H*4527(Rat #0420, Act #0278 of 2004)  General Bill, By M.A. Pitts, Bailey and 
Koon
 AN ACT TO AMEND SECTION 12-6-1140, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA,
 1976, RELATING TO DEDUCTIONS FROM SOUTH CAROLINA TAXABLE INCOME OF
 INDIVIDUALS, SO AS TO EXTEND THE DEDUCTION ALLOWED AN ELIGIBLE VOLUNTEER
 FIREMAN, VOLUNTEER RESERVE SQUAD MEMBER, AND VOLUNTEER MEMBER OF A HAZARDOUS
 MATERIALS (HAZMAT) RESPONSE TEAM TO A RESERVE POLICE OFFICER AND A DEPARTMENT
 OF NATURAL RESOURCES DEPUTY ENFORCEMENT OFFICER, TO DELETE OBSOLETE LANGUAGE,
 CLARIFY THAT ONLY ONE DEDUCTION IS ALLOWED, AND PROVIDE DEDUCTION ELIGIBILITY
 REQUIREMENTS FOR A RESERVE POLICE OFFICER AND DEPARTMENT OF NATURAL RESOURCES
 DEPUTY ENFORCEMENT OFFICER, AND TO AMEND TITLE 32 BY ADDING CHAPTER 13 SO AS
 TO PROVIDE FOR THE TIMING OF A REIMBURSEMENT PAYMENT FOR FEDERAL MANUFACTURERS
 EXCISE TAX IN CONTRACTS REQUIRING SUCH REIMBURSEMENT. - ratified title

   01/14/04  House  Introduced and read first time HJ-6
   01/14/04  House  Referred to Committee on Ways and Means HJ-6
   04/01/04  House  Committee report: Favorable with amendment Ways
                     and Means HJ-8
   04/14/04  House  Amended HJ-39
   04/14/04  House  Read second time HJ-40
   04/15/04  House  Read third time and sent to Senate HJ-15
   04/20/04  Senate Introduced and read first time SJ-9
   04/20/04  Senate Referred to Committee on Finance SJ-9
   05/26/04  Senate Committee report: Favorable with amendment
                     Finance SJ-15
   05/27/04  Senate Amended SJ-278
   05/27/04  Senate Read second time SJ-278
   05/27/04  Senate Ordered to third reading with notice of
                     amendments SJ-278
   06/01/04  Senate Amended SJ-51
   06/01/04  Senate Read third time and returned to House with
                     amendments SJ-51
   06/02/04  House  Concurred in Senate amendment and enrolled HJ-37
   06/03/04         Ratified R 420
   07/16/04         Signed By Governor
   07/26/04         Copies available
   07/26/04         Effective date See Act for Effective Date
   07/28/04         Act No. 278

(A278, R420, H4527)

AN ACT TO AMEND SECTION 12-6-1140, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEDUCTIONS FROM SOUTH CAROLINA TAXABLE INCOME OF INDIVIDUALS, SO AS TO EXTEND THE DEDUCTION ALLOWED AN ELIGIBLE VOLUNTEER FIREMAN, VOLUNTEER RESERVE SQUAD MEMBER, AND VOLUNTEER MEMBER OF A HAZARDOUS MATERIALS (HAZMAT) RESPONSE TEAM TO A RESERVE POLICE OFFICER AND A DEPARTMENT OF NATURAL RESOURCES DEPUTY ENFORCEMENT OFFICER, TO DELETE OBSOLETE LANGUAGE, CLARIFY THAT ONLY ONE DEDUCTION IS ALLOWED, AND PROVIDE DEDUCTION ELIGIBILITY REQUIREMENTS FOR A RESERVE POLICE OFFICER AND DEPARTMENT OF NATURAL RESOURCES DEPUTY ENFORCEMENT OFFICER, AND TO AMEND TITLE 32 BY ADDING CHAPTER 13 SO AS TO PROVIDE FOR THE TIMING OF A REIMBURSEMENT PAYMENT FOR FEDERAL MANUFACTURERS EXCISE TAX IN CONTRACTS REQUIRING SUCH REIMBURSEMENT.

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

Income tax deduction

SECTION    1.    Section 12-6-1140(10) of the 1976 Code, as last amended by Act 363 of 2002, is amended to read:

"(10)    a deduction calculated as provided in this item for a volunteer firefighter, rescue squad member, volunteer member of a Hazardous Materials (HAZMAT) Response Team, reserve police officer, or Department of Natural Resources deputy enforcement officer not otherwise eligible for this exemption. An individual may receive only one deduction pursuant to this item. The Board of Economic Advisors annually shall estimate a maximum deduction that may be permitted under this section for a taxable year based on an individual income tax revenue loss of three million one hundred thousand dollars attributable to this deduction and shall certify that maximum deduction to the Department of Revenue and for the applicable taxable year, the maximum deduction amount must not exceed the lesser of the certified estimate or three thousand dollars. Only a volunteer earning a minimum number of points pursuant to Section 23-9-190 is eligible for this deduction. In the case of a reserve police officer and in lieu of minimum points determining eligibility, this deduction is allowed only if the reserve police officer's coordinator-supervisor certifies in writing to the officer that the officer met all requirements of Chapter 28, Title 23 applicable to a reserve police officer for the entire taxable year. In the case of a Department of Natural Resources deputy enforcement officer and in lieu of minimum points determining eligibility, this deduction is allowed only if the deputy enforcement officer's supervisor certifies in writing to the officer that the officer met all requirements of Section 50-3-315 for the entire taxable year. These certifications must be on a form approved by the Department of Revenue that must be filed with the officer's tax return for the exemption to be claimed."

Timing of reimbursement

SECTION 2.    Title 32 of the 1976 Code is amended by adding:

Section 32-13-110.    (A)    If a contract calls for one party to reimburse the other party for the federal manufacturer's excise tax levied by Part III, Subchapter A, Chapter 32 of the United States Internal Revenue Code, whether as a separate item or as part of the price, there exists for the party making the reimbursement a contractual right relating to the timing of that payment which may be invoked at the option of the party as provided in subsection (B).

(B)    The party making the reimbursement is not required to tender payment for the taxes more than one business day before the time that the other party is required to remit the taxes to the United States Internal Revenue Service.

(C)    If a party exercises the option provided in subsections (A) and (B), the other party may demand security for the payment of the taxes in proportion to the amount the taxes represent compared to the security demanded on the contract as a whole. That party, however, may not change the other payment terms of the contract without a valid business reason other than to exercise the option as provided in subsections (A) and (B) except to require the payment of the taxes under the option to be made by electronic transfer of funds.

(D)    The party exercising the option provided in subsections (A) and (B) shall notify the other party in writing of the intent to exercise the payment option and the effective date of the exercise which must be no earlier than thirty days after the notice of intent is received or the beginning of the next federal tax quarter, whichever is later.

(E)    This section applies to all contracts now in effect which have no expiration date and are continuing contracts and to all other contracts entered into or renewed after the effective date of this section. A contract in force and effect on the effective date of this section, which, by its own terms terminates on a date subsequent to it, must be governed by the law as it existed before the effective date of this section.

(F)    The option provided for in subsections (A) and (B) does not impair the obligations arising under any contract executed before the effective date of this section. If the option provided for in subsections (A) and (B) is exercised, it does not relieve the party of the obligation to make the reimbursement as provided for in the contract but affects only the timing of when that reimbursement must be tendered."

Time effective

SECTION    3.    This act takes effect upon approval by the Governor and applies for taxable years beginning after 2003.

Ratified the 3rd day of June, 2004.

Approved the 16th day of July, 2004.