficiary's
South Carolina taxable income attributable to the distribution. The amounts
withheld must be paid over each year to the Commission with the annual tax return
of the estate or trust. The nonresident beneficiary may claim the amount
withheld as a credit against any South Carolina income tax liability and shall
receive a refund of any excess."
Credit
SECTION 9. Article 5, Chapter 7, of Title 12 of the 1976 Code is amended by
adding:
"Section 12-7-618. For South Carolina income tax purposes, an individual
may claim a credit for expenses related to a dependent as provided in Internal
Revenue Code Section 21, except that the term 'applicable percentage' means seven
percent and is not reduced if a taxpayer's adjusted gross income exceeds ten
thousand dollars for a taxable year."
Accounting methods and periods
SECTION 10. Chapter 7 of Title 12 of the 1976 Code is amended by adding:
"Article 12
Accounting Methods and Periods
Section 12-7-1410. (a) A taxpayer's taxable year under this chapter must be the
same as his taxable year for federal income tax purposes.
(b) If a taxpayer's taxable year is changed for federal income tax purposes,
his taxable year for purposes of this chapter is similarly changed without
applying to the Commission, but the taxpayer must provide the Commission with a
copy of the written permission received from the Internal Revenue Service. If
a taxable year of less than twelve months results from a change of taxable year,
the South Carolina zero bracket amount and the South Carolina personal
exemptions must be prorated in a manner determined by the Commission.
(c) A taxpayer's method of accounting under this chapter must be the same as
his method of accounting for federal income tax purposes.
(d) (1) If a taxpayer's method of accounting is changed for federal income tax
purposes, his method of accounting for purposes of this chapter is similarly
changed without application to the Commission, but the taxpayer must provide the
Commission with a copy of the written permission received from the Internal
Revenue Service.
(2) If a taxpayer's method of accounting is changed in compliance with this
section, any additional income or deduction which results from adjustments
determined to be necessary solely by reason of the change must be included in
income or deducted from income as provided in the Internal Revenue Code."
Verification of information
SECTION 11. Article 13, Chapter 7, of Title 12 of the 1976 Code is amended by
adding:
"Section 12-7-1625. The Commission may require any taxpayer to provide it
with copies of any returns the taxpayer files with the Internal Revenue Service
and verify the information contained thereon."
Internal Revenue code sections specifically not adopted
SECTION 12. For purposes of Chapter 7, of Title 12 of the 1976 Code,
notwithstanding any other provisions contained in the Chapter, the following
enumerated Internal Revenue Code Sections are specifically not adopted:
(a) Sections 1(a) through (e), 3, 11, and 1201 relating to federal tax rates.
(b) Sections 21 through 52, 515, 853, 901 through 908, and 960 relating to
tax credits.
(c) Sections 55 through 58 relating to minimum taxes.
(d) Sections 78, 86, 87, 196, and 280C which are specifically excluded by
Section 12-7-430 of the 1976 Code.
(e) Sections 72(m)(5)(B), 72(o), and 72(q) relating to penalty taxes on
certain retirement plan distributions.
(f) Section 172(b)(1) relating to net operating loss carrybacks.
(g) Sections 531 through 565 relating to certain special taxes on
corporations.
(h) Sections 581, 582, and 585 through 597 relating to the taxation of banking
institutions.
(i) Sections 665 through 668 relating to taxation of certain accumulation
distributions from trusts.
(j) Sections 801 through 845 relating to the taxation of insurance companies.
(k) Sections 861 through 912 and 931 through 971 relating to the taxation of
foreign income.
(l) Sections 1301 through 1305 relating to income averaging.
(m) Sections 1401 through 1494 relating to various miscellaneous provisions.
(n) Sections 1501 through 1505 related to consolidated tax returns.
(o) Sections 2001 through 7655, 7801 through 7871, and 8001 through 9602.
Credit
SECTION 13. Subsection (1) of Section 12-7-2418, of the 1976 Code, as added by
Act 512 of 1984, Part II, Section 9, Division III(I)(1), is amended to read:
"(1) Any resident individual who was domiciled in this State for the
entire applicable tax year and who, during that year, was not in the custody of
a state or federal penal, mental health, or retardation institution, required by
law to file and who has filed a South Carolina Income Tax return is allowed a
credit against taxes due under Section 12-7-210 equal to the amount of twelve
dollars and fifty cents for the taxpayer, and the taxpayer's spouse if they file
a joint tax return and for any dependent for which the taxpayer claims an
exemption on his federal income tax return pursuant to Section 151(d) of the
Internal Revenue Code as defined in item (11) of Section 12-7-20. If a taxpayer
claims the credit for a dependent on his South Carolina income tax return, the
dependent may not claim the credit on any South Carolina income tax return the
dependent is required to file. If the amount of the credit exceeds the income
taxes otherwise due on the taxpayer's income or if there are no South Carolina
income taxes due on the taxpayer's income, the amount of the credit not used as
an offset against income taxes, after certification by the Commission, must be
paid to the taxpayer by the State Treasurer from the state general fund. No
interest is allowed on any payment made to a taxpayer pursuant to this
section."
Deduction
SECTION 14. Subsections (E), (F), (G), and (H) of item (4) of Section 12-9-10
of the 1976 Code, as added by Section 1 of Act 372 of 1984, are respectively
amended to read:
"(E) for a payment to a self-employed retirement fund (Keogh Plans) or to
an individual retirement account or program as permitted under the IRC as defined
in item (11) of Section 12-7-20 if, at the time of the payment, it is reasonable
to believe that the employee is entitled to a deduction under the section for the
payment;
(F) for premiums on group-term life insurance on the life of an employee that
are not included in South Carolina taxable income as defined in Article 4,
Chapter 7, of Title 12;
(G) to or on behalf of an employee for moving expenses if the renumeration is
not included in South Carolina taxable income as defined in Article 4, Chapter
7, of Title 12;
(H) to or under an employee benefit plan not included in South Carolina
taxable income as defined in Article 4, Chapter 7, of Title 12;".
Exemption
SECTION 15. Item (2) of Section 12-9-110 of the 1976 Code, as amended by Section
2 of Act 372 of 1984, is further amended to read:
"(2) One additional exemption for himself if, on the basis of facts
existing at the beginning of the day, there may reasonably be expected to be
allowed an exemption under Internal Revenue Code Section 151(c) and (d) as
defined in item (11) of Section 12-7-20;".
Requirements of full-time students
SECTION 16. Section 12-9-315 of the 1976 Code, as amended by Section 7 of Act
372 of 1984, is further amended to read:
"Section 12-9-315. An employee who certifies that he meets the requirements
of a full-time student at a bona fide educational institution and further
certifies that he anticipates no income tax liability for the current year may
request waiver of the withholding requirements set forth in item (1) of Section
12-9-310."
Property exempt from federal income tax
SECTION 17. The unnumbered item added to subsection B of Section 12-37-220 of
the 1976 Code added by Act 39 of 1981, is amended to read:
"(25) All personal property loaned or leased on a nonprofit basis to a
state agency, county, municipality, or other political subdivision, or to an
organization exempt from federal income tax under Internal Revenue Code Sections
501 through 514 as defined in item (11) of Section 12-7-20, for at least thirty
days during the tax year, so long as such personal property is used solely for
the purpose of public display and not for the use of such state agency, county,
municipality, or other political subdivision, or exempt organization."
Definition
SECTION 18. Item (e) of Section 21-37-20 of the 1976 Code is amended to read:
"(e) 'Retirement plan' means a defined benefit plan, defined contribution
plan, self-employed retirement plan, individual retirement account, or simplified
employee pension plan, as provided in the Internal Revenue Code as defined in
item (11) of Section 12-7-20 and any other type of employee benefit plan."
Definition
SECTION 19. Item (p) of Section 3 of Act 76 of 1977, as last amended by Section
2 of Act 283 of 1982, is amended to read:
"(p) 'Persons and families of moderate to low income' means those
individuals who are members of households whose gross income falls between
seventy-five percent and one hundred fifty percent of the 'median gross income'
of all households in South Carolina as determined on the basis of the latest
available statistics furnished to the Authority by the Divison of Research and
Statistical Services of the State Budget and Control Board. Gross income means
income derived from any source whatsoever. An allowance for each member of the
family equal to an amount for personal exemptions as defined by Internal Revenue
Code Section 151, as defined in item (11) of Section 12-7-20, must be deducted
from gross income in order to qualify a person or family as a member of the
'beneficiary class'."
Definition
SECTION 20. Item 9 of Section 46-47-20 of the 1976 Code is amended to read:
"9. 'Farmers and farm families of low and moderate income' means those
farmers and households engaged in farming on a family farm from which their
adjusted gross income is less than or falls between seventy-five and one hundred
and twenty-five percent of the 'median gross income' of all households in South
Carolina as determined on the basis of the latest available statistics furnished
to the authority by the Division of Research and Statistical Services of the
State Budget and Control Board. Adjusted gross income is defined as in the
Internal Revenue Code as defined in item (11) of Section 12-7-20. A deduction
for each member of the family equal to an amount for personal exemptions as
defined by Internal Revenue Code Section 151, as defined in item (11) of Section
12-7-20 is allowed in order to qualify a person or family as a member of the
'beneficiary class'."
Tax Commission may issue rules and promulgate regulations
SECTION 21. To carry out the purposes of the South Carolina Income Tax Federal
Conforming Amendments of 1985, the South Carolina Tax Commission may issue rules
and promulgate regulations necessary to implement the adoption of the Internal
Revenue Code provisions adopted by this act.
Repeal
SECTION 22. Sections 12-7-90, 12-7-211, 12-7-220, 12-7-260, 12-7-270, 12-7-280,
12-7-285, 12-7-300, 12-7-310, 12-7-320, 12-7-330, 12-7-510, 12-7-520, 12-7-530,
12-7-535, 12-7-540, 12-7-550, 12-7-560, 12-7-580, 12-7-600, 12-7-610, 12-7-660,
12-7-670, 12-7-680, 12-7-685, 12-7-690, 12-7-700, 12-7-705, 12-7-710, 12-7-720,
12-7-730, 12-7-740, 12-7-750, 12-7-760, and 12-7-770, all of the 1976 Code, are
repealed. Articles 7 and 11 of Chapter 7 of Title 12 of the 1976 Code are
repealed. Section 23, Part II, of Act 517 of 1980 and Act 424 of 1978 are
repealed.
Provisions effective
SECTION 23. The provisions of the South Carolina Income Tax Federal Conforming
Amendments of 1985 are effective for tax years beginning after December 31, 1984.
Time effective
SECTION 24. This act shall take effect upon approval by the Governor. |