Current Status Bill Number:4914 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19960411 Primary Sponsor:Canty All Sponsors:Canty Drafted Document Number:jic\5735htc.96 Residing Body:House Current Committee:Ways and Means Committee 30 HWM Subject:Income tax deduction, subchapter "S" corporation
Body Date Action Description Com Leg Involved
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House 19960411 Introduced, read first time, 30 HWM
referred to Committee
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TO AMEND SECTION 12-6-1140, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEDUCTIONS FROM SOUTH CAROLINA TAXABLE INCOME FOR PURPOSES OF THE STATE INDIVIDUAL INCOME TAX, SO AS TO ALLOW AN EXCLUSION EQUAL TO TWENTY-EIGHT AND ONE-HALF PERCENT BUT NOT MORE THAN TEN THOUSAND DOLLARS OF INCOME OF SOLE PROPRIETORS, SUBCHAPTER "S" CORPORATION SHAREHOLDERS, PARTNERS, AND MEMBERS OF LIMITED LIABILITY COMPANIES RECEIVED AS A RESULT OF THEIR STATUS AS A SOLE PROPRIETOR SHAREHOLDER, PARTNER, OR MEMBER, AND TO PHASE OUT THE DEDUCTION AS INCOME RISES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-6-1140 of the 1976 Code, as last amended by Act 145 of 1995, is further amended by adding an appropriately numbered item at the end to read:
"( ) (a) Twenty-eight and one-half percent, but not more than ten thousand dollars, of amounts otherwise subject to tax under Section 12-6-510 received by or attributed to a taxpayer as a result of the taxpayer's status as a:
(1) sole proprietor of a business;
(2) shareholder of a subchapter `S' corporation;
(3) partner in a partnership; or
(4) member of a limited liability company.
No deduction is allowed under this item for a guaranteed payment to a partner for personal services rendered by the partner for the partnership.
(b) The deduction allowed by this item is reduced by five hundred dollars for each three thousand dollars, or portion of three thousand dollars of South Carolina taxable income in excess of forty thousand dollars reported by the taxpayer.
(c) No deduction is allowed under this item for any taxpayer in a business which can be organized as a professional corporation pursuant to Chapter 19 of Title 33."
SECTION 2. Upon approval by the Governor, this act is effective for taxable years beginning after 1995.