South Carolina General Assembly
109th Session, 1991-1992

Bill 558

                    Current Status

Introducing Body:               Senate
Bill Number:                    558
Ratification Number:            98
Act Number:                     50
Primary Sponsor:                Committee (06)
Type of Legislation:            GB
Subject:                        Tax provisions
Companion Bill Number:          329
Date Bill Passed both Bodies:   May 14, 1991
Computer Document Number:       JIC/5261.HC
Governor's Action:              S
Date of Governor's Action:      May 27, 1991
Introduced Date:                Jan 29, 1991
Date of Last Amendment:         May 08, 1991
Last History Body:              ------
Last History Date:              May 27, 1991
Last History Type:              Act No. 50
Scope of Legislation:           Statewide
Sponsor Committee:              Finance
Sponsor Committee Number:       06
Type of Legislation:            General Bill


 Bill  Body    Date          Action Description              CMN
 ----  ------  ------------  ------------------------------  ---
 558   ------  May 27, 1991  Act No. 50
 558   ------  May 27, 1991  Signed by Governor
 558   ------  May 21, 1991  Ratified R 98
 558   Senate  May 14, 1991  Concurred in House amendment,
                             enrolled for ratification
 558   House   May 09, 1991  Read third time, returned
                             with amendment
 558   House   May 08, 1991  Amended, read second time
 558   House   Apr 25, 1991  Committee Report: Favorable     30
                             with amendment
 558   House   Feb 13, 1991  Introduced, read first time,    30
                             referred to Committee
 558   Senate  Feb 13, 1991  Read third time, sent to House
 558   Senate  Jan 30, 1991  Amended, read second time
 558   Senate  Jan 29, 1991  Placed on Calendar without
 558   Senate  Jan 29, 1991  Introduced, read first time

View additional legislative information at the LPITS web site.

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(A50, R98, S558)


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

General provisions

SECTION 1. Title 12 of the 1976 Code is amended by adding:


General Provisions

Section 12-2-10. As used in this title, `commission' means the South Carolina Tax Commission.

Section 12-2-20. As used in this title and unless otherwise required by the context, the term `person' includes an individual, a trust, estate, partnership, receiver, association, company, corporation, or any other entity or group.

Section 12-2-30. The repeal or amendment of a code section or act does not release or extinguish any tax, interest, penalty, forfeiture, or liability incurred, unless the repealing section or act expressly so provides. The repealed or amended code section or act must be treated as remaining in force for the purpose of sustaining any proper action or prosecution for the enforcement of the tax, interest, penalty, forfeiture, or liability.

Section 12-2-40. All contracts that are entered into with intent to evade payment of taxes or in fraud of the tax laws of this State are against public policy. The courts of this State may not lend their aid to enforce a contract entered into as a substitute for, or having as its consideration, a previous contract declared to be against public policy. Nothing in this section limits the power of an individual to administer his property by contract or donation so as to manage or avoid the impact of this or other tax laws on his personal property.

Section 12-2-50. (A) Both the principal and interest of all bonds, notes, and certificates of indebtedness, by or on behalf of the United States government, the State, or an authority, agency, department, or institution of the State, and all counties, school districts, municipalities, and other political subdivisions of the State, and all agencies thereof, are exempt from all state, county, municipal, school district, and all other taxes or assessments, except estate or other transfer taxes, direct or indirect, general or special, whether imposed for the purpose of general revenue or otherwise. This exemption extends to all recipients of all interest paid on the obligation, whether paid directly or paid indirectly through a trustee, guardian, or other fiduciary.

(B) `Bonds' as used in this section applies to general obligation bonds and bonds payable wholly or in part from any special fund or from the revenues of a project or undertaking of the issuer.

Section 12-2-60. The Comptroller General, with the approval of the Governor, may extend the time for the performance of the duties imposed upon the county auditors for the preparation of the duplicate and upon the County Treasurer and delinquent tax collector for the collection of taxes.

Section 12-2-70. If a:

(1) person, contrary to the statutes of this State regulating the appointment of the county auditor and county treasurer:

(a) accepts, holds, or exercises, or attempts to hold or exercise, the office of county auditor or treasurer; or

(b) fails, when application is made to him by his successor, to turn over all books, papers, and property of all kinds whatsoever pertaining to either of the offices;

(2) county treasurer, county auditor, or member of a county board of tax appeals neglects, refuses, or evades the performance of the duties imposed upon him by law regulating the assessment and collection of taxes;

(3) county auditor neglects or refuses to comply with the requirements of the law in the making up of his duplicate or fails to file with the Comptroller General the abstracts, vouchers, and settlement sheets within the time required by law; or

(4) county treasurer, after being notified of his removal or suspension from office, fails to settle with the county auditor and the Comptroller General and pay over all state and county monies in his hands to the officers entitled by law to receive these monies within ten days after being so notified;

he is guilty of a misdemeanor and, upon conviction, must be punished by a fine of not more than five thousand dollars or by imprisonment for not more than five years, or both."

Tax Commission

SECTION 2. Title 12 of the 1976 Code is amended by adding:


The South Carolina Tax Commission

Article 1

Commission Organization

Section 12-4-10. The South Carolina Tax Commission is created to administer and enforce the revenue laws of this State and other laws specifically assigned to it.

Section 12-4-20. The commission must be provided all necessary offices, furniture, equipment, books, periodicals, and supplies necessary to conduct its duties.

Section 12-4-30. (A) The commission consists of three commissioners, their officers, agents, and employees. The commissioners are appointed by the Governor with the advice and consent of the Senate. Commissioners shall possess sound moral character, superior knowledge in taxation, and proven administrative ability. The Governor shall designate one of the commissioners as chairman, giving consideration to prior service as a commissioner or employee of the commission.

(B) If a vacancy on the commission occurs when the General Assembly is not in session, it must be filled by the Governor's appointment for the unexpired term, subject to confirmation by the Senate at the next session of the General Assembly. Commissioners may be removed by the Governor for cause shown with the advice and consent of the Senate. If cause for removal arises when the Senate is not in session, the Governor may suspend the commissioner and shall fill the vacancy thus created until the General Assembly next convenes.

Section 12-4-40. Each commissioner, within thirty days after notice of appointment and before taking office, shall take and file with the Secretary of State the oath of office prescribed by the State Constitution.

Section 12-4-50. The terms of office of the commissioners are six years each, with the term of one member expiring every two years. Each commissioner shall remain in office until his successor is appointed and qualifies.

Section 12-4-60. The commissioners shall receive an annual salary set by the General Assembly and reimbursement for their expenses incurred while engaged in the work of the commission in the same manner as other state officers.

Section 12-4-70. The chairman of the commission shall devote the time required to perform the duties of the office and may not:

(1) engage in any occupation or business interfering with or inconsistent with his duties;

(2) serve on or under a committee of a political party; or

(3) contribute, directly or indirectly, money or anything of value in support of a candidate for office or to a political organization.

Article 3

General Powers and Duties

Section 12-4-310. The commission shall:

(1) hold meetings, as considered necessary by the chairman, with a majority of the commissioners constituting a quorum. The commission may hold meetings, transact business, or conduct investigations at any place necessary; however, its primary office is in Columbia;

(2) formulate and recommend legislation to enhance uniformity, enforcement, and administration of the tax laws, and secure just taxation and improvements in the system of taxation;

(3) consult and confer with the Governor upon the subject of taxation, the administration of the laws, and the progress of the work of the commission, and furnish the Governor reports, assistance, and information he may require;

(4) prepare and publish, annually, statistics reasonably available with respect to the operation of the commission, including amounts collected, and other facts it considers pertinent and valuable;

(5) make available to the authorities of a political subdivision information reported to the commission pursuant to the requirements of Chapter 36 of this title of businesses licensed under Section 12-36-510 in the requesting political subdivision.

(6) hire all necessary personnel, including officers, agents, deputies, experts, and assistants, and assign to them duties and powers as the commission prescribes;

(7) require those of its officers, agents, and employees it designates to give bond for the faithful performance of their duties in the sum and with the sureties it determines; and all premiums on the bonds must be paid by the commission;

(8) pay travel expenses, purchase, or lease all necessary facilities, equipment, books, periodicals, and supplies for the performance of its duties; and

(9) exercise and perform other powers and duties as granted to it or imposed upon it by law.

Section 12-4-320. The commission may:

(1) make rules and promulgate regulations, not inconsistent with law, to aid in the performance of its duties. The commission may prescribe the extent, if any, to which these rules and regulations must be applied without retroactive effect;

(2) upon written application, determine the tax effects of transactions and the tax liability of taxpayers, upon facts furnished to it, and it may revoke or modify the rulings if the facts should develop differently later. The commission, in its discretion, may publish these rulings. This publication may be in brief hypothetical form so as to give all pertinent facts and decisions without violating the provisions of Section 12-54-240;

(3) compromise any tax, interest, or penalty imposed by this title or other law assigned to it and may return to the owner, in whole or in part, any goods seized or confiscated;

(4) enter into a written agreement with a person with regard to a tax liability. If the agreement is approved by a majority of the commissioners, it is final and conclusive and the case may not be reopened by administrative or judicial action or otherwise, except in cases of fraud, malfeasance, or misrepresentation;

(5) publish its findings and decisions in all controversies resolved by it. This publication may be in brief hypothetical form so as to give all pertinent facts, decisions, and reasons without violating the provisions of Section 12-54-240.

Section 12-4-330. (A) The commission may summon witnesses to appear and give testimony and to produce records, books, papers, and documents relating to any matters which the commission has authority to investigate or determine.

(B) The commission may cause the deposition of witnesses residing within or without the State or absent from the State to be taken upon notice to the interested party, if any, in the manner that depositions of witnesses are taken in civil actions pending in the circuit court in any matter which the commission has authority to investigate or determine.

(C) Oaths to witnesses may be administered by the secretary of the commission or a member of the commission. A person who testifies falsely in a matter under consideration by the commission is guilty of and, upon conviction, will be punished for perjury.

(D) Officers who serve summons or subpoenas and witnesses appearing before the commission will receive the same compensation as officers and witnesses in the circuit court. The commission may incur and pay the expense of obtaining expert witnesses or of other evidence for use by the commission in a judicial or administrative proceeding. This compensation and expert witness expense must be paid upon certificate of the commission by the State Treasurer, by drawing upon funds from the type of tax that is involved in the proceeding, or by the political subdivision or political subdivisions for whose benefit these expenses were incurred.

Section 12-4-340. The commission, for the purposes of collecting delinquent taxes due from a taxpayer not residing in the State, may contract with a collection agency, within or without the State, for the collection of delinquent taxes, including penalties and interest as provided in Section 12-54-227.

Section 12-4-350. The commission may contract for computer and other electronic data processing services as it considers necessary. A person, firm, or governmental entity and their employees, under contract with the South Carolina Tax Commission, having access to information contained in or produced from a tax return, document, or magnetically or electronically stored data may not publish or disclose any part or parts of the data or information resulting from the data except to the commission, or as authorized by the commission, or as otherwise provided by law or by an order of a court of competent jurisdiction. This provision does not exempt the commission from the provisions of the South Carolina Consolidated Procurement Code.

Article 5

Powers and Duties with Respect to

Property Taxes

Section 12-4-510. In addition to other powers and duties required by law, the commission, in order to administer effectively the equitable assessment of property for taxation:

(1) has all of the powers conferred by law upon the former State Board of Equalization and upon the former State Board of Assessors before February 20, 1915;

(2) annually shall make the levy upon the assessed value of property subject to taxation necessary to raise the annual appropriations made by the General Assembly as it relates to private carlines and flight equipment;

(3) shall order reassessment of real and personal property, or any class or classes of either, or when, in the judgment of the commission, the reassessment is advisable or necessary to the end that all classes of property in the assessment district are assessed in compliance with the law.

Section 12-4-520. The commission:

(1) shall call meetings of all county assessors, to provide instruction as to the law governing the assessment and taxation of all classes of property, and the commission shall formulate and prescribe rules to govern assessors and county boards of tax appeals in the discharge of their duties;

(2) shall confer with, advise, and direct assessors and county boards of tax appeals as to their duties under the laws of the State;

(3) may visit any of the counties in the State to investigate the assessment, equalization, and taxation of all property subject to taxation and take any action necessary to insure the proper assessment, equalization, and taxation of the property;

(4) as often as annually, shall examine all the books, papers, and accounts of assessors, auditors, treasurers, and tax collectors, with a view to protecting the interests of the State, counties, and other political subdivisions and rendering these officers aid or instruction. The commission does not have jurisdiction over personnel or equipment purchases of political subdivisions;

(5) shall require county auditors to place upon the assessment rolls omitted property which may have escaped assessment and taxation in whole or in part, in the current or previous years; and

(6) may extend the time for the performance of the duties imposed upon the county assessors or auditors for the valuation of property for tax purposes, and, when the Comptroller General extends the time for the collection of taxes, the commission may postpone the time for the imposition of penalties.

Section 12-4-530. The commission shall:

(1) examine cases in which the laws of this State relating to the valuation, assessment, or taxation of property is complained of, or discovered to have been evaded or violated in any manner;

(2) require the Attorney General or circuit solicitor to assist in the commencement and prosecutions of actions and proceedings for penalties, forfeitures, removals, and punishment for violation of the laws of this State in respect to the assessment and taxation of property;

(3) direct proceedings, actions, and prosecutions to be instituted to enforce the laws relating to penalties, liabilities, and punishment of public officers and officers and agents of corporations for failure or neglect to comply with the provisions of the laws of this State governing the assessment and taxation of property and the rules of the commission; and

(4) cause complaints to be made against assessors, county boards of tax appeal, or other assessing and taxing officers to the proper authority for their removal from office for official misconduct or neglect of duty.

Section 12-4-540. (A) The commission has the sole responsibility for the appraisal, assessment, and equalization of the taxable values of corporate headquarters, corporate office facilities, and distribution facilities and of the real and personal property owned, used, or leased by the following businesses in the conduct of their business:

(1) manufacturing;

(2) railway;

(3) private carline;

(4) airline;

(5) water, heat, light and power;

(6) telephone;

(7) cable television;

(8) sewer;

(9) pipeline;

(10) mining.

In addition, the commission has the sole responsibility for the appraisal, assessment, and equalization of the taxable values of the personal property of merchants.

(B) Except as otherwise provided, the commission may use any accepted or recognized valuation method which reflects the property's fair market value, including methods within the unit valuation concept. In assessing railroad transportation property, the commission shall use the unit valuation concept.

(C) When the unit valuation concept is used, the value allocated to this State must be distributed to the taxing entities in which the property is situated.

(D) Except as otherwise provided, the commission shall assess all real and personal property, leased or used, to the owner.

(E) When the commission uses the unit valuation concept, property taxes on all leased and used real and personal property must be paid by the lessee. Whether or not the unit valuation concept is used, an airline or private carlines shall pay property taxes on all leased real and personal property in its control.

(F) If the commission discovers that property required by law to be returned to the commission has not been returned, the commission may value and assess the property. If property has been returned or assessed incorrectly, the commission may value and assess the property and give notice to the taxpayer of the valuation and assessment. After the expiration of the appeal period, the commission shall certify the corrected assessment to the county auditor of the county where the property is located.

Section 12-4-550. The commission shall:

(1) require municipal, county, and other public officers to report information as to the assessment of property, collection of taxes, receipts from licenses and other sources, and information necessary in the work of the commission in the form the commission prescribes; and

(2) require all persons to furnish information concerning their capital, bonded or other debts, current assets and liabilities, value of property, earnings, operating and other expenses, taxes, and other facts necessary for the commission to ascertain the value and relative tax burden borne by all kinds of property.

Section 12-4-560. The commission shall prepare appropriate manuals, guides, and other aids for the equitable assessment of all properties and prepare suitable forms for an adequate listing and description of property by groups and classes.

Section 12-4-570. The commission, at the request of the Governor or a member of the General Assembly, shall prepare and make available a report showing all taxable property in the State and its value in tabulated form.

Article 7

Application, Determination, and

Revocation of Exemptions from Property Taxes

Section 12-4-710. The commission shall determine if any property qualifies for exemption from local property taxes under Section 12-37-220 in accordance with the Constitution and general laws of this State. This determination must be made on an annual basis and the appropriate county official so advised by June first of each year by the commission.

Section 12-4-720. (A) Applications for property exemptions must be filed as follows:

(1) Except as otherwise provided in items (2) and (3) of this subsection, any tax-exempt property owner or property owner whose property may qualify for property exemption shall file an application for exemption with the commission between January first and April fifteenth of the first year for which the exemption is claimed.

(2) Owners of property exempt under Section 12-37-220A(7) and (8) and B(17) shall file an application for exemption before the sixteenth day of the fourth month after the close of the accounting period regularly employed by the taxpayer for income tax purposes in accordance with Chapter 7 of this title.

(3) Owners of property exempt under Section 12-3-220B(26) and (27) and churches which own motor vehicles shall file an application for exemption within sixty days before or within thirty days after the date on which the motor vehicle was registered or the registration renewal date.

Thereafter, the owner is not required to file an additional application, unless there is a change in the status of the property as reported on the initial application or unless requesting an exemption for property which was not included on the initial or subsequent application.

(B) The provisions of subsection (A) of this section do not apply in the case of properties owned by the United States Government or those exempt properties enumerated in Section 12-37-220A(1), (5), (9), and (10) and B(9), (13), (14), (15), (23), (25), and (30).

Section 12-4-730. The commission, upon receipt of an application and upon proper investigation, may declare the real and personal property of a person qualifying for an exemption from ad valorem taxation identified in this chapter as exempt and shall certify the exemption to the auditor's office in the county in which the property is located. Upon certification by the commission, the auditor shall void any tax notice applicable to the property.

Section 12-4-740. (A) An owner of tax-exempt property or a property owner requesting tax exemption shall furnish information and records requested by the commission. The commission and its agents may examine portions of the financial records of the owners of real and personal property as necessary to determine if the property qualifies for tax-exempt status.

(B) The commission and its authorized agents may enter the premises upon reasonable notice and inspect them for tax exemption purposes.

Section 12-4-750. (A) The commission may revoke tax-exempt status if the property does not qualify or continue to qualify for tax-exempt status under the provisions of the Constitution and the general laws of the State.

(B) If the commission finds within three years from the date that taxes would have been due on property that has been granted an exemption that the exemption was for any reason improperly granted due to incomplete, misleading, or fraudulent information furnished by the applicant or its agents, the commission shall notify the appropriate county official, and the county auditor shall enter on the duplicate the taxes that would have been due for those years that the property escaped taxation, with an added ten percent penalty.

Section 12-4-760. In addition to any right of appeal otherwise provided by law, a taxpayer may appeal from the decision of the commission to the Tax Board of Review for an interpretation of the Constitution or state laws regarding his property tax exemption status upon payment of his property taxes under protest. The county governing body may appeal the decision of the commission to the Tax Board of Review."

Out-of-state collections

SECTION 3. Article 1, Chapter 54, Title 12 of the 1976 Code is amended by adding:

"Section 12-54-227. (A) As provided by Section 12-4-340, the commission, for the purposes of collecting delinquent taxes due from a taxpayer not residing in this State, may contract with a collection agency, within or without this State, for the collection of the delinquent taxes, including penalties and interest. Delinquent tax claims may be assigned to the collection agency, for the purpose of litigation in the agency's name and at the agency's expense, as a means of facilitating and expediting the collection process. For purposes of this section, a delinquent tax claim is defined as a tax liability that is due and owing for a period longer than six months and for which the taxpayer has been given at least three notices requesting payment, one of which has been sent by certified or registered mail. The notice sent by certified or registered mail will include a statement that the matter of the taxpayer's delinquency may be referred to a collection agency in the taxpayer's home state.

(B) Fees for services, reimbursements, or other remuneration to the collection agency must be based on the amount of tax, penalty, and interest actually collected. Each contract entered into between the commission and the collection agency must provide for the payment of fees for these services, reimbursements, or other remuneration not in excess of fifty percent of the total amount of delinquent taxes, penalties, and interest actually collected.

All funds collected, less the fees for collection services as provided in the contract, must be remitted to the commission within forty-five days from the date of collection from a taxpayer. Forms to be used for these remittances must be prescribed by the commission.

(C) The contract with a collection agency must provide that the collection agency acknowledges that it is receiving income from sources within this State or doing business in this State for purposes of income taxation.

(D) Before entering into a contract, the commission shall require the collection agency to post a bond guaranteeing compliance with the terms of the contract, not in excess of one hundred thousand dollars."


SECTION 4. Section 12-54-240 of the 1976 Code, as last amended by Act 106 of 1989, is further amended to read:

"Section 12-54-240. (A) Except in accordance with proper judicial order or as otherwise provided by law it is unlawful for any person to divulge or make known in any manner any particulars set forth or disclosed in any report or return required under Chapters 7, 15, 16, 17, 35, or 36 of this title. Any person violating the provisions of this section is guilty of a misdemeanor and, upon conviction, must be punished by a fine of not more than one thousand dollars or by imprisonment for not more than one year, or both. If the offender is an officer or an employee of the State he must be dismissed from office and is disqualified from holding any public office in this State for a period of five years thereafter. If the offender is an officer or employee of a company retained by the State on an independent contract basis under subsection (B)(3) of this section or Section 12-4-350, the contract is immediately terminated and the company is not eligible to contract with the State for this purpose for a period of five years thereafter.

(B) Nothing in this section prohibits the:

(1) publication of statistics classified to prevent the identification of particular reports or returns and the items included on them or the inspection by the Attorney General or other legal representative of the State of the report or return of any taxpayer who brings an action to set aside or review the tax based on the report or return or against whom an action or proceeding has been instituted to recover any tax or any penalty imposed by this chapter, or of any taxpayer who has applied for review of any adjustment proposed by the commission, or of any taxpayer filing a petition for redetermination of a deficiency assessed by the commission. Reports and returns must be preserved for seven years and thereafter until the commission orders them to be destroyed.

(2) examination of records, returns, and reports held by the commission by persons employed by the State Auditor's Office annually to examine the books, accounts, receipts, disbursements, vouchers, and records of the commission as required by Section 11-7-20.

(3) examination of records, returns, and reports held by the commission by persons retained on an independent contract basis by the State Auditor's Office exclusively for the purpose of auditing statewide financial statements.

(4) transfer of funds and the submission of taxpayer home addresses and corrected social security numbers to the Department of Social Services Child Support Enforcement Division in accordance with Section 12-7-2240.

(5) inspection of returns by officials of other jurisdictions in accordance with Section 12-7-1690.

(6) disclosure of deficiency assessments to probate courts and the filing of warrants for uncollected taxes.

(7) submission of taxpayer names, home addresses, and social security numbers to the State Election Commission and Department of Highways and Public Transportation to effect the purposes of Section 14-7-130.

(8) exchange of information pursuant to Section 12-54-260 between the commission and the collecting agency necessary to implement that section.

(9) disclosure of information pursuant to Section 12-4-310(5) to county and municipal officials.

(C) The commission shall provide guidelines to persons receiving information pursuant to Subsection (B) of this section and shall monitor compliance with this section."

Chapters repealed

SECTION 5. Chapters 1 and 3 of Title 12 of the 1976 Code are repealed. Section 12-7-60 of the 1976 Code is repealed.

Duties of Code Commissioner

SECTION 6. The Code Commissioner shall:

(1) place all appropriate provisions of acts dealing with Chapters 1 and 3, Title 12 of the 1976 Code enacted in the 1991 session of the General Assembly in the appropriate part of Chapters 2 and 4, Title 12 of the 1976 Code as added by this act, and in so doing he shall modify the language of code sections as necessary to implement the intent of the General Assembly;

(2) eliminate or delete from the chapters added by this act any provision of law the subject matter of which was repealed or eliminated by the General Assembly in the 1991 session;

(3) amend provisions in the chapters added by this act corresponding to amendments of the tax laws of this State enacted by the General Assembly during the 1991 session in other acts;

(4) correct cross references as he considers necessary in affected provisions of the 1976 Code.


SECTION 7. Except where inappropriate, a reference in a law, regulation, or other document to Chapters 1 and 3 of Title 12 of the 1976 Code, is considered a reference to the appropriate provisions of Chapters 2 and 4 of Title 12, Chapter 5 of Title 11, and Section 12-54-227, all of the 1976 Code.

Time effective

SECTION 8. This act takes effect July 1, 1991.

Approved the 27th day of May, 1991.