South Carolina General Assembly
107th Session, 1987-1988

Bill 1183


                    Current Status

Bill Number:               1183
Ratification Number:       514
Act Number                 463
Introducing Body:          Senate
Subject:                   Relating to the South Carolina Estate Tax
                           Act
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(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(A463, R514, S1183)

AN ACT TO AMEND SECTIONS 12-16-20, 12-16-290, 12-16-510, 12-16-730, 12-16-910, 12-16-1110, 12-16-1130, 12-16-1160, 12-16-1200, 12-16-1210, 12-16-1350, 12-16-1510, 12-16-1520, AND ARTICLES 17 AND 19, CHAPTER 16 OF TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE SOUTH CAROLINA ESTATE TAX ACT, SO AS TO CONFORM ITS PROVISIONS TO THE INTERNAL REVENUE CODE OF 1986, AS AMENDED THROUGH DECEMBER 31, 1987, AND TO MAKE TECHNICAL CORRECTIONS, AND TO AMEND SECTION 12-49-70, AS AMENDED, RELATING TO THE CONCLUSIVE PRESUMPTION OF PAYMENT OF TAXES, SO AS TO CORRECT A REFERENCE.

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

Definitions

SECTION 1. (A) Section 12-16-20(5) of the 1976 Code is amended to read:

"(5) 'Internal Revenue Code' means the Internal Revenue Code of 1986, as amended through December 31, 1987."

(B) Section 12-16-20 of the 1976 Code is amended by adding:

"(17) ' Executor' means personal representative as defined in item (9) of this section.

(18) 'Deficiency' means the amount by which the tax imposed by this chapter exceeds:

(1) the sum of:

(a) the amount shown as the tax by the taxpayer upon his return, if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon, plus

(b) the amounts previously assessed (or collected without assessment) as a deficiency, over

(2) the amount of any credits allowable with respect thereto."

Penalties and interest

SECTION 2. Section 12- 16-290 of the 1976 Code is amended to read:

"Section 12-16-290. In any case where it is determined by the board that the decedent died domiciled in this State, interest or penalties, if otherwise imposed by law, for nonpayment of death taxes may not be imposed between the date of the agreement and of filing of the determination of the board as to domicile."

Estates of residents

SECTION 3. Section 12 - 16 -510 ( B ) of the 1976 Code is amended to read:

"(B) If any real and tangible personal property of a resident is located outside of this State and is subject to a death tax imposed by another state for which the federal credit is allowed, the amount of the tax due under this section must be credited with the lesser of:

(1) the amount of the death tax paid the other state and credited against the federal estate tax; or

(2) an amount computed by multiplying the federal credit by a fraction, the numerator of which is the value of that part of the gross estate over which another state or states have jurisdiction to the same extent to which this State would exert jurisdiction under this chapter with respect to the residents of the other state or states and the denominator of which is the value of the decedent's gross estate."

Tax due

SECTION 4. Section 12-16-730(B) of the 1976 Code is amended to read:

"(B) The tax imposed by this section is due upon a taxable distribution or taxable termination as determined under applicable provisions of the federal generation-skipping transfer tax. The person liable for payment of the federal generation-skipping transfer tax is liable for the tax imposed by this article. The tax must be paid to the commission on or before the last day allowed for filing a return hereunder. Interest computed as provided in Section 12-54-20 accrues on the amount of unpaid tax from the day after the last day for filing a return until the date of payment."

Farm or business property

SECTION 5. Section 12-16-910 of the 1976 Code is amended to read:

"Section 12-16-910. (A) When the gross estate of a decedent at the date of death is a value requiring filing a federal estate tax return and the estate contains certain farm or business real property which qualified for valuation under Internal Revenue Code Section 2032A for the tax imposed under this chapter, a copy of the election made at the time of filing the federal estate tax return, if made, must be attached to the South Carolina estate tax return when filed. The return shall also include an agreement signed by each person in being having an interest, whether or not in possession, in the property and consent to the application of Internal Revenue Code Section 2032A.

(B) If, within ten years after the decedent's death and before the death of the qualified heir, as defined in Internal Revenue Code Section 2032A(e)(1), a qualified heir disposes of any interest in the property, other than to a member of his family, as defined in subsection (e)(2) of the section, or ceases to use the property for qualified uses as defined in subsection (b)(2) of the section, there is imposed an additional South Carolina estate tax, computed as provided in Internal Revenue Code Section 2032A(c) and the applicable regulations."

Due date

SECTION 6. Section 12-16-1110(A) of the 1976 Code is amended to read:

"(A) The tax imposed under this chapter is due and payable no later than nine months from the date of the decedent' 9 death."

Notice and demand

SECTION 7. Section 12-16-1130 of the 1976 Code is amended to read:

"Section 12-16-1130. Upon receipt of notice and demand from the commission as provided in Section 12-16-1340(E) there must be paid at the time and place stated in the notice the amount of any tax, including any interest and assessable penalties stated in the notice and demand."

Payment by nonresident estate

SECTION 8. Section 12-16-1160 of the 1976 Code is amended to read:

"Section 12-16-1160. A resident personal representative holding personal property of a deceased nonresident subject to the tax shall deduct the tax or collect it from the personal representative in the state of the decedent's domicile and shall not deliver the property to him or any other person until he has collected the tax and paid the same to the commission. When the transfer of the personal property is subJect to a tax under the provisions of this chapter and the personal representative in the state of domicile neglects or refuses to pay the tax upon demand or if for any reason the tax is not paid within nine months after the decedent's death, the resident personal representative may petition the probate court where the resident personal representative qualified for authority to sell the property or, if the same can be divided, the portion as may be necessary. He shall then deduct the tax from the proceeds of the sale and account for the balance, if any, in lieu of the property."

Summons

SECTION 9. Section 12-16-1200 of the 1976 Code is amended to read:

"Section 12-16-1200. In case of the refusal or neglect of any person summoned under the provisions of this chapter by the commission to appear before it and produce books, papers, or securities, the commission may apply to any justice of the Supreme Court or circuit judge for a mandamus to compel obedience to the summons and the hearing thereon may be had in Richland County or any other convenient county."

Tax on transfer

SECTION 10. Section 12-16-1210 of the 1976 Code is amended to read:

"Section 12-16-1210. If a foreign executor, administrator, or trustee assigns or transfers any stock or obligations in this State standing in the name of a decedent or in trust for a decedent, liable for tax under this chapter, the tax must be paid to the commission on transfer."

Collection

SECTION 11. Section 12-16-1350 of the 1976 Code is amended to read:

"Section 12-16-1350. Except as provided in Article 9 of this chapter, where the assessment of the tax imposed by this chapter has been made within the period of limitation properly applicable thereto, the tax may be collected by levy or by a proceeding in court, but only if the levy is made or the proceeding begun within six years after the assessment of the tax."

Liens

SECTION 12. Section 12 - 16 - 1510 of the 1976 Code is amended to read:

"Section 12-16-1510. (A) A lien arises automatically from the death of the decedent upon all property, real or personal, located in this State of every decedent having a taxable estate who fails to pay the tax imposed by this chapter. Except as provided in Sections 12-16-910 and 12- 16-920 the lien once it attaches is enforceable for a period not to exceed ten years from the date of death of the decedent.

(B) That part of the property of a decedent subject to the lien provided under subsection (A) is divested of the lien to the extent it is used for payment of charges against the estate or expenses of its administration allowed by the court having jurisdiction thereof.

(C) That part of the personal property of a decedent subJect to the lien provided under subsection (A) is divested of the lien upon the conveyance or transfer Or the property to a purchaser or holder of a security interest for an adequate and full consideration and the lien shall then attach to the proceeds received for the property from the purchaser or holder of a security interest. Real property is not divested of the lien except as provided in subsections (B) and (D) of this section. (D) When any lien under this section has attached and the commission is satisfied that the tax liability, if any, of the estate has been fully discharged, the commission shall issue a certificate releasing all property of the estate from the lien; or, if the commission is satisfied that the tax liability of the estate has been provided for, it shall issue a certificate releasing any surplus property of the estate from the lien."

Transfer of assets

SECTION 13. Section 12-16-1520 of the 1976 Code is amended to read:

"Section 12-16-1520. Ten days' notice must be served upon the commission prior to the transfer or delivery by any financial institution, corporation, person, or other institution of securities, deposits, or other assets, including shares of capital stock or other interest in the above institutions or corporations, which belong to or stand in the name of any other persons to the executors, administrators, or legal representatives of the decedent or to his survivors when held in the joint name of the decedent and one or more other persons upon their order or request. However, the ten-day notice period may be waived upon written consent of the commission. Prior to the expiration of the ten-day period, the commission may require the portion of the property to be transferred for purposes of paying any taxes and interest subsequently due upon the property as imposed by this chapter.

Notwithstanding the provisions of this section:

(1) Any portion of a checking or savings account may be transferred upon notification to the commission of the intent to transfer without its written consent and without regard to the ten-day notice period. Any amount so withdrawn must be included in the gross estate of the decedent if otherwise includable therein as provided by law.

(2) This notice is also not required for the transfer of stocks, bonds, notes, mortgages, dividends, interest, wages, or salaries of a nonresident decedent unless the transferee has actual knowledge that a decedent was a resident of this State or that the assets have an actual business situs in this State. The exemption from notice for nonresidents does not apply to bank accounts, bank boxes, certificates of deposit, safe-deposit boxes, insurance proceeds, or real estate."

Enforcement and liabilities

SECTION 14. Article 17, Chapter 16 of Title 12 of the 1976 Code is amended to read:

"Article 17

Enforcement and Liabilities

Section 12-16-1710. The probate court may authorize executors, administrators, personal representatives, and trustees to sell the real estate of a decedent for the payment of the tax in the same manner in which it may authorize them to sell real estate for the payment of debts.

Section 12-16-1720. The commission may appear in any proceeding in any court in which the decree may in any way affect the tax and no decree in any such proceeding or appeal therefrom shall be binding upon the State unless personal notice of such proceeding shall have been given to the commission.

Section 12-16-1730. Whenever the commission in any action instituted by it recovers taxes under the provisions of this chapter, the amount of the Judgment so recovered must be paid to the commission and the commission shall turn over to the State Treasurer all of the taxes after paying the costs, disbursements, and expenses of the suit. The commission shall issue executions for any taxes which remain unpaid for a period of ninety days."

Payment presumed

SECTION 15. Section 12-49-70 of the 1976 Code, as amended by Act 70 of 1987, is further amended to read:

"Section 12-49-70. Except as provided in Article 9 of Chapter 16 of this title, all taxes levied or becoming due under the laws of this State are conclusively presumed paid after ten years from the last date taxes could have been paid without penalty. This section does not apply to taxes for the collection of which the State institutes judicial proceedings within the time limit above.

Except as to the conclusive presumption after ten years of payment of taxes by taxpayers as provided in this section, this section does not affect or impair the operation of Sections 12-45-380, 12-55-20, and 12-59-330."

Miscellaneous provisions

SECTION 16. Article 19, Chapter 16 of Title 12 of the 1976 Code is amended to read:

"Article 19

Miscellaneous Provisions

Section 12-16-1910. For purposes of this chapter, if a person as defined in Section 62-2-801 makes a disclaimer as provided in Internal Revenue Code Section 2518 with respect to any interest in property, this chapter applies as if the interest had never been transferred to the person.

Section 12-16-1920. The commission may prescribe forms, make rules, and promulgate regulations as necessary to implement and administer this chapter.

Section 12-16-1930. Except in accordance with a proper Judicial order or as otherwise provided by law, it is unlawful for the members of the commission, any deputy, agent, clerk, or other officer or employee, or former employees or officers to divulge or make known in any manner the report or return or any particulars set forth or disclosed in any report or return, as completed in connection with the administration and enforcement of this chapter. The provisions of this section apply to all reports and returns filed before or after enactment of this section. Nothing in this section prohibits the publication of statistics, so classified as to prevent the identification of particular reports or returns and the items thereof, or the inspection by the Attorney General or other legal representative of the State, of the report or return upon an application for review of any adjustment proposed by the commission or upon the filing of a petition for redetermination of a deficiency assessed by the commission, or against whom an action or proceeding has been instituted to recover any tax or penalty imposed by this chapter. Nothing herein precludes the disclosure of deficiency assessments to the probate courts and the filing of warrants for uncollected taxes.

Any person who violates the provisions of this section is guilty of a misdemeanor and, upon conviction, must be imprisoned for not more than one year or fined not more than one thousand dollars, or both. If the offender is an employee or officer of this State, he is dismissed from office and may not hold any public office in this State for five years thereafter.

Section 12-16-1940. Notwithstanding the provisions of Section 12-16-1930, the commission may permit the commissioner of Internal Revenue of the United States, the proper officer of any state imposing taxes similar to those imposed by this chapter, or the authorized representative of either such officer to inspect tax returns of any taxpayer or may furnish to the officer or his authorized representative an abstract of the tax return of any taxpayer or supply him with information concerning any item contained in any tax return or disclosed by the report of any investigation of the tax return of any taxpayer. Permission is granted or the information furnished to the officer or his representative only if the statutes of the United States or of the other state grant substantially similar privileges to the proper officer of this State charged with the administration of this chapter.

Section 12-16-1950. The commission shall prescribe all forms, books, and blanks for the use of the probate judges necessary for the administration of this chapter, which must be provided at the expense of the several counties, and the commission shall mail notice to the probate judge of each form, book, or blank required to be used thirty days before the use thereof is required.

Section 12-16-1960. No final account of a personal representative in any probate proceeding who is required to file a federal estate tax return may be allowed and approved by the court before whom the proceeding is pending unless the court finds that the tax imposed on the property by this chapter, including applicable interest, has been paid in full or that no such tax is due."

Time effective

SECTION 17. This act takes effect upon approval by the Governor but the amendments in Chapter 16 of Title 12 of the 1976 Code contained in this act do not change the effective date of Chapter 16 of Title 12 as provided in Section 10 of Act 70 of 1987.

08012

1988

0464

0515

S0532

AN ACT TO AMEND SECTION 59-113-10, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE HIGHER EDUCATION TUITION GRANT COMMITTEE, SO AS TO, AMONG OTHER THINGS, CHANCE THE NAME OF THE HIGHER EDUCATION TUITION GRANT COMMITTEE TO HIGHER EDUCATION TUITION GRANT COMMISSION, PROVIDE FOR AN ADDITIONAL EX OFFICIO MEMBER WHO IS THE CHIEF EXECUTIVE OFFICER OF THE STATE COMMISSION ON HIGHER EDUCATION OR HIS DESIGNEE, DELETE CERTAIN LANGUAGE AND PROVISIONS, AND PROVIDE THAT THE HIGHER EDUCATION TUITION GRANT COMMISSION IS RESPONSIBLE SOLELY TO THE GENERAL ASSEMBLY AND SHALL REPORT TO THE GENERAL ASSEMBLY AT LEAST ANNUALLY; TO AMEND SECTION 59-113-30, RELATING TO THE STUDENTS COVERED BY CHAPTER 113 OF TITLE 59 (TUITION GRANTS), THE AMOUNT OF GRANTS, AND ADJUSTMENT FOR SCHOLARSHIPS, SO AS TO DELETE CERTAIN LANGUAGE AND PROVIDE THAT THE MAXIMUM AMOUNT MAY NOT EXCEED THE AVERAGE STATE APPROPRIATION FOR EACH FULL-TIME STUDENT ENROLLED IN THE STATE-SUPPORTED INSTITUTIONS OF HIGHER LEARNING WITH FOUR-YEAR UNDERGRADUATE DEGREE PROGRAMS IN THE PREVIOUS YEAR, RATHER THAN PROVIDING THAT THE MAXIMUM AMOUNT NOT EXCEED THE AVERAGE STATE APPROPRIATION PER FULL-TIME STUDENT ENROLLED IN ALL STATE-SUPPORTED INSTITUTIONS OF HIGHER LEARNING; AND TO AMEND SECTION 59-113-50, RELATING TO THE DEFINITION OF "INDEPENDENT INSTITUTION OF HIGHER LEARNING" FOR THE PURPOSES OF CHAPTER 113 OF TITLE 59, SO AS TO CHANGE THE MEANING OF THAT TERM.

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

Name changed; member added; report

SECTION 1. Section 59-113-10 of the 1976 Code is amended to read:

"Section 59-113-10. There is created a Higher Education Tuition Grant Commission consisting of eight representatives of the independent institutions of higher learning in the State who choose to come under the provisions of this chapter. In addition, the membership of the Commission includes one ex officio member to be named by the House Committee on Education and Public Works, one ex officio member to be named by the Senate Committee on Education, and one ex officio member who is the chief executive officer of the State Commission on Higher Education or his designee. The terms of the representatives of the institutions are for three years and until their successors are selected and qualify. The membership of the Commission must be rotated among the participating institutions. The Commission shall administer the provisions of this chapter and shall make those regulations as may be necessary in order to carry out the intent of this chapter. The Commission is responsible solely to the General Assembly and shall report to that body at least annually."

Limited to certain state-supported institutions of higher learning

SECTION 2. Section 59-113-30 of the 1976 Code is amended to read:

"Section 59-113-30. (A) The provisions of this chapter apply to students entering college as freshmen during the 1970-71 academic year.

(B) The amount of the grant to be paid for each semester, or appropriate academic term, must be determined by the Higher Education Tuition Grant Commission and the Commission shall award the maximum amount permissible under its regulations or the determined need of the student, whichever is less.

(C) The maximum amount may not exceed the average state appropriation for each full-time student enrolled in the state-supported institutions of higher learning with four-year undergraduate degree programs in the previous year. The tuition grants must be calculated annually by the Commission.

(D) The need of each applicant must be determined by acceptable need analysis such as the parents' confidential statement and such other analyses as the Commission may determine.

(E) An adjustment must be made in the tuition grant of any student awarded a scholarship from any other source if the combination of grants and awards exceeds the calculated need of the student. If the scholarship is for only a portion of tuition and fees, the student may qualify for a proportionate tuition grant in accordance with the provisions of this chapter."

Definition changed

SECTION 3. Section 59-113-50 of the 1976 Code is amended to read:

"Section 59-113-50. For the purposes of this chapter, an independent institution of higher learning means any independent eleemosynary Junior or senior college in South Carolina whose major campus and headquarters are located within South Carolina and which is accredited by the Southern Association of Colleges and Secondary Schools."

Time effective

SECTION 4. This act takes effect upon approval by the Governor.