South Carolina General Assembly
113th Session, 1999-2000

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Bill 3911


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Bill Number:                      3911
Type of Legislation:              General Bill GB
Introducing Body:                 House
Introduced Date:                  19990413
Primary Sponsor:                  Robinson
All Sponsors:                     Robinson, D. Smith, Kelley, Barrett, 
                                  Allison, Easterday, Wilkins, H. Brown, 
                                  Harrell, Woodrum, Simrill, Allen, Altman, 
                                  Barfield, Beck, Campsen, Cato, Cooper, 
                                  Dantzler, Davenport, Edge, Fleming, Gamble, 
                                  Gilham, Hamilton, Harrison, Haskins, Hinson, 
                                  Keegan, Knotts, Leach, Limehouse, Littlejohn, 
                                  Loftis, Lucas, Maddox, Martin, Mason, McGee, 
                                  Meacham-Richardson, Rice, Riser, Rodgers, 
                                  Sandifer, Sharpe, R. Smith, Taylor, Townsend, 
                                  Tripp, Trotter, Vaughn, Walker, Webb, Whatley, 
                                  Witherspoon and Young-Brickell
Drafted Document Number:          l:\council\bills\kgh\15511htc99.doc
Residing Body:                    Senate
Current Committee:                Finance Committee 06 SF
Date of Last Amendment:           19990428
Subject:                          Sales tax exemption, food lawfully 
                                  purchased with Agriculture Department food 
                                  coupons


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
Senate  19990504  Introduced, read first time,           06 SF
                  referred to Committee
House   19990429  Read third time, sent to Senate
House   19990428  Amended, read second time
House   19990422  Committee report: Favorable with       30 HWM
                  amendment
House   19990413  Introduced, read first time,           30 HWM
                  referred to Committee


                             Versions of This Bill
Revised on April 22, 1999 - Word format
Revised on April 28, 1999 - Word format

View additional legislative information at the LPITS web site.


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

Indicates Matter Stricken

Indicates New Matter

AMENDED

April 28, 1999

H. 3911

Introduced by Reps. Robinson, D. Smith, Kelley, Barrett, Allison, Easterday, Wilkins, H. Brown, Harrell, Woodrum, Simrill, Allen, Altman, Barfield, Beck, Campsen, Cato, Cooper, Dantzler, Davenport, Edge, Fleming, Gamble, Gilham, Hamilton, Harrison, Haskins, Hinson, Keegan, Knotts, Leach, Limehouse, Littlejohn, Loftis, Lucas, Maddox, Martin, Mason, McGee, Meacham-Richardson, Rice, Riser, Rodgers, Sandifer, Sharpe, R. Smith, Taylor, Townsend, Tripp, Trotter, Vaughn, Walker, Webb, Whatley, Witherspoon and Young-Brickell

S. Printed 4/28/99--H.

Read the first time April 13, 1999.

            

STATEMENT OF ESTIMATED FISCAL IMPACT

REVENUE IMPACT1

This bill is expected to reduce general fund sales and use tax revenue by an estimated $23.5 million in FY1999-00. Of this amount, general fund sales and use tax revenue would be reduced by $18.8 million, and EIA funds would be reduced by $4.7 million in FY1999-00.

Explanation

This bill would provide for a four-year graduated reduction in the sales tax rate on food purchases beginning January 1, 2000 until food is wholly exempt from sales taxation by January 1, 2004. The proposed legislation would reduce sales and use tax revenue by an estimated $23.5 million in FY1999-00. Of this amount, general fund sales and use tax revenue would be reduced by an estimated $18.8 million, and EIA funds would be reduced by an estimated $4.7 million.

Amendment

The Ways & Means Committee attached HB3913 to HB3911. The amendment would provide a sales and use tax exemption on printed advertising materials of local cooperative direct mailers. This exemption would reduce sales and use tax revenue by an estimated $3.4 million in FY1999-00. Collectively, the amended bill would reduce sales and use tax revenue by an estimated $26.9 million in FY1999-00. Of this amount, general fund sales and use tax revenue would be reduced by $21.5 million, and EIA funds would be reduced by $5.4 million.

Approved By:

William C. Gillespie

Board of Economic Advisors

1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.

A BILL

TO AMEND SECTION 12-36-2120, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SALES AND USE TAX EXEMPTIONS, SO AS TO PHASE IN AN EXEMPTION FOR FOOD ITEMS WHICH LAWFULLY MAY BE PURCHASED WITH UNITED STATES DEPARTMENT OF AGRICULTURE FOOD COUPONS, TO PROVIDE FOR THE USE OF THE REVENUE FROM THE REDUCED RATES OF TAX DURING THE PHASE-IN PERIOD, TO PROVIDE THAT GENERAL FUND REVENUES MUST BE CREDITED TO THE EIA FUND IN FISCAL YEARS 1999-00 THROUGH 2003-04 TO ENSURE THAT EIA REVENUES ATTRIBUTABLE TO FOOD SALES ARE NOT LESS THAN SUCH REVENUES IN FISCAL YEAR 1998-99, AND TO PROVIDE FOR THE APPLICATION OF LOCAL SALES AND USE TAXES ON SALES AND CONSUMPTION OF THESE FOOD ITEMS REGARDLESS OF THE STATE EXEMPTION FOR THESE ITEMS.

Amend Title To Conform

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

SECTION 1. Section 12-36-2120 of the 1976 Code is amended by adding an appropriately numbered item at the end to read:

"( ) effective January 1, 2004, food items eligible for purchase with United States Department of Agriculture food coupons, not including restaurant meals, but this exemption does not apply to local sales and use taxes except where such taxes specifically exempt these items."

SECTION 2. Notwithstanding the rates of tax imposed pursuant to Chapter 36, Title 12 of the 1976 Code, the rate of tax imposed pursuant to that chapter on the gross proceeds of sales, or the sale price of food items eligible for purchase with United States Department of Agriculture food coupons, not including restaurant meals, is four percent for sales or consumption from January 1, 2000, through December 31, 2000, three percent for such sales or consumption from January 1, 2001, through December 31, 2001, two percent for such sales or consumption from January 1, 2002, through December 31, 2002, and one percent for such sales or consumption from January 1, 2003, through December 31, 2003. For fiscal years 1999-00 through 2003-04, general fund revenues must be credited to the EIA fund in amounts sufficient to ensure that EIA revenues attributable to food sales are not less than the amount of such revenues in fiscal year 1998-99. Eighty percent of the revenues from sales taxes imposed by this section must be credited to the general fund of this State and used as sales taxes are used, and the remainder must be credited to the Education Improvement Act Fund. Except where otherwise exempt, the local sales and use taxes authorized by law continue to apply to those sales subject to the reduced state rate of tax provided in this section.

SECTION 3. A. Section 12-36-140(C) of the 1976 Code, as added by Section 74A, Part II, Act 612 of 1990, is amended to read:

"(C) 'Storage' and 'use' do not include the keeping, retaining, or exercising of any right or power over tangible personal property:

(1) for the exclusive purpose of subsequently transporting it outside the State for first use,; or

(2) for the purpose of first being manufactured, processed, or compounded into other tangible personal property to be transported and used solely outside the State; or

(3) for the purpose of being distributed as cooperative direct mail promotional advertising materials by means of interstate carrier, a mailing house, or a United States Post Office to residents of this State from locations both inside and outside the State. For purposes of this item, 'cooperative direct mail promotional advertising materials' means discount coupons, advertising leaflets, and similar printed advertising, including any accompanying envelopes and labels which are distributed with promotional advertising materials of more than one business in a single package to potential customers, at no charge to the potential customer, of the businesses paying for the delivery of the material."

B. Section 12-36-2120 of the 1976 Code, is amended by adding an appropriately numbered item to read:

"( ) cooperative direct mail promotional advertising materials delivered by means of interstate carrier, a mailing house, or a United States Post Office to residents of this State from locations both inside and outside the State. For purposes of this item, 'cooperative direct mail promotional advertising materials' means discount coupons, advertising leaflets, and similar printed advertising, including any accompanying envelopes and labels which are distributed with promotional advertising materials of more than one business in a single package to potential customers, at no charge to the potential customer, of the businesses paying for the delivery of the material."

SECTION 4. This act takes effect upon approval by the Governor.

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