Current Status Bill Number:View additional legislative information at the LPITS web site.
3282Ratification Number: 344Act Number: 329Introducing Body: HouseSubject: To permit taxpayers to defer payment of the state income tax on taxable income
(A329, R344, H3282)
AN ACT TO PERMIT TAXPAYERS TO DEFER PAYMENT OF THE STATE INCOME TAX ON TAXABLE INCOME ATTRIBUTABLE TO THE INCREASE IN GROSS INCOME FROM FOREIGN TRADING RECEIPTS, TO PROVIDE TERMS FOR REPAYMENT OF THE DEFERRED TAXES, TO DEFINE TERMS RELATING TO THE DEFERRAL, AND TO PROVIDE EXCEPTIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. For purposes of this act:
(A) "Export property" means property manufactured, produced, grown, or extracted to which value is added in this State for direct use, consumption, or disposition outside the United States.
(B) "Foreign trading receipts" means receipts from invoices issued by a seller directly to an unrelated purchaser outside the United States from:
(1) The sale, exchange, or other disposition of export property outside the United States.
(2) The lease or rental of export property that is used by the lessee outside the United States.
(3) The performance of services that are related and subsidiary to the sale, exchange, lease, rental, or other disposition of export property outside the United States by the South Carolina taxpayer, including but not limited to maintenance and training services.
(4) The performance of engineering, architectural, or consulting services for
projects located outside the United States.
(C) "Increase in gross income from foreign trading receipts" is the amount by which the gross income from foreign trading receipts during the applicable tax year exceeds a base amount equal to the average of annual gross income from foreign trading receipts over the three taxable years prior to the applicable taxable year.
(D) "Base period T-bill rate" means the annual rate of interest determined by the commission to be equivalent to the average investment yield of United States Treasury bills with maturities of fifty-two weeks which were auctioned during the one-year period ending on September thirtieth of the calendar year ending with or of the most recent calendar year ending before the close of the tax year of the taxpayer.
Payment may be deferred
SECTION 2. Payment of the tax otherwise due pursuant to Chapter 7 of Title 12 of the 1976 Code on taxable income attributable to the increase in gross income from foreign trading receipts may be deferred until the taxpayer intentionally ceases exporting property or after three taxable years in which the taxpayer has no gross income from foreign trading receipts, whichever occurs first, if:
(A) the base amount defined in item (C) of Section 1 does not exceed five million dollars, and
(B) the taxpayer pays interest annually on the aggregate deferred tax at the base period T-bill rate. The interest is due on the date the taxpayer is required to file the annual return required by Chapter 7 of Title 12 of the 1976 Code without regard to any extension, but no interest is due on amounts deferred for less than an entire taxable year.
Failure to pay interest
SECTION 3. (A) If the taxpayer fails to pay interest as required in Section 2 all taxes deferred pursuant to this act are due and payable
on the due date of the unpaid interest and may
be collected as taxes are collected.
(B) All deferred tax payments attributable to a particular taxable year are due and payable no later than the annual return filing date for the fifth taxable year following the taxable year for which the payment of the tax was first deferred. Failure to pay deferred taxes as required by this section renders the taxpayer ineligible to defer payment of taxes for a subsequent tax year.
(C) A taxpayer may pay deferred taxes at an accelerated rate.
SECTION 4. The limitation on assessment and collection of taxes in Section 12-7-2220 of the 1976 Code does not apply to the collection of taxes deferred pursuant to this act.
Act does not apply
SECTION 5. This act does not apply to taxpayers who form Domestic International Sales Corporations or Foreign Sales Corporations pursuant to the Internal Revenue Code of 1954.
Provisions effective for taxable years
beginning after December 31, 1985
SECTION 6. The provisions of this act are effective for taxable years beginning after December 31, 1985.
SECTION 7. This act shall take effect upon approval by the Governor.