Current Status Bill Number:311 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19950110 Primary Sponsor:Richter All Sponsors:Richter Drafted Document Number:RES9544.LER Residing Body:Senate Current Committee:Finance Committee 06 SF Subject:Income tax deduction, interest
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
Senate 19950110 Introduced, read first time, 06 SF
referred to Committee
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TO AMEND SECTION 12-7-430, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ADJUSTMENTS TO FEDERAL GROSS, ADJUSTED GROSS, AND TAXABLE INCOME FOR PURPOSES OF THE INCOME TAX ACT OF 1926, SO AS TO PROVIDE THAT NO DEDUCTION SHALL BE ALLOWED FOR INTEREST PAID ON INDEBTEDNESS BY A CORPORATION WHICH IS A MEMBER OF A CONTROLLED GROUP OF CORPORATIONS, AS DEFINED IN INTERNAL REVENUE CODE SECTION 267, TO ANOTHER CORPORATION WITHIN ITS CONTROLLED GROUP OF CORPORATIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-7-430(d) of the 1976 Code is amended by adding a subsection to read:
"( ) Internal Revenue Code Section 267 shall be applied with the modification provided in this subsection. No deduction shall be allowed under Internal Revenue Code Section 163 for interest paid on indebtedness incurred in this State by a taxpayer corporation which is a member of a controlled group of corporations, as defined in Internal Revenue Code Section 267(f), to a corporation organized under the laws of another state which is within the controlled group of the taxpayer corporation. In addition, no deduction shall be allowed for interest paid on indebtedness by a taxpayer corporation which is also a member of a partnership to the partnership of which the taxpayer corporation is a member, and no deduction shall be allowed for interest paid by a taxpayer corporation which is a member of any other business combination to the business combination of which the taxpayer corporation is a member. This subsection shall apply to all taxpayer corporations including a corporation organized under the laws of this State, whose entire business is transacted or conducted within this State; a corporation organized under the laws of this State, doing or transacting business partly within and partly without this State; or a foreign corporation transacting, conducting, doing business, or having an income within the jurisdiction of this State. For purposes of this subsection, a loan the proceeds of which are used by the recipient to carry on its trade or business in this State shall be deemed to have been made in this State, and any interest payments received by the lender shall deemed to be income earned by the lending party in South Carolina."
SECTION 2. This act takes effect upon approval by the Governor and shall apply to all taxable years beginning after December 31, 1995.