Current Status Introducing Body:Senate Bill Number:880 Primary Sponsor:Giese Committee Number:06 Type of Legislation:JR Subject:Income tax refunds, Davis V. Michigan Residing Body:Senate Current Committee:Finance Computer Document Number:JIC/5077SD.94 Introduced Date:19940111 Last History Body:Senate Last History Date:19940111 Last History Type:Introduced, read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:Giese Rose Lander Type of Legislation:Joint Resolution
Bill Body Date Action Description CMN Leg Involved
____ ______ ____________ ______________________________ ___ ____________
880 Senate 19940111 Introduced, read first time, 06
referred to Committee
880 Senate 19931025 Prefiled, referred to 06
Committee
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JIC\5077SD.94 JIC\5077SD.94
TO PROVIDE FOR THE MANNER IN WHICH AND PROCEDURES UNDER WHICH PERSONS WHO ARE ENTITLED TO AN INCOME TAX REFUND FROM THE STATE OF SOUTH CAROLINA ON THE BASIS OF THE DECISION IN THE CASE OF DAVIS V. MICHIGAN MUST BE PAID WHICH SHALL INCLUDE ONE OF FOUR OPTIONS INVOLVING CASH REFUNDS, TAX CREDITS, OR A COMBINATION THEREOF; AND TO PROVIDE FOR THE MANNER IN WHICH FUNDING FOR THESE REFUNDS OR CREDITS MUST BE PROVIDED, INCLUDING THE CERTAIN USE OF SURPLUS AND LAPSED FUNDS AND APPROPRIATIONS FROM THE CAPITAL RESERVE FUND FOR THIS PURPOSE PURSUANT TO SECTION 36, ARTICLE III OF THE CONSTITUTION OF THIS STATE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. (A) Persons who have timely filed a claim for refund with the South Carolina Department of Revenue and Taxation on the basis of the decision in the case of Davis v. Michigan, who are a class action plaintiff in the case of Bass v. The State of South Carolina, or who have otherwise timely instituted other valid administrative or judicial actions against the State of South Carolina or the Department of Revenue and Taxation on the basis of the Davis v. Michigan decision, must be paid for such claims by the State of South Carolina according to one of the following alternatives:
(1) a cash payment for the claim in one lump sum not earlier than January 1, 1995, and not later than June 30, 1995;
(2) a cash payment for the claim in equal annual installments over a period not to exceed four years, with the first installment to be paid during the period January 1, 1995, to June 30, 1995, and the remaining installments to be paid annually thereafter during this same period. The taxpayer shall select the number of years over which the payments shall occur;
(3) a credit against future State of South Carolina individual income tax liability over a period not to exceed four taxable years, beginning with the year 1995. Only those taxpayers who report their income on a calendar year basis may elect this option. The credit may be taken in whole or in part in any year of the four-year period as the taxpayer elects;
(4) a combination of options (1), (2), or (3), as the taxpayer elects.
(B) A taxpayer must notify the Department of Revenue and Taxation in writing between the period July 1, 1994, to December 31, 1994, of which of the four options contained in subsection (A) he selects. Failure to notify the department by December 31, 1994, of the option selected constitutes a waiver of the claim. The department before September 15, 1994, shall attempt to inform each taxpayer it has reason to believe is affected by the provisions of this resolution of the contents of this resolution, the options of the taxpayer, and the consequences of failure to notify the department by December 31, 1994, of the option desired by the taxpayer. However, failure by the department to so inform any taxpayer is not grounds to excuse or mitigate the taxpayer's failure to notify the department by December 31, 1994, of the option desired.
(C) All claims must be paid or credited with interest at the rate of six percent per annum from the date required by Section 12-54-30 of the 1976 Code until December 31, 1994.
(D) No claim shall be paid or credited which the department finds is not valid or timely filed. The department may require supporting documentation of a taxpayer's claim as it considers necessary to establish that a valid claim exists. However, the department may not deny a claim on the ground that the decision of Davis v. Michigan is incorrect or that South Carolina law as applied to this decision results in the taxpayer not being entitled to a refund of South Carolina income taxes paid due to the inclusion of federal retirement benefits in income for that year above the level required for comparable state retirement benefits of the same year.
(E) A person to which subsection (A) does not apply because no action has been taken by him as of the effective date of this resolution to secure such a refund but who believes he is entitled to a refund or credit authorized by this resolution may notify the department between the period July 1, 1994, to December 31, 1994, of the option which he selects together with supporting documentation justifying the claim as the department requires, and this must be considered a timely filing of his claim for refund.
(F) Each year in which a taxpayer alleges his federal retirement benefits were improperly taxed by the State of South Carolina on his state income tax return for that year constitutes a separate claim.
(G) The claim of a person entitled to a cash refund or credit under this resolution who dies before December 31, 1994, may be maintained by and is available to his primary beneficiary or beneficiaries as determined by the probate court having jurisdiction of his estate or by the law of the jurisdiction in which he died if his estate was not admitted to probate.
SECTION 2. The funding for the cash refunds or credits provided for in Section 1 of this resolution must be as provided by the General Assembly in the annual appropriations act for the years affected except that:
(1) Notwithstanding any other provision of law and subject to the constitutionally required replenishment of reserve funds from year-end surplus funds, surplus or lapsed funds from fiscal years beginning with fiscal year 1992-93 and ending with fiscal year 1997-98 must be used for these purposes to the extent necessary as determined by the Budget and Control Board.
(2) After the use of surplus or lapsed funds from a preceding fiscal year as provided in item (1), and subject to any other constitutionally required uses of the funds in the Capital Reserve Fund, any appropriations from the Capital Reserve Fund for any fiscal year beginning with fiscal year 1993-94 and ending with fiscal year 1998-99 must be used for these purposes to the extent necessary as determined by the Budget and Control Board. These appropriations from the Capital Reserve Fund are subject to the special voting and other requirements contained in Section 36 of Article III of the Constitution of this State. Pursuant to Section 36 of Article III, the appropriation in this item (2) from the Capital Reserve Fund is declared to be for a nonrecurring purpose and is declared by the General Assembly to be the highest priority for the use of these funds absent a constitutionally mandated priority.
SECTION 3. This joint resolution takes effect upon approval by the Governor.