H 4854 Session 112 (1997-1998)
H 4854 General Bill, By Boan and R. Smith
A BILL TO AMEND TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO
TAXATION, BY ADDING SECTION 12-45-420 SO AS TO ALLOW A COUNTY TREASURER TO
WAIVE OR REDUCE TAX PENALTIES, BUT NO INTEREST; BY ADDING SECTION 12-49-85 SO
AS TO PROVIDE A PROCEDURE FOR REMOVAL OF UNCOLLECTIBLE AD VALOREM PROPERTY
TAXES FROM THE PROPERTY TAX LIST; TO AMEND SECTION 12-37-251, AS AMENDED,
RELATING TO THE HOMESTEAD EXEMPTION FROM PROPERTY TAXATION, SO AS TO DELETE
THE LIMIT ON THE REASSESSMENT MILLAGE RATE FOR REAL AND PERSONAL PROPERTY; TO
AMEND SECTION 12-43-220, AS AMENDED, RELATING TO ASSESSMENT RATIOS FOR
PROPERTY TAXATION, SO AS TO REQUIRE THE RECORDING OF A CONTRACT OF SALE WHEN
THE FOUR PERCENT ASSESSMENT RATE ON A LEGAL RESIDENCE IS CLAIMED PURSUANT TO A
CONTRACT OF SALE; TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME
LIMITS ON ASSESSMENT OF TAXES AND FEES, SO AS TO ESTABLISH THAT PROPERTY TAX
ASSESSMENT OCCURS ON THE LATER OF THE LAST DAY THE TAX MAY BE PAID OR THE DATE
OF THE TAX NOTICE; TO AMEND SECTION 12-60-2520, RELATING TO A TAXPAYER'S
WRITTEN REQUEST TO MEET WITH THE ASSESSOR, SO AS TO REQUIRE CORRECTION OF THE
ASSESSMENT UPON DETERMINATION THAT TAXPAYER'S WRITTEN REQUEST IS MERITORIOUS;
TO AMEND SECTION 12-60-2550, RELATING TO APPEAL OF AN ASSESSMENT, SO AS TO
ESTABLISH AN INTEREST RATE OF ONE-HALF OF ONE PERCENT EACH MONTH TO BE
COLLECTED IN SPECIFIED CIRCUMSTANCES; TO AMEND SECTION 12-60-2910, AS AMENDED,
RELATING TO A TAXPAYER'S REQUEST TO MEET WITH THE AUDITOR, SO AS TO FURTHER
PROVIDE FOR WHEN THE OBJECTION TO THE TAX AND A REQUEST FOR A MEETING WITH THE
AUDITOR MUST BE MADE; AND TO REPEAL SECTION 12-43-225 RELATING TO APPLICATIONS
FOR SPECIAL ASSESSMENT RATIOS AND SECTION 12-49-80 RELATING TO COLLECTION OF
BACK TAXES BY THE STATE WITHIN TEN YEARS OF THEIR DUE DATE.
03/19/98 House Introduced and read first time HJ-60
03/19/98 House Referred to Committee on Ways and Means HJ-61
04/08/98 House Committee report: Favorable with amendment Ways
and Means HJ-44
04/15/98 House Amended HJ-79
04/15/98 House Debate interrupted HJ-81
04/16/98 House Objection by Rep. Sheheen, Scott, Miller, Battle,
Witherspoon, Spearman, Cave, Govan & Inabinett HJ-19
04/16/98 House Requests for debate-Rep(s). Harrell, Klauber,
Hawkins, Woodrum, Easterday, Leach, Hamilton,
Campsen, Vaughn, & R. Smith & Knotts HJ-19
04/21/98 House Amended HJ-64
04/21/98 House Debate interrupted HJ-70
04/22/98 House Debate adjourned until Tuesday, April 28, 1998 HJ-21
04/29/98 House Debate adjourned until Thursday, April 30, 1998 HJ-50
04/30/98 House Recommitted to Committee on Ways and Means HJ-25
Indicates Matter Stricken
Indicates New Matter
AMENDED--NOT PRINTED IN THE HOUSE
Amendment No. 1--P:\AMEND\DKA\4886MM.98
Amendment No. 2--P:\AMEND\PT\1874MM.98
Amendment No. 5--P:\AMEND\DKA\4907MM.98
Amendment No. 6--P:\AMEND\DKA\4927MM.98
April 21, 1998
H. 4854
Introduced by Reps. Boan and R. Smith
S. Printed 4/8/98--H.
Read the first time March 19, 1998.
THE COMMITTEE ON WAYS AND MEANS
To whom was referred a Bill (H. 4854), to amend Title 12, Code of
Laws of South Carolina, 1976, relating to taxation, etc., respectfully
REPORT:
That they have duly and carefully considered the same, and
recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking SECTION 1 in its
entirety.
Amend further, Section 12-60-2910(A)(2), SECTION 8, page 5,
line 13, by inserting after /be/ on line 13 / timely /.
When amended the item reads:
/ (2) last day the tax levied upon the assessment may be timely
paid./
Renumber sections to conform.
Amend title to conform.
Amend the bill, as and if amended, by adding an appropriately
numbered SECTION to read:
/SECTION __. A. Article 5, Chapter 37, Title 12 of the 1976
Code is amended by adding:
"Section 12-37-717. Notwithstanding any other provision of
law, when a certificate of occupancy or other evidence of completion
is issued on new construction designated for owner-occupied legal
residential use, the use and value of the property which is the subject
of the certificate are considered to have changed effective on the date
the certificate is issued. The property tax on the property for the tax
year the certificate is issued must be prorated using the value and
owner-occupied legal residential use of the property for each part of
the year."
B. Section 12-37-717 takes effect upon approval by the Governor
for tax years beginning after December 31, 1999./
Renumber sections to conform.
Amend title to conform.
HENRY E. BROWN, JR., for Committee.
STATEMENT OF ESTIMATED FISCAL
IMPACT
This bill would have no impact on state revenue. Sections 1 and 7
of this bill would reduce local property tax revenue by a negligible
amount due to the potential waiving of penalties and lower interest
rate imposed on unpaid taxes. This reduction in revenue would be
partially offset by reduced interest paid by the county on over
payments.
SECTION 1. Provides that the county treasurer may waive or reduce
penalties.
SECTION 2. Provides a mechanism to allow counties to write off
uncollectible taxes when there is no property to levy
on. A provision to allow this was inadvertently
repealed.
SECTION 3. Language in Title 6 superseded the first sentence of
this section. This will not eliminate the rollback
millage provision.
SECTION 4. Allows the assessment for legal residences to apply
under contracts for sale.
SECTION 5. Clarifies the definition of assessment of the tax to
make it consistent with the other statutory language.
SECTION 6. Clarifies that no conference is necessary if assessor
agrees with the taxpayer concerning questions on
assessments.
SECTION 7. Provides that the rate of interest paid and collected in
regard to this section must be one-half of one percent
per month. This eases the burden on the interest
calculation by the counties.
SECTION 8. Allows for the appeal of a personal property
assessment or the denial of a homestead exemption
request at the later of thirty days after the notice is
mailed or the last day the taxes may be paid.
SECTION 9. Repeals provisions contained elsewhere in the statutes.
Approved By:
William C. Gillespie
Board of Economic Advisors
A BILL
TO AMEND TITLE 12, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO TAXATION, BY ADDING
SECTION 12-45-420 SO AS TO ALLOW A COUNTY
TREASURER TO WAIVE OR REDUCE TAX PENALTIES, BUT
NOT INTEREST; BY ADDING SECTION 12-49-85 SO AS TO
PROVIDE A PROCEDURE FOR REMOVAL OF
UNCOLLECTIBLE AD VALOREM PROPERTY TAXES FROM
THE PROPERTY TAX LIST; TO AMEND SECTION 12-37-251,
AS AMENDED, RELATING TO THE HOMESTEAD
EXEMPTION FROM PROPERTY TAXATION, SO AS TO
DELETE THE LIMIT ON THE REASSESSMENT MILLAGE
RATE FOR REAL AND PERSONAL PROPERTY; TO AMEND
SECTION 12-43-220, AS AMENDED, RELATING TO
ASSESSMENT RATIOS FOR PROPERTY TAXATION, SO AS
TO REQUIRE THE RECORDING OF A CONTRACT OF SALE
WHEN THE FOUR PERCENT ASSESSMENT RATE ON A
LEGAL RESIDENCE IS CLAIMED PURSUANT TO A
CONTRACT OF SALE; TO AMEND SECTION 12-54-85, AS
AMENDED, RELATING TO TIME LIMITS ON ASSESSMENT
OF TAXES AND FEES, SO AS TO ESTABLISH THAT
PROPERTY TAX ASSESSMENT OCCURS ON THE LATER OF
THE LAST DAY THE TAX MAY BE PAID OR THE DATE OF
THE TAX NOTICE; TO AMEND SECTION 12-60-2520,
RELATING TO A TAXPAYER'S WRITTEN REQUEST TO MEET
WITH THE ASSESSOR, SO AS TO REQUIRE CORRECTION OF
THE ASSESSMENT UPON DETERMINATION THAT
TAXPAYER'S WRITTEN REQUEST IS MERITORIOUS; TO
AMEND SECTION 12-60-2550, RELATING TO APPEAL OF AN
ASSESSMENT, SO AS TO ESTABLISH AN INTEREST RATE OF
ONE-HALF OF ONE PERCENT EACH MONTH TO BE
COLLECTED IN SPECIFIED CIRCUMSTANCES; TO AMEND
SECTION 12-60-2910, AS AMENDED, RELATING TO A
TAXPAYER'S REQUEST TO MEET WITH THE AUDITOR, SO
AS TO FURTHER PROVIDE FOR WHEN THE OBJECTION TO
THE TAX AND A REQUEST FOR A MEETING WITH THE
AUDITOR MUST BE MADE; AND TO REPEAL SECTION
12-43-225 RELATING TO APPLICATIONS FOR SPECIAL
ASSESSMENT RATIOS AND SECTION 12-49-80 RELATING TO
COLLECTION OF BACK TAXES BY THE STATE WITHIN TEN
YEARS OF THEIR DUE DATE.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 12-49-85. (A) If the person officially charged with
the collection of ad valorem taxes on real or personal property for a
county determines that the tax, assessment, or penalty is
uncollectible, he shall record that determination and the reason for it
on a list he maintains. At least annually he shall provide the list to
the county auditor, who may remove a particular determination from
the duplicate list, but the auditor shall record the removal and the
reason for it as prescribed by the Comptroller General.
(B) The reasons for removal of a tax, assessment, or penalty from
the duplicate list may include, but are not limited to:
(1) insufficient property of the person charged with the
uncollectible tax, assessment, or penalty to collect it;
(2) collection of the tax, assessment, or penalty has been
enjoined by a competent court.
(C) Subject to the provisions of Section 12-54-85(E), the auditor
and the person officially charged with the collection of ad valorem
taxes shall review the list annually. If it is later determined that the
tax, assessment, or penalty was improperly removed from the
duplicate list or is collectible, it must be returned to the duplicate list
for collection, with all penalties and interest accruing."
SECTION 2. Section 12-37-251(E) of the 1976 Code, as last
amended by Act 401 of 1996, is further amended to read:
"(E) In the year of reassessment the millage rate for all
real and personal property must not exceed the rollback millage,
except that the rollback millage may be increased by the percentage
increase in the consumer price index for the year immediately
preceding the year of reassessment. Rollback millage is
calculated by dividing the prior year property tax revenues by the
adjusted total assessed value applicable in the year the values derived
from a countywide equalization and reassessment program are
implemented. This amount of assessed value must be adjusted by
deducting assessments added for property or improvements not
previously taxed, for new construction, and for renovation of existing
structures."
SECTION 3. Section 12-43-220(c) of the 1976 Code, as last
amended by Act 431 of 1996, is further amended by adding:
"(5) To qualify for the four percent assessment ratio, the
owner-occupant of a legal residence that is being purchased under a
contract for sale or a bond for title must record the contract for sale
or the bond for title in the office of the register of mesne conveyances
or the clerk of court in those counties where the office of the register
of mesne conveyances has been abolished.
For purposes of this subsection, a contract for sale or a bond for title
is the sale of real property by a seller, who finances the sale and
retains title to the property solely as security for the debt."
SECTION 4. Section 12-54-85(E) of the 1976 Code is amended to
read:
"(E) No A tax may not be collected
by levy, warrant for distraint, or proceedings in court, unless
the:
(1) the levy, warrant for distraint, or proceedings in
court were begun within ten years after the assessment of the
tax,;
(2) the taxpayer has agreed to extend this
period,; or
(3) the running of this period is suspended in accordance
with this section.
For property tax purposes, the 'assessment of the tax' occurs on
the later of the last day the tax may be paid without penalty or the
date of the tax notice."
SECTION 5. Section 12-60-2520(B) of the 1976 Code, as added
by Act 60 of 1995, is amended to read:
"(B) Within thirty days of the date of the request for a
meeting or as soon thereafter as practical, If, upon
examination of the property taxpayer's written objection, the county
assessor agrees with the taxpayer, the county assessor must correct
the error. If, upon the examination, the county assessor does not
agree with the taxpayer, the assessor shall schedule a conference
with the property taxpayer within thirty days of the date of the
request for a meeting or as soon after that as practical. If the
matter is not resolved at the conference, the assessor shall advise the
property taxpayer of the right to protest and provide the taxpayer a
form on which to file the protest. The property taxpayer has thirty
days after the date of the conference to file a written protest with the
assessor. The protest must contain:
(1) the name, address, and telephone number of the property
taxpayer;
(2) a description of the property in issue;
(3) a statement of facts supporting the taxpayer's position;
(4) a statement outlining the reasons for the appeal, including
any law or other authority, upon which the taxpayer relies; and
(5) the value and classification which the property taxpayer
considers the fair market value, special use value, if applicable, and
the proper classification.
The taxpayer may use the form prepared by the department, but use
of the form is not mandatory."
SECTION 6. Section 12-60-2550(B) and (C) of the 1976 Code, as
added by Act 60 of 1995, is amended to read:
"(B) After final review of the protest or appeal, if the
property tax assessment is greater than the adjusted property tax
assessment, a corrected property tax assessment must be made and
entered. Interest determined in accordance with Section 12-54-25
must be collected in the same manner as the tax, except the rate
of interest must be one-half of one percent for each month or portion
of a month.
(C) After final review of the protest or appeal, if the property tax
assessment is less than the adjusted property tax assessment, a
corrected property tax assessment must be made and entered. The
overpayment of tax must be refunded together with interest
determined in accordance with Section 12-54-25, except the rate
of interest must be one-half of one percent for each month or portion
of a month."
SECTION 7. Section 12-60-2910(A) of the 1976 Code, as last
amended by Act 431 of 1996, is further amended to read:
"(A) A property taxpayer may object to a personal property
tax assessment or a denial of a homestead exemption made by the
county auditor by requesting, in writing, to meet
with the auditor at any time on or before the last day the tax
levied upon the assessment can be timely paid later of:
(1) thirty days after the tax notice is mailed; or
(2) last day the tax levied upon the assessment may be timely
paid."
SECTION 8. Sections 12-43-225 and 12-49-80 of the 1976 Code
are repealed.
SECTION 9. A. Article 5, Chapter 37, Title 12 of the 1976 Code
is amended by adding:
"Section 12-37-717. Notwithstanding any other provision of
law, when a certificate of occupancy or other evidence of completion
is issued on new construction designated for owner-occupied legal
residential use, the use and value of the property which is the subject
of the certificate are considered to have changed effective on the date
the certificate is issued. The property tax on the property for the tax
year the certificate is issued must be prorated using the value and
owner-occupied legal residential use of the property for each part of
the year."
B. Section 12-37-717 takes effect upon approval by the Governor
for tax years beginning after December 31, 1999.
SECTION 10. A. Chapter 51, Title 12 of the 1976 Code is amended
by adding:
"Section 12-51-180. (A)(1) Notwithstanding any other
provision of law, the successful bidder at the delinquent tax sale of
an owner-occupied residential property assessed at the four percent
ratio for a legal residence, pursuant to Section 12-43-220(c), shall pay
legal tender on the day of the sale to the person officially charged
with the collection of delinquent taxes in the amount of unpaid
property taxes, assessments, penalties, costs, and taxes levied for the
year in which the redemption period begins. The balance of the bid
amount is due when the redemption period expires and before
execution and delivery of the tax title as provided in subsection (D).
Upon payment, the person officially charged with the collection of
delinquent taxes shall furnish the purchaser a receipt for the sums
paid and attach a copy of the receipt to the execution with the
endorsement of his actions which must be retained by him.
(2) Expenses of the sale must be paid first and the balance of all
delinquent tax sale monies collected must be turned over to the
treasurer. Upon receipt of the funds, the treasurer immediately shall
mark the public tax records regarding the property sold as follows:
Paid by tax sale held on (insert date). All other monies received must
be retained, paid out, and accounted for by the delinquent tax
collector.
(3) Once a tax deed has been issued as provided in subsection
(D), the defaulting taxpayer must be notified in writing by the
delinquent tax collector of any excess due the taxpayer. The notice
must be addressed and mailed to the defaulting taxpayer in the
manner provided in Section 12-51-40(b) for taking exclusive
possession of real property. Expenses of providing this notice are
considered costs of the sale for purposes of determining the amount,
if any, of the excess.
(B)(1) The defaulting taxpayer, a grantee from the owner, or a
mortgage or judgment creditor may within twelve months from the
date of the delinquent tax sale redeem an item of real estate which is
owner-occupied residential property assessed at the four percent ratio
for a legal residence by paying to the person officially charged with
the collection of delinquent taxes a sum equal to all taxes,
assessments, penalties, and costs.
(2) The defaulting taxpayer also shall pay to the person
officially charged with the collection of delinquent taxes a sum equal
to eight percent interest on the amount actually remitted by the
successful bidder on the day of the sale to the official, to include
unpaid property taxes, assessment, penalties, costs, and taxes levied
for the year in which the redemption period begins, pursuant to
subsection (A).
(3) If, before the expiration of the redemption period, the
purchaser assigns his interest in real property which is
owner-occupied residential property assessed at the four percent ratio
for a legal residence and purchased at a delinquent tax sale, the
grantee from the successful bidder shall furnish the person officially
charged with the collection of delinquent taxes a conveyance,
witnessed and notarized. The person officially charged with the
collection of delinquent taxes shall replace the successful bidder's
name and address with the grantee's name and address in the
delinquent tax sale book.
(C) Upon redemption of the real estate which is owner-occupied
residential property assessed at the four percent ratio for a legal
residence pursuant to Section 12-43-220(c), the person officially
charged with the collection of delinquent taxes shall cancel the sale
in the tax sale book and note on it the amount paid, by whom, and
when. The successful purchaser at the delinquent tax sale must be
notified promptly by mail to return the tax sale receipt to the person
officially charged with the collection of delinquent taxes in order to
be expeditiously refunded the sums paid pursuant to subsection (A).
(D)(1) Upon failure of the defaulting taxpayer, a grantee from the
owner, or a mortgage or judgment creditor, to redeem realty which is
owner-occupied residential property assessed at the four percent ratio
for a legal residence within the time period allowed for redemption,
the person officially charged with the collection of delinquent taxes,
within thirty days or as soon after that as possible, shall collect the
balance of the bid amount from the successful bidder and make a tax
title to the purchaser or the purchaser's assignee. Delivery of the tax
title to the clerk of court or register of deeds is considered 'putting the
purchaser or assignee in possession'.
(2) The tax title must include, among other things, the name of
the defaulting taxpayer, the date of the execution, the date the realty
was posted and by whom, and the dates each certified notice was
mailed to the party or parties of interest, to whom mailed and whether
or not received by the addressee.
(3) The successful purchaser or assignee is responsible in the
amount of fifteen dollars for the cost of the tax title plus documentary
stamps necessary to be affixed and recording fees. The successful
purchaser or assignee shall pay the amounts to the person officially
charged with the collection of delinquent taxes before delivery of the
tax title to the clerk of court or register of deeds and upon payment,
the person officially charged with the collection of delinquent taxes
is responsible for promptly transmitting the tax title to the clerk of
court or register of deeds for recording and remitting the recording
fee and documentary stamps cost.
(4) If the tax sale of an item produces an overage in cash above
the full amount due in taxes, assessments, penalties, and costs, the
overage belongs to the defaulting taxpayer to be claimed or assigned
according to law. If neither claimed nor assigned within five years of
date of public auction tax sale, the overage escheats to the general
fund of the governing body. Before the escheat date unclaimed
overages must be kept in a separate account and invested so as not to
be idle, and the governing body of the political subdivision retains
the earnings for keeping the overage. On escheat date the overage
must be transferred to the general funds of the governing body.
(5) If the successful bidder fails to remit the balance of the bid
amount within the thirty-day period described in subsection (D)(1),
the amount paid on the day of the sale, including unpaid property
taxes, assessments, penalties, costs, and taxes levied for the year in
which the redemption period begins, as described in Section
12-51-60, escheats to the general fund of the governing body. The
amount must be applied promptly to the delinquent amount owed by
the defaulting taxpayer, and the defaulting taxpayer may redeem the
item of real estate within twelve months from the date of the
application of the sums paid on the day of the sale to the delinquent
amount owed by the defaulting taxpayer. Redemption must be
effected in the same manner as described in Section
12-57-90(B)."
B. This section takes effect upon approval by the Governor.
SECTION 11. Section 12-6-3360(m)(2), (6), (10), and (13) of the
1976 Code, as last amended by Act 143 of 1997, is further amended
to read:
"(2) 'Appropriate agency' means the Department of
Revenue, for corporations subject to tax under Section 12-6-530
and the Department of Insurance for corporations subject to the
premium tax under Chapter 7 of Title 38 except that for
taxpayers subject to the premium tax imposed by Chapter 7 of Title
38 it means the Department of Insurance.
(6) 'Processing facility' means an establishment engaged in
services such as manufacturing-related, computer-related,
communication-related, energy-related, or transportations-related
services, but the term 'processing facility' does not include an
establishment where retail sales of that prepares, treats, or
converts tangible personal property or services are made to
retail customers into finished goods or another form of
tangible personal property. The term also includes a
business entity engaged in processing agricultural, aquacultural, or
maricultural products. It does not include a facility where retail
sales of tangible personal property are made to retail customers.
(10) 'Corporate office facility' means the location where
corporate managerial, professional, technical, and administrative
personnel are domiciled and employed, and where corporate
financial, personnel, legal, technical, support services, and other
business functions are handled. Support services include, but are not
limited to, claims processing, date entry, word processing, sales order
processing, and telemarketing. The term does not include an
establishment where retail sales of tangible personal property or retail
services are made to retail customers except for a facility which
processes customer sales orders by mail, telephone, or electronic
means, if the facility also processes shipments of tangible personal
property to customers and if at least seventy-five percent of the dollar
amount of goods sold through the facility are sold to customers
outside of this State a corporate headquarters that meets the
definition of a 'corporate headquarters' contained in Section
12-6-3410(J)(1).
(13) 'Qualifying service-related facility' means:
(a) an establishment engaged in an activity or activities listed
under the Standard Industrial Classification (SIC) Code 80 according
to the Federal Office of Management and Budget Standard Industrial
Classification Manual, 1987 edition; or,
(b) a business, for which over fifty percent of the
gross receipts are from providing services, as opposed to
manufacturing or selling or dealing in tangible personal property and
which creates at least two hundred fifty jobs at a single location
other than a business engaged in legal, accounting, or investment
services or retail sales, which has a net increase of at least:
(i) two hundred fifty jobs at a single location;
(ii) one hundred twenty-five jobs at a single location and the
jobs have an average cash compensation level of more than one and
one-half times the per capita income in the county where the jobs are
located at the time the jobs are filled;
(iii) seventy-five jobs at a single location and the jobs have an
average cash compensation level of more than twice the per capita
income in the county where the jobs are located at the time the jobs
are filled; or
(iv) thirty jobs at a single location and the jobs have an average
cash compensation level of more than two and one-half times the per
capita income in the county where the jobs are located at the time the
jobs are filled.
The per capita income for each county is determined by using the
most recent data available from the Board of Economic Advisors.
Determination of the required number of jobs is in accordance with
the monthly average described in subsection (F)."
SECTION 12. Section 1 of this act takes effect upon approval by
the Governor. The remaining sections of this act are effective for
property tax years beginning after December 31, 1998.
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