Bill 3332

                    Current Status

Bill Number:                       3332
Type of Legislation:               General Bill GB
Introducing Body:                  House
Introduced Date:                   19970129
Primary Sponsor:                   Witherspoon
All Sponsors:                      Witherspoon, H. Brown,
                                   Sandifer, Barfield, Barrett, Lee,
                                   Walker, Askins, Seithel, Battle,
                                   Whatley, Edge, Tripp, Keegan,
                                   Stille, Loftis, Kelley, Trotter,
                                   Cooper, Rhoad, Miller, Riser,
                                   Knotts, Mason, Limehouse, T. Brown,
                                   Harrell, Altman, Felder, Davenport,
                                   Phillips, McCraw, Kinon, Stoddard,
                                   Hawkins and Sharpe 
Drafted Document Number:           gjk\23115sd.97
Residing Body:                     Senate
Current Committee:                 Finance Committee 06 SF
Subject:                           Property tax exemption, boat,
                                   primary or secondary residence,
                                   interest expense; Taxation,
                                   Watercraft

Body    Date      Action Description                       Com     Leg Involved
______  ________  _______________________________________  _______ ____________
Senate  19970501  Introduced, read first time,             06 SF
                  referred to Committee
House   19970501  Read third time, sent to Senate
House   19970430  Read second time
House   19970429  Objection by Representative                      Moody-
                                                                   Lawrence
                                                                   Neal
House   19970429  Request for debate withdrawn
                  by Representative                                Whipper
                                                                   Mack
House   19970429  Request for debate by Representative             Simrill
                                                                   Young
                                                                   Kirsh
                                                                   Whipper
                                                                   Mack
House   19970417  Committee report: Favorable              30 HWM
House   19970129  Introduced, read first time,             30 HWM
                  referred to Committee

COMMITTEE REPORT

April 17, 1997

H. 3332

Introduced by Reps. Witherspoon, H. Brown, Sandifer, Barfield, Barrett, Lee, Walker, Askins, Seithel, Battle, Whatley, Edge, Tripp, Keegan, Stille, Loftis, Kelley, Trotter, Cooper, Rhoad, Miller, Riser, Knotts, Mason, Limehouse, T. Brown, Harrell, Altman, Felder, Davenport, Phillips, McCraw, Kinon, Stoddard, Hawkins and Sharpe

S. Printed 4/17/97--H.

Read the first time January 29, 1997.

To whom was referred a Bill (H. 3332), to amend the Code of Laws of South Carolina, 1976, by adding Section 12-37-224 so as to provide that a boat, etc., respectfully

That they have duly and carefully considered the same, and recommend that the same do pass:

HENRY E. BROWN, JR., for Committee.

This bill would shift approximately $1,100,000 in local property tax revenue to other classes of taxpayers. This shift would be reduced in future years as more boat owners register their property in the state.

This legislation would reduce the assessment ratio for boats that qualify for an interest deduction under the Internal Revenue Code. From date provided by the Department of Natural Resources, we estimate that approximately 6,100 boats would qualify for the tax reduction. We further assume that the fair market value of these boats average $15,000 and the average statewide millage rate is 225 mills. The revenue loss would therefore total approximately $1,000,000. Finally we assume that the maximum tax of $1,500 per boat would increase the revenue loss by 10 percent.

Approved By:

Burnet R. Maybank, III

S.C. Department of Revenue

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-37-224 SO AS TO PROVIDE THAT A BOAT ON WHICH THE INTEREST PORTION OF ANY INDEBTEDNESS THEREON IS OR WOULD BE DEDUCTIBLE UNDER THE INTERNAL REVENUE CODE AS AN INTEREST EXPENSE ON A QUALIFIED PRIMARY OR SECOND RESIDENCE IS ALSO DEEMED TO BE A PRIMARY OR SECOND RESIDENCE FOR PURPOSES OF AD VALOREM PROPERTY TAXATION IN THIS STATE AND AS SUCH IS CONSIDERED REAL RATHER THAN PERSONAL PROPERTY FOR THESE PURPOSES, AND TO PROVIDE A CAP ON THE MAXIMUM AD VALOREM TAXATION WHICH MAY BE LEVIED ON SUCH A BOAT FOR ANY YEAR.

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

SECTION 1. The 1976 Code is amended by adding:

"Section 12-37-224. A boat on which the interest portion of any indebtedness thereon is or would be deductible under the Internal Revenue Code as an interest expense on a qualified primary or second residence is also deemed to be a primary or second residence for purposes of ad valorem property taxation in this State and as such is considered real rather than personal property for these purposes. Additionally, the maximum ad valorem taxation on such a boat for any year is one thousand five hundred dollars."

SECTION 2. This act takes effect upon approval by the Governor.