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Bill Number: 319 Ratification Number: 105 Act Number 70 Introducing Body: Senate Subject: Estate Tax Act applicable to decedents dying after June 30, 1991
(A70, R105, S319)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 16 IN TITLE 12 SO AS TO ENACT THE SOUTH CAROLINA ESTATE TAX ACT APPLICABLE TO DECEDENTS DYING AFTER JUNE 30, 1991; TO AMEND SECTIONS 12-15-61, 12-15-251, AND 12-15-550, RELATING TO AMOUNTS SPECIFICALLY EXEMPT FROM THE SOUTH CAROLINA ESTATE TAX, SO AS TO INCREASE THE EXEMPTION IN PHASES UNTIL THE EFFECTIVE DATE OF THE SOUTH CAROLINA ESTATE TAX ACT; TO AMEND SECTION 12-49-70, RELATING TO THE PERIOD AFTER WHICH TAXES ARE PRESUMED TO BE PAID, SO AS TO EXEMPT THE RECAPTURE ESTATE TAX FROM THE PRESUMPTION; TO AMEND SECTION 12-54-70, RELATING TO ENFORCEMENT AND COLLECTION OF TAXES, SO AS TO CORRECT A CROSS-REFERENCE; TO AMEND SECTION 2-801 OF THE SOUTH CAROLINA PROBATE CODE, RELATING TO DISCLAIMERS, SO AS TO CORRECT A CROSS-REFERENCE; TO REPEAL CHAPTER 15 OF TITLE 12 RELATING TO THE ESTATE TAX, FOR DECEDENTS DYING AFTER JUNE 30, 1991; TO REPEAL CHAPTER 17 OF TITLE 12 RELATING TO THE GIFT TAX, EFFECTIVE FOR GIFTS MADE AFTER DECEMBER 31, 1991; AND TO REPEAL SECTIONS 12-15-1540 AND 12-15-1550 RELATING TO THE ESTATE TAX, EFFECTIVE JULY 1, 1987.
Be it enacted by the General Assembly of the State of South Carolina:
Estate tax enacted
SECTION 1. Title 12 of the 1976 Code is amended by adding:
Article 1. Definitions and Domicile
Article 3. Interstate Compromise and
Arbitration of Death Taxes
Article 5. Imposition of Tax
Article 7. Tax on Generation-Skipping Transfers
Article 9. Recapture Tax on Certain Use-
Article 11. Returns and Payment of Tax
Article 13. Assessment and Collection
Article 15. Nonpayment of Tax, Lien for Unpaid
Taxes, Certificate of Release from
Article 17. Enforcement and Liabilities
Article 19. Miscellaneous Provisions
Definitions and Domicile
Section 12-16-10. This chapter may be cited as the 'South Carolina Estate Tax Act'.
Section 12-16-20. As used in this chapter, unless the context clearly shows otherwise, the term or phrase:
(1) 'Decedent' means a deceased person.
(2) 'Federal credit' means the maximum amount of the credit for state death taxes allowable by Internal Revenue Code Section 2011. The term 'maximum amount' must be construed so as to take full advantage of the credit as allowed by the Internal Revenue Code.
(3) 'Gross estate' means 'gross estate' as defined in Internal Revenue Code Section 2031.
(4) 'Intangible personal property' means incorporeal personal property including deposits in banks, negotiable instruments, mortgages, debts, receivables, shares of stock, bonds, notes, creditors, evidences of an interest in property, evidences of debt, and choses in action generally.
(5) 'Internal Revenue Code' means the Internal Revenue Code of 1986, as amended through December 31, 1986.
(6) 'Net estate' means the net estate as determined under the provisions of the Internal Revenue Code.
(7) 'Nonresident' means a decedent who was domiciled outside of this State at his death.
(8) 'Person' means persons, corporations, associations, joint stock companies, and business trusts.
(9) 'Personal representative' means the personal representative of the estate of the decedent, appointed, qualified, and acting within the State, or, if there is no personal representative appointed, qualified, and acting within the State, then any person in actual or constructive possession of the South Carolina gross estate of the decedent.
(10) 'Resident' means a decedent who was domiciled in this State at his death.
(11) 'State' means any state, territory, or possession of the United States and the District of Columbia.
(12) 'Tangible personal property' means corporeal personal property, including money.
(13) 'Taxable estate' means 'taxable estate' as defined in Internal Revenue Code Section 2051.
(14) 'Transfer' includes the passing of property or any interest therein, in possession or enjoyment, present or future, by inheritance, descent, devise, succession, bequest, grant, deed, bargain, sale, gift, or appointment in the manner herein described.
(15) 'United States' when used in a geographical sense includes only the fifty states and the District of Columbia.
(16) 'Value' means 'value' as finally determined for federal estate tax purposes under the Internal Revenue Code.
Section 12-16-30. For the purposes of this chapter, every person is presumed to have died a resident of this State if:
(1) The person has dwelt or has lodged in the State during and for the greater part of any period of twelve consecutive months in the twenty-four months next preceding death, notwithstanding the fact that from time to time during the twenty-four months the person may have sojourned outside of this State, and without regard to whether or not the person may have voted, may have been entitled to vote, or may have been assessed for taxes in this State; or
(2) The person was a resident of South Carolina, sojourning outside of this State for any period of time.
The burden of proof in an estate tax proceeding
is on any person claiming exemption by reason of alleged nonresidence, and orders relating to domicile previously entered in the probate proceedings are not conclusive for the purposes of this chapter.
Interstate Compromise and Arbitration of Death Taxes
Section 12-16-210. This article may be cited as the Uniform Act on Interstate Compromise and Arbitration of Death Taxes.
Section 12-16-220. This article must be interpreted and construed to effectuate its general purpose to make uniform the law of those states which enact it.
Section 12-16-230. When the commission claims that a decedent was domiciled in this State at the time of his death and the taxing authorities of another state or states make a like claim on behalf of their state or states, the commission may make a written agreement with the other taxing authorities and with the executor or administrator to submit the controversy to the decision of a board consisting of one or any uneven number of arbitrators. The executor or administrator is authorized to make the agreement. The parties to the agreement shall select the arbitrator or arbitrators.
Section 12-16-240. The board shall hold hearings at the times and places as it may determine, upon reasonable notice to the parties to the agreement, all of whom are entitled to be heard, to present evidence, and to examine and cross-examine witnesses.
Section 12-16-250. The board has the power to administer oaths, take testimony, subpoena, and require the attendance of witnesses and the production of books, papers, and documents, and issue commissions to take testimony. Subpoenas may be signed by any member of the board. In case of failure to obey a subpoena, any judge of a court of record of this State, upon application by the board, may make an order requiring compliance with the subpoena and the court may punish failure to obey the order as a contempt.
Section 12-16-260. The board shall, by majority vote, determine the domicile of the decedent at the time of his death. This determination is final for purposes of imposing and collecting death taxes but for no other purpose.
Section 12-16-270. Except as provided in Section 12-16-250 in respect of the issuance of subpoenas, all questions arising in the course of the proceeding must be determined by majority vote of the board.
Section 12-16-280. The commission, the board, or the executor or administrator shall file the determination of the board as to domicile, the record of the board's proceedings, and the agreement, or a duplicate, made pursuant to Section 12-16-230, with the authority having jurisdiction to assess the death taxes in the state determined to be the domicile and shall file copies of all such documents with the authorities that would have been empowered to assess the death taxes in each of the other states involved.
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 between the date of the agreement and of filing of the determination of the board as to domicile.
Section 12-16-300. Nothing contained in this article prevents at any time a written compromise, if otherwise lawful, by all parties to the agreement made pursuant to Section 12-16-230, fixing the amounts to be accepted by this and any other state involved in full satisfaction of death taxes.
Section 12-16-310. The compensation and expenses of the members of the board and its employees may be agreed upon among the members and the executor or administrator and, if they cannot agree, must be fixed by the probate court of the state determined by the board to be the domicile of the decedent. The amounts so agreed upon or fixed are considered an administration expense and are payable by the executor or administrator.
Section 12-16-320. This article applies only to arbitration cases in which each of the states involved has a law identical with or substantially similar to this article.
Imposition of Tax
Section 12-16-510. (A) A tax in the amount of the federal credit is imposed on the transfer of the taxable estate of every resident, subject, where applicable, to the credit provided in subsection (B).
(B) If the 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 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.
(C) Property of a resident includes:
(1) real property situated in this State;
(2) tangible personal property having an actual situs in this State; and
(3) intangible personal property owned by the resident regardless of where it is located.
Section 12-16-520. (A) A tax in an amount computed as provided in this section is imposed on the transfer of every nonresident's taxable estate located in this State.
The tax is 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 this State has jurisdiction for estate tax purposes and the denominator of which is the value of the decedent's gross estate.
(B) For purposes of this section, property located in this State which is taxable to a nonresident includes:
(1) real property and real property interests located in this State, including mineral interests, royalties, production payments, leasehold interests, or working interests in oil, gas, coal, or any other minerals; and
(2) tangible personal property having an actual situs in this State.
Section 12-16-530. (A) A tax in an amount computed as provided in this section is imposed upon the transfer of real property and tangible personal property having an actual situs in this State and upon intangible personal property physically present within this State of every person who at the time of death was not a resident of the United States.
The tax is 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 this State has jurisdiction for estate tax purposes and the denominator of which is the decedent's gross estate taxable by the United States wherever situated.
(B) Resident aliens of the United States are subject to the tax imposed by this chapter under Section 12-16-520 when the decedent, at the time of death, was not a resident of this State but was a resident of the United States. A resident alien who, at the time of death, was a resident of this State and a resident of the United States is subject to the tax imposed by this chapter under Section 12-16-510.
(C) For purposes of this section, stock in a corporation organized under the laws of this State is considered physically present within this State.
Tax on Generation-Skipping Transfers
Section 12-16-710. (A) Terms, phrases, and words used in this article, except for those defined in subsection (B) of this section, are defined as they are defined under Chapter 13 of subchapter B of the Internal Revenue Code of 1986.
(B) As used in this article the phrase:
'Original transferor' means any transferor, as defined in Internal Revenue Code Section 2652, who by grant, gift, trust, will, or otherwise makes a transfer of real or personal property that results in a federal generation-skipping transfer tax under applicable provisions of the Internal Revenue Code at any time and for which a credit is available under Section 2604.
Section 12-16-720. (A) A tax is imposed upon every generation-skipping transfer, where the original transferor is a resident of this State at the date of original transfer, in an amount equal to the maximum amount allowable as a credit for state generation-skipping transfer taxes under Internal Revenue Code Section 2604, to the extent the credit exceeds the aggregate amount of all taxes on the same transfer actually paid to the several states of the United States, other than this State.
(B) A tax is imposed upon every generation-skipping transfer where the original transferor is not a resident of this State at the date of the original transfer, but where the generation-skipping transfer includes real or personal property having a situs in this State, in an amount equal to the maximum amount allowable as a credit for state generation-skipping transfer taxes under Internal Revenue Code Section 2604, reduced by an amount which bears the same ratio to the total state tax credit allowable for federal generation-skipping transfer tax purposes as the value of the transferred property taxable by all other states bears to the value of the gross generation-skipping transfer for federal generation-skipping transfer tax purposes. In any case in which a tax is imposed on a generation-skipping transfer by this State and by one or more other states, the commission shall negotiate with the taxing authorities of the other state or states so that the aggregate amount of taxes imposed by this State and the other state or states on a generation-skipping transfer does not exceed one hundred percent of the maximum amount allowable as credit for state generation-skipping transfer taxes under Internal Revenue Code Section 2604.
Section 12-16-730. (A) Every person required to file a return reporting a generation-skipping transfer under applicable federal statutes and regulations shall file a return with the commission on or before the last day prescribed for filing the federal return. For purposes of this article the requirements for filing a return are satisfied by filing a duplicate copy of the federal return.
(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 until the date of payment.
Section 12-16-740. If, after the filing of a duplicate federal generation-skipping tax return, the Internal Revenue Service increases or decreases the amount of the federal generation-skipping transfer tax, an amended return must be filed with the commission showing all changes made in the original return and the amount of increase or decrease in the federal generation-skipping transfer tax.
If, based upon the deficiency and the ground therefor, it appears that the amount of tax previously paid this State is less than the amount of tax owing, the difference together with
interest, as computed under Section 12-54-20, must be paid upon notice and demand by the commission. If the person required to file a return and pay the tax fails to file the return required by this section, any additional tax which is owing may be assessed, or a proceeding in court for the tax may be begun without assessment, at any time prior to the filing of the return or within thirty days after the delinquent filing of the return.
Recapture Tax on Certain Use-Valuations
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 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).
Section 12-16-920. The qualified heir is personally liable for the additional tax imposed under this article. The amount of the adjusted tax difference attributable to an interest in any qualified property, computed in the same manner as provided in Internal Revenue Code Section 2032A(c)(2)(C) is a lien on the interest in the property in favor of this State. The lien arises at the time the election is filed hereunder and continues until:
(1) the liability for tax under this article attributable to the interest has been satisfied or has become unenforceable by lapse of time; or
(2) it is established to the satisfaction of the commission that no further tax liability attributable to the interest may arise under this article.
Section 12-16-930. Any qualified heir is required to notify the commission, on a form prescribed by the commission, of any disposition or change in use of the property and pay any additional South Carolina estate tax resulting from the disposition or change, within six months of the disposition or change. Any tax imposed under this article may be assessed until the expiration of three years from the date of the notification.
Returns and Payment of Tax
Section 12-16-1110. (A) The tax imposed under this chapter is due and payable no later than nine months from the date of the decedent's death and is payable to the commission at its office in Columbia.
(B) The personal representative of every estate subject to the tax imposed by this chapter who is required by the laws of the United States to file a federal estate tax return shall file with the Tax Commission, on or before the date the federal estate tax return is required to be filed: (1) a return for the tax due under this chapter; and (2) a copy of the federal estate tax return.
(C) In addition to the provisions of Section 12-54-70, if the personal representative has obtained an extension of time for filing the federal estate tax return, the filing required by subsection (B) is similarly extended until the end of the time period granted in the extension of time for the federal estate tax return. Upon obtaining an extension of time for filing the federal estate tax return, the personal representative shall provide the commission with a copy of the instrument providing for this extension.
(D) Except as provided in Section 12-16-910, the tax due under this chapter must be paid by the personal representative to the Tax Commission at its office in Columbia not later than the date when the return covering this tax is required to be filed under subsection (B) or (C). If the tax is paid pursuant to subsection (C), interest, at a rate equal to the rate of interest established pursuant to Section 12-54-20, must be added for the period between the date when the tax would have been due had no extension been granted and the date of full payment.
Section 12-16-1120. (A) If the personal representative files an amended federal estate tax return, he shall immediately file with the commission an amended return covering the tax imposed by this chapter, accompanying the same with a copy of the amended federal estate tax return. If the personal representative is required to pay an additional tax under this chapter pursuant to the amended return, he shall pay the tax, together with interest as provided in Section 12-54-20, at the time of filing the amended return.
(B) If, upon final determination of the federal estate tax due, a deficiency is assessed, the personal representative shall, within sixty days after this determination, give written notice of the deficiency to the commission. If any additional tax is due under this chapter by reason of this determination, the personal representative shall pay the additional tax, together with interest as provided in Section 12-54-20, at the same time he files the notice.
(C) The limitations on assessment of taxes provided in this chapter do not expire any earlier than ninety days after the personal representative provides the commission with the notice required in subsection (B).
Section 12-16-1130. Upon receipt of notice and demand from the commission as provided in Section 12-16-1360 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.
Section 12-16-1140. The commission may extend the time for the payment of the amount of tax required by this chapter for a reasonable period not to exceed twelve months. If the commission finds that the payment on the due date of any part of the amount determined by the executor as the tax imposed by this chapter would result in undue hardship to the estate, it may extend the time for payment for a reasonable period not in excess of five years from the date prescribed by Section 12-16-1110.
Section 12-16-1150. The tax and interest imposed by this chapter must be paid by the personal representative. If any personal representative distributes either in whole or in part any of the property of an estate to the heirs, next of kin, distributees, legatees, or devisees without having paid or secured the tax due pursuant to this chapter, he is personally liable for the tax so due, or so much thereof as may remain due and unpaid, to the full extent of any property belonging to the deceased person or estate which may come into the personal representative's custody or control.
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 may direct, 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 such sale and account for the balance, if any, in lieu of the property.
Section 12-16-1170. The commission may require any personal representative to show the property of the decedent to the commission or its representative upon demand and may employ a suitable person to appraise the property. The personal representative shall make and subscribe his oath that the property shown on the inventory and appraisal filed by him in the probate court includes all the property, both real and personal, of the decedent that has come to his knowledge or into his possession. The appraiser shall prepare an inventory of the property, shall appraise it at its fair market value at the time of the decedent's death, and shall return the inventory and appraisal to the commission.
Section 12-16-1180. At any time after the expiration of the time required by this chapter for the filing of any return required therein the commission may require the personal representative or any person or corporation interested in the succession to appear at the office of the commission at a time the commission designates and produce for the use of the commission in determining whether or not the estate is subject to tax and the amount of tax, if any, all books, papers, or securities which may be within the possession or within the control of the personal representative or beneficiary relating to estate or tax and to furnish other information relating to the same as he may be able and the commission may require.
Section 12-16-1190. Whenever any person summoned under the provisions of this chapter neglects or refuses to obey the summons as required, the commission may apply to any circuit judge of the State for an attachment against him for contempt. The judge shall hear the application and, if satisfactory proof is made, issue an attachment directed to the sheriff of the county in which the person resides for the arrest of the person and upon his being brought before him shall proceed to a hearing of the case. At the hearing the judge may make an appropriate order not inconsistent with existing laws for the punishment of contempt, to enforce
obedience to the requirements of the summons, and to punish the person for his default or disobedience.
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 or to the judge of the county court for Richland County for a mandamus to compel obedience to the summons and the hearing thereon may be had in Richland County or any other convenient county.
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 to tax under this chapter, the tax must be paid to the commission on transfer.
Section 12-16-1220. The probate judge shall send to the commission by mail a copy of the inventory and appraisal of the assets of every estate the gross assets of which for probated purposes are equal to or exceed the sum of six hundred thousand dollars within thirty days after it is filed, together with a copy of any will probated with respect to the estate. In the case of a nonresident decedent, the probate judge shall furnish the commission with copies of all wills filed with his office and, in the case of an ancillary administration, the probate judge shall furnish the commission with copies of inventories and appraisals in all cases regardless of the value of the tangible personal property and real property having a situs in this State.
Assessment and Collection
Section 12-16-1310. The commission shall make assessment of all taxes, including interest and assessable penalties, imposed by this chapter, or accruing under the former estate tax laws, including taxes due in respect to those estates for which returns have not been filed at the time and in the manner provided by law. This authority includes also the assessment by the commission of all taxes determined by the personal representative as to which a return has been filed under this chapter.
Section 12-16-1320. The assessment must be made
by recording the amount of the tax in the office of the commission in accordance with rules prescribed by the commission. Upon request of the personal representative, the commission shall furnish him a copy of the record of assessment.
Section 12-16-1330. If the commission determines that there is a deficiency in respect of the tax imposed by this chapter, it is authorized to send notice of the deficiency to the personal representative. The notice must be sent by certified or registered mail to him at his last known address. The notice shall reasonably appraise the personal representative of the grounds for the proposed deficiency.
Section 12-16-1340. (A) Within ninety days after the notice of deficiency authorized in Section 12-16-1330 is mailed, not counting Saturday, Sunday, or a legal holiday as the last day, the personal representative may file a petition with the circuit court for the circuit in which the estate is being administered or with the court of common pleas for Richland County for a redetermination of the deficiency.
No assessment of a deficiency in respect of the tax imposed by this chapter and no levy or proceeding in court for its collection may be made, begun, or prosecuted until the notice has been mailed to the taxpayer, nor until the expiration of the ninety-day period, nor, if a petition has been filed with the circuit court, until the decision of the circuit court is final.
(B) If the personal representative is notified that, on account of a mathematical error appearing upon the return, an amount of tax in excess of that shown on the return is due, and that an assessment of the tax has been or will be made on the basis of what would have been the correct amount of tax but for the mathematical error, the notice is not considered as a notice of deficiency for purposes of subsection (A), and the personal representative does not have any right to file a petition with the circuit court based on the notice, nor may the assessment or collection be prohibited by the provisions of subsection (A) of this section.
(C) The commission may by regulations promulgated pursuant to Section 12-16-1320 provide for the making of assessments (1) where the executor in writing has waived the restrictions on assessment and collection prescribed in subsection (A), and (2) where the executor has made any payment as a tax or in respect of any tax.
(D) The petition filed with the circuit court pursuant to subsection (A) must be accompanied by a detailed statement of each particular which is to be reviewed and no item may be considered or reviewed if not specifically set forth in the detailed statement. A copy of the petition must be served upon the commission within the ninety-day period provided in subsection (A) and upon all other parties in interest within a reasonable time thereafter. The appeal must be determined by the circuit court, either in open court or at chambers, upon testimony before the court or taken before a referee appointed by the court for that purpose. The costs must be taxed as in equity causes in this State.
(E) The commission shall as soon as practicable, and within sixty days, after the making of an assessment of a tax pursuant to Section 12-16-1320, give notice to each person liable for the unpaid tax, stating the amount and demanding payment thereof. The notice must be left at the dwelling or usual place of business of the person or may be sent by mail to the person's last known address. Except where the commission believes collections would be jeopardized by delay, if any tax is assessed prior to the last date prescribed for payment of the tax, payment of the tax may not be demanded as provided above until after such date.
Section 12-16-1350. 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.
Section 12-16-1360. The running of the period of limitations for collection of any tax imposed by this chapter is suspended for a period of any extension of time for payment granted under the provisions of Section 12-16-1140.
Section 12-16-1370. The commission shall give receipts for all sums collected by it.
Nonpayment of Tax, Lien for Unpaid Taxes,
Certificate of Release from Lien
Section 12-16-1510. (A) A lien arises automatically upon 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 Section 12-16-910, 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 of 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.
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 up to ten thousand dollars 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.
Section 12-16-1530. The commission, personally or by representatives, may examine such securities, deposits, or assets at the time of the delivery or transfer. Failure to serve the notice required by Section 12-16-1520, to allow the examination, or to retain a sufficient portion or amount to pay the tax and interest, as provided in this article, renders the safe-deposit company, trust company, corporation, bank, or other institution or person liable to the payment of the amount of the tax and interest due or thereafter to become due upon the securities, deposits, or other assets, including the shares of the capital stock of or other interest in the safe-deposit company, trust company, corporation, bank, or other institution making the delivery or transfer, and in addition thereto a penalty of one thousand dollars. The payment of the tax and interest thereon or of the penalty above described, or both, may be enforced in an action brought by the commission in any court of competent jurisdiction. The commission, upon good cause shown, may, in its discretion, remit the penalty in whole or in part.
Enforcement and Liabilities
Section 12-16-1710. For the purposes of this chapter, the term '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.
Section 12-16-1720. The term 'executor', wherever it is used in this chapter in connection with the estate tax imposed by this chapter, means the executor, administrator, or personal representative of the estate of the decedent, or, if there is no executor, administrator, or personal representative appointed, qualified, and acting within this State, then any person in actual or constructive possession of any property of the decedent.
Section 12-16-1730. 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 12-16-1740. 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 12-16-1750. 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.
Section 12-16-1910. For purposes of this chapter, if a person as defined in Section 2-801 of the South Carolina Probate Code 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 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. (A) If upon the death of a decedent leaving an estate, a will disposing of the estate is not offered for probate and a personal representative is not appointed within four months after death, the proper probate court, upon application by the commission, shall appoint an administrator. If it comes to the knowledge of a probate judge that any person within his jurisdiction has died leaving an estate upon which no application has been made for appointment as a personal representative or no will offered for probate or letters testamentary issued, he shall, immediately after the lapse of four months from the death of the decedent, notify the commission thereof together with his opinion as to whether or not any part of the estate is likely to be taxable.
(B) In the absence of administration in this State upon the estate of a nonresident, the commission may, at the request of a personal representative duly appointed and qualified in the state of the decedent's domicile or at the request of a devisee, legatee, distributee, or grantee under a conveyance made during the grantor's lifetime, and upon satisfactory evidence furnished it by the personal representative, devisee, legatee, distributee, or grantee, or otherwise, determine whether or not any part of the estate of the decedent within this State is subject to tax under the provisions of this chapter and may apply to the proper probate court for the appointment of a personal representative in this State as provided in subsection (A).
Section 12-16-1960. When a personal representative or a trustee is empowered under the will or trust of a decedent to satisfy a pecuniary bequest, devise, or transfer in trust, in kind with assets at their value for federal estate tax purposes, the fiduciary, in order to implement the bequest, devise, or transfer in trust, shall, unless the governing instrument provides otherwise, distribute assets, including cash, fairly representative of appreciation or depreciation in the value of all property thus available for distribution in satisfaction of the pecuniary bequest, devise, or transfer.
Section 12-16-1970. The provisions of Sections 12-16-1960 to 12-16-1980 are not intended to change the present laws applicable to fiduciaries, but are statements of the fiduciary principles applicable to the fiduciaries and are declaratory of such laws.
Section 12-16-1980. Personal representatives may enter into agreements with beneficiaries and with governmental authorities, agreeing to make distribution in accordance with the terms of Sections 12-16-1960 to 12-16-1980 for any purpose which they consider to be in the best interests of the estate, including the purpose of protecting and preserving the federal estate tax marital deduction as applicable to the estate, and the representative of a deceased beneficiary may enter into agreements for and on behalf of the beneficiary or deceased beneficiary.
Section 12-16-1990. 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 12-16-2000. No final account of a personal representative in any probate proceeding who is required to file a federal estate tax return is 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."
SECTION 2. Section 12-15-61 of the 1976 Code is amended to read:
"Section 12-15-61. For the purposes of the tax imposed by
Section 12-15-10, the value of the taxable estate is determined by deducting from the value of the gross estate an exemption in addition to the deductions and exemptions allowed in Section 12-15-60, as follows:
(1) one hundred twenty thousand dollars;
(2) for decedents dying after June 30, 1988, and before July 1, 1989, one hundred forty thousand dollars;
(3) for decedents dying after June 30, 1989, and before July 1, 1990, one hundred seventy thousand dollars;
(4) for decedents dying after June 30, 1990, three hundred twenty thousand dollars."
SECTION 3. Section 12-15-251 of the 1976 Code is amended to read:
"Section 12-15-251. For purposes of the tax imposed by Section 12-15-210, the value of the taxable estate is determined by deducting from the value of the gross estate an exemption in addition to the deductions and exemptions allowed in Section 12-15-250, as follows:
(1) one hundred twenty thousand dollars;
(2) for decedents dying after June 30, 1988, and before July 1, 1989, one hundred forty thousand dollars;
(3) for decedents dying after June 30, 1989, and before July 1, 1990, one hundred seventy thousand dollars;
(4) for decedents dying after June 30, 1990, three hundred twenty thousand dollars."
SECTION 4. Section 12-15-550 of the 1976 Code is amended to read:
"Section 12-15-550. The probate judge shall send to the commission by mail a copy of the inventory and appraisal of the assets of every estate the gross assets of which for probated purposes are equal to or exceed the sum of the amounts exempted pursuant to Sections 12-15-61 and 12-15-251 within thirty days after it is filed, together with a copy of any will probated with respect to the estate. In the case of a nonresident decedent, the probate judge shall furnish the Tax Commission with copies of all wills filed with his office and, in the case of an ancillary administration, the probate judge shall furnish the Tax Commission with copies of inventories and appraisals in all cases regardless of the value of the tangible personal property and real property having a situs in this State."
SECTION 5. Section 12-49-70 of the 1976 Code is amended to read:
"Section 12-49-70. Except as provided in Article 7 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."
SECTION 6. Section 12-54-70(c) of the 1976 Code is amended to read:
"(c) Provisions regarding prepayment of ninety percent of the estimated liability do not apply to persons filing monthly reports. For monthly filers, no extension may be granted for more than one additional month beyond the due date. The time and payment requirements of this section do not apply for estate tax purposes if a hardship extension is granted under Section 12-16-1140; but interest must be calculated on any outstanding amount until completely paid."
SECTION 7. Section 2-801(a) of the South Carolina Probate Code is amended to read:
"(a) In addition to any methods available under existing law, statutory or otherwise, if a person (or his executor, administrator, successor, personal representative, special administrator, guardian, attorney-in-fact, trustee, committee, conservator, or his other fiduciary or agent who performs substantially similar functions under the law governing his status, acting with or without the approval of a specific court order and with or without the receipt of consideration for the act), as a disclaimant, makes a disclaimer as defined in Section 12-16-1910 of the 1976 Code, with respect to any transferor's transfer (including tranfers by any means whatsoever, lifetime and testamentary, voluntary and by operation of law, initial and successive, by grant, gift, trust, contract, intestacy, wrongful death, elective share, forced share, homestead allowance, exempt property allowance, devise, bequest, beneficiary designation, survivorship provision, exercise and nonexercise of a power, and otherwise) to him of any interest in, including any power with respect to, property, or any undivided portion thereof, the interest, or such portion, is considered never to have been transferred to the disclaimant."
Period of assessment and collection
SECTION 8. Notwithstanding the provisions of Section 9 of this act, nothing prevents the assessment and collection of taxes levied under Chapter 15 of Title 12 of the 1976 Code until the expiration of the period of limitations on assessment and collection applicable under that chapter.
Code sections repealed
SECTION 9. Chapter 15 of Title 12 of the 1976 Code is repealed with respect to decedents dying after June 30, 1991, except for Section 12-15-420 therein, which is repealed with respect to transfers after March 21, 1980, and Sections 12-15-1540 and 12-15-1550, which are repealed effective July 1, 1987. Chapter 17 of Title 12 of the 1976 Code is repealed with respect to gifts made after December 31, 1991.
Code section effective
SECTION 10. Chapter 16 of Title 12 of the 1976 Code added by this act is effective with respect to decedents dying after June 30, 1991, except for Article 7 therein, which is effective for transfers occurring after October 22, 1986, and Articles 3 and 9, which are effective upon approval by the Governor. Section 6 of this act is effective July 1, 1991. Section 7 of this act is effective January 1, 1992.
SECTION 11. This act takes effect upon approval by the Governor.