H*4850 Session 112 (1997-1998)
H*4850(Rat #0520, Act #0387 of 1998) General Bill, By Boan
A BILL TO AMEND SECTION 12-8-570, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO WITHHOLDING OF A PORTION OF TRUST DISTRIBUTION TO A NONRESIDENT
BENEFICIARY FOR TAX PURPOSES, SO AS TO EXEMPT ALSO DISTRIBUTIONS TO A
NONRESIDENT BENEFICIARY WHO IS EXEMPT FROM TAXATION UNDER SECTION 501 OF THE
INTERNAL REVENUE CODE AND A NONRESIDENT BENEFICIARY WHO SUBMITS TO THIS
STATE'S JURISDICTION FOR DETERMINING TAX LIABILITY; TO AMEND SECTION 12-8-580,
RELATING TO WITHHOLDING OF A PORTION OF THE PURCHASE PRICE BY A BUYER WHEN THE
SELLER IS A NONRESIDENT, SO AS TO FURTHER PROVIDE FOR THE PROPERTY WHICH IS
SUBJECT TO THE WITHHOLDING REQUIREMENTS; TO AMEND SECTION 12-8-1030, RELATING
TO AN INCORRECT WITHHOLDING EXEMPTION CERTIFICATE, SO AS TO ESTABLISH
PROCEDURES FOR THE EMPLOYER, EMPLOYEE, AND DEPARTMENT OF REVENUE FOR
DETERMINATION OF THE CORRECT NUMBER OF EXEMPTIONS AND APPEAL OF THAT
DETERMINATION AND TO GIVE EMPLOYERS UNTIL MARCH 31, 1999, TO COMPLY; TO AMEND
SECTION 12-54-40, AS AMENDED, RELATING TO PENALTIES IN CONNECTION WITH A
WRONGFUL CLAIM OF WITHHOLDING EXEMPTIONS, SO AS TO CHANGE THE REFERENCE TO
CHAPTER 8 INSTEAD OF CHAPTER 9, TO INCREASE THE MAXIMUM FINE TO ONE THOUSAND
DOLLARS, AND TO MAKE THE OFFENSE TRIABLE IN MAGISTRATE'S COURT; TO AMEND
SECTION 12-54-46, RELATING TO THE FILING OF A FALSE WITHHOLDING EXEMPTION
CERTIFICATE, SO AS TO DELETE THE MAXIMUM LIMIT ON THE FINE; AND TO REPEAL
SECTION 12-54-45 RELATING TO THE PENALTY FOR SUPPLYING AN EMPLOYER WITH FALSE
OR FRAUDULENT INFORMATION AS TO THE NUMBER OF EXEMPTIONS; TO AMEND SECTION
12-21-4020, AS AMENDED, RELATING TO CLASSES OF BINGO LICENSES, SO AS TO ALLOW
CERTAIN CLASS D LICENSEES TO USE HARD BINGO CARDS; AND TO AMEND SECTION
12-21-4090, RELATING TO BINGO CHECKING AND SAVINGS ACCOUNTS, SO AS TO EXCEPT
THE HOLDER OF A CLASS D FAIR LICENSE.-AMENDED TITLE
03/19/98 House Introduced and read first time HJ-57
03/19/98 House Referred to Committee on Ways and Means HJ-58
04/08/98 House Committee report: Favorable Ways and Means HJ-15
04/14/98 House Read second time HJ-31
04/15/98 House Read third time and sent to Senate HJ-21
04/21/98 Senate Introduced and read first time SJ-24
04/21/98 Senate Referred to Committee on Finance SJ-24
05/20/98 Senate Recalled from Committee on Finance SJ-17
05/26/98 Senate Read second time SJ-47
05/26/98 Senate Ordered to third reading with notice of
amendments SJ-47
06/02/98 Senate Amended SJ-62
06/02/98 Senate Read third time and returned to House with
amendments SJ-62
06/04/98 House Concurred in Senate amendment and enrolled HJ-15
06/10/98 Ratified R 520
06/15/98 Signed By Governor
06/23/98 Effective date 06/15/98, except Section 3, which
takes effect 10/1/98
06/23/98 Copies available
06/30/98 Act No. 387
(A387, R520, H4850)
AN ACT TO AMEND SECTION 12-8-570, CODE OF LAWS OF
SOUTH CAROLINA, 1976, RELATING TO WITHHOLDING OF A
PORTION OF A TRUST DISTRIBUTION TO A NONRESIDENT
BENEFICIARY FOR TAX PURPOSES, SO AS TO EXEMPT ALSO
DISTRIBUTIONS TO A NONRESIDENT BENEFICIARY WHO IS
EXEMPT FROM TAXATION UNDER SECTION 501 OF THE
INTERNAL REVENUE CODE AND A NONRESIDENT
BENEFICIARY WHO SUBMITS TO THIS STATE'S JURISDICTION
FOR DETERMINING TAX LIABILITY; TO AMEND SECTION
12-8-580, RELATING TO WITHHOLDING OF A PORTION OF THE
PURCHASE PRICE BY A BUYER WHEN THE SELLER IS A
NONRESIDENT, SO AS TO FURTHER PROVIDE FOR THE
PROPERTY WHICH IS SUBJECT TO THE WITHHOLDING
REQUIREMENTS; TO AMEND SECTION 12-8-1030, RELATING TO
AN INCORRECT WITHHOLDING EXEMPTION CERTIFICATE, SO
AS TO ESTABLISH PROCEDURES FOR THE EMPLOYER,
EMPLOYEE, AND DEPARTMENT OF REVENUE FOR
DETERMINATION OF THE CORRECT NUMBER OF EXEMPTIONS
AND APPEAL OF THAT DETERMINATION AND TO GIVE
EMPLOYERS UNTIL MARCH 31, 1999, TO COMPLY; TO AMEND
SECTION 12-54-40, AS AMENDED, RELATING TO PENALTIES IN
CONNECTION WITH A WRONGFUL CLAIM OF WITHHOLDING
EXEMPTIONS, SO AS TO CHANGE THE REFERENCE TO
CHAPTER 8 INSTEAD OF CHAPTER 9, TO INCREASE THE
MAXIMUM FINE TO ONE THOUSAND DOLLARS, AND TO MAKE
THE OFFENSE TRIABLE IN MAGISTRATE'S COURT; TO AMEND
SECTION 12-54-46, RELATING TO THE FILING OF A FALSE
WITHHOLDING EXEMPTION CERTIFICATE, SO AS TO DELETE
THE MAXIMUM LIMIT ON THE FINE; TO REPEAL SECTION
12-54-45 RELATING TO THE PENALTY FOR SUPPLYING AN
EMPLOYER WITH FALSE OR FRAUDULENT INFORMATION AS
TO THE NUMBER OF EXEMPTIONS; TO AMEND SECTION
12-21-4020, AS AMENDED, RELATING TO CLASSES OF BINGO
LICENSES, SO AS TO ALLOW CERTAIN CLASS D LICENSEES TO
USE HARD BINGO CARDS; AND TO AMEND SECTION 12-21-4090,
RELATING TO BINGO CHECKING AND SAVINGS ACCOUNTS, SO
AS TO EXCEPT THE HOLDER OF A CLASS D FAIR LICENSE.
Be it enacted by the General Assembly of the State of South Carolina:
Withholding for distribution to nonresident beneficiary
SECTION 1. Section 12-8-570 of the 1976 Code, as added by Act 76
of 1995, is amended to read:
Section 12-8-570. (A) A trust or estate making a distribution of South
Carolina taxable income to a nonresident beneficiary must withhold seven
percent of the beneficiary's distribution which is attributable to South
Carolina taxable income. The amounts withheld must be remitted to the
department at the time estimated tax payments are due.
(B) This section does not apply to a:
(1) trust that is exempt from taxation under Internal Revenue Code
Section 501;
(2) nonresident beneficiary who is exempt from taxation under
Internal Revenue Code Section 501; or
(3) nonresident beneficiary who agrees to be subject to the
jurisdiction of the department and the courts of this State to determine
South Carolina tax liability, including estimated taxes and related interest
and penalties. The agreement is not an admission of tax liability.
Withholding by buyer from nonresident seller
SECTION 2. Section 12-8-580(A)(1) of the 1976 Code, as added by
Act 76 of 1995, is amended to read:
"(1) A person who purchases real property, or real property and
associated tangible personal property, from a nonresident seller shall
withhold:
(a) seven percent of the gain recognized on the sale by a
nonresident individual, partnership, trust, or estate and five percent for a
nonresident corporation or other nonresident entity if the seller provides
the buyer with an affidavit, described in subsection (E), stating the
amount of gain;
(b) seven percent of the amount realized on the sale for a
nonresident individual, partnership, trust, or estate and five percent by a
nonresident corporation or any other nonresident entity if the seller does
not provide the buyer with an affidavit described in subsection (E); or
(c) the entire net proceeds payable to the nonresident seller, if the
amount required to be withheld in subitem (1) or (2) exceeds the net
proceeds payable to the seller."
Incorrect withholding exemption certificate
SECTION 3. A. Section 12-8-1030 of the 1976 Code, as added by
Act 76 of 1995, is amended to read:
"Section 12-8-1030. (A)(1) If an employer receives a withholding
exemption certificate from an employee claiming ten or more withholding
exemptions or he believes an employee's withholding exemption
certificate is incorrect, the employer shall furnish a copy of the certificate
to the department within thirty days after it is received.
(2) Until otherwise informed by the department the employer shall
withhold on the basis of the claimed exemptions.
(B)(1) If an employer furnishes a copy of an employee's withholding
exemption certificate to the department, or if the department for any other
reason believes an employee's withholding exemption certificate may be
incorrect, the department may request that the employee submit written
verification of the statements on the certificate within thirty days.
(2) If the department determines, upon review, the information is
incorrect, it shall inform the employee that the exemption certificate is
invalid and of the number of exemptions allowed. If the employee does
not provide adequate verification to support the exemptions claimed on
the withholding certificate, the department shall allow only one
exemption.
(C)(1) The determination by the department may be appealed as
provided under the Revenue Procedures Act within thirty days after the
department's decision is rendered. Final review of the appeal includes the
final decision of the Administrative Law Judge Division or court if the
matter was heard by the Administrative Law Judge Division or appealed
to a court.
(2) If the employee does not appeal the department's determination,
the department shall notify the employer of the number of exemptions to
allow in computing the employee's withholding. The correct number of
exemptions, as determined by the department, Administrative Law Judge
Division, or court, must begin on the first payroll period ending on or
after the date the employer receives notification."
B. The provisions of Section 12-8-1030 take effect October 1, 1998. By
March 31, 1999, an employer must review all withholding exemption
certificates submitted before the effective date of this section of all
employees who remain employed by the employer. The employer shall
furnish the department a copy of all those withholding exemption
certificates claiming ten or more exemptions.
Penalties
SECTION 4. Section 12-54-40(b)(6)(e) of the 1976 Code is amended
to read:
"(e) A person required to supply information to his employer under
Chapter (8) of Title 12 who wilfully supplies false or fraudulent
information or who wilfully fails to supply information which would
require an increase in the tax to be withheld under Chapter 8, Title 12 is
guilty, instead of any other penalty provided, of a misdemeanor and, upon
conviction, must be fined not more than one thousand dollars, or
imprisoned not more than one year, or both. Offenses in this section are
triable in magistrate's court."
Intentionally false or fraudulent exemption certificate
SECTION 5. Section 12-54-46 of the 1976 Code, as added by Act 76
of 1995, is amended to read:
"Section 12-54-46. An individual required to supply information to
his employer under Chapter 8 of Title 12 who supplies a withholding
exemption certificate which exceeds the number of exemptions to which
he is entitled is liable for a penalty of not less than fifty dollars for each
exemption claimed that exceeds the number to which he is entitled. The
penalty is assessed and collected in the same manner as income tax
penalties."
Classes of bingo license
SECTION 6. Section 12-21-4020(4) of the 1976 Code, as last
amended by an act of 1998 bearing ratification number 308, is amended
to read:
"(4) CLASS D: A person, organization, or corporation desiring to
conduct a bingo game at a fair as defined in Section 12-21-3920 and who
offers prizes for each game of no more than fifty dollars in merchandise
shall obtain only a temporary Class D bingo license at a cost of one
hundred dollars for not more than ten days or two hundred dollars for
more than ten days. The department, in its discretion, may allow certain
Class D licensees to use hard bingo cards in lieu of the paper cards
required by this article."
Bingo checking and savings accounts
SECTION 7. Section 12-21-4090(A) of the 1976 Code, as added by
Act 449 of 1996, is amended to read:
"(A) The provisions of this section apply to the licensed nonprofit
organization which is responsible for the special checking and savings
accounts established by this section. The provisions of this section do not
apply to the holder of a Class D fair bingo license."
Repeal
SECTION 8. Section 12-54-45 of the 1976 Code is repealed.
Time effective
SECTION 9. This act takes effect upon approval by the Governor,
except Section 3, which takes effect October 1, 1998.
Approved the 15th day of June, 1998. |