South Carolina General Assembly
113th Session, 1999-2000

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Bill 4904


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Bill Number:                      4904
Type of Legislation:              General Bill GB
Introducing Body:                 House
Introduced Date:                  20000412
Primary Sponsor:                  Robinson
All Sponsors:                     Robinson
Drafted Document Number:          l:\council\bills\dka\3822mm00.doc
Companion Bill Number:            1335
Residing Body:                    House
Current Committee:                Ways and Means Committee 30 HWM
Subject:                          Revenue Department, Taxation; Property 
                                  assessments, Income tax, returns; Electronic 
                                  Commerce, Internet, Computers


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
------  20000418  Companion Bill No. 1335
House   20000412  Introduced, read first time,           30 HWM
                  referred to Committee


              Versions of This Bill

View additional legislative information at the LPITS web site.


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

A BILL

TO AMEND SECTION 12-2-75, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SIGNATORIES TO TAX RETURNS, SO AS TO PROVIDE FOR SIGNATURE BY THE MANAGER OR AUTHORIZED GENERAL PARTNER OF A PARTNERSHIP RETURN AND FOR SIGNATURE BY AN AUTHORIZED OFFICER OR OWNER OF AN ENTITY OTHER THAN A CORPORATION, PARTNERSHIP, OR TRUST AND ESTATE, AND TO PROVIDE FOR OTHER AUTHORIZATIONS FOR SIGNING, INCLUDING FILING AND DEPOSITING SIGNATURES WITH AND KEEPING OR FORWARDING SIGNATURES BY A THIRD PARTY; BY ADDING SECTION 12-4-780 TO CHAPTER 4, TITLE 12 SO AS TO PROVIDE FOR PAYMENTS TO THE DEPARTMENT OF REVENUE BY CREDIT CARD; TO AMEND SECTION 12-6-4910, AS AMENDED, RELATING TO PERSONS AND ENTITIES REQUIRED TO MAKE A STATE INCOME TAX RETURN, SO AS TO INCLUDE AN INDIVIDUAL WHOSE FEDERAL FILING STATUS IS MARRIED, FILING SEPARATELY, AND WHOSE SPOUSE DOES NOT ITEMIZE DEDUCTIONS AMONG THOSE WHO MUST FILE IF THEY HAVE A GROSS INCOME OF A CERTAIN SUM, WITHOUT REGARD TO ANY REDUCTION FOR THE RETIREMENT INCOME DEDUCTION; TO AMEND SECTION 12-8-550, RELATING TO WITHHOLDING OF PAYMENTS MADE TO A NONRESIDENT, SO AS TO EXEMPT PAYMENTS MADE ON PURCHASE ORDERS FOR TANGIBLE PERSONAL PROPERTY WHEN NOT ACCOMPANIED BY SERVICES PERFORMED IN THIS STATE; TO AMEND SECTION 12-8-580, RELATING TO WITHHOLDING INCOME TAX BY THE BUYER OF REAL PROPERTY OR ASSOCIATED TANGIBLE PERSONAL PROPERTY FROM A NONRESIDENT SELLER, SO AS TO EXCLUDE THE SALE OF A PRINCIPAL RESIDENCE FROM THE DESCRIPTION OF A "SALE"; TO AMEND SECTION 12-10-35, AS AMENDED, RELATING TO MORATORIUM ON STATE CORPORATE INCOME TAXES FOR JOB CREATION, SO AS TO PROVIDE FOR CALCULATION OF THE STATE AVERAGE UNEMPLOYMENT RATE BASED ON THE TWO MOST RECENT CALENDAR YEARS OF AVAILABLE DATA INSTEAD OF THE LAST TWO COMPLETED CALENDAR YEARS; TO AMEND CHAPTER 6, TITLE 12, RELATING TO THE SOUTH CAROLINA INCOME TAX ACT, BY ADDING SECTION 12-6-5095 SO AS TO PROVIDE FOR THE ROUNDING TO THE NEAREST WHOLE DOLLAR OF AMOUNTS OF FILED RETURNS; TO AMEND SECTION 12-36-550, RELATING TO THE DURATION OF VALIDITY OF A RETAIL SALES LICENSE, SO AS TO PROVIDE FOR DETERMINING IF A RETAILER IS CONTINUING IN THE SAME BUSINESS; TO AMEND SECTION 12-36-2670, RELATING TO ADMINISTRATION OF OATHS AND TAKING ACKNOWLEDGEMENTS IN CONNECTION WITH TAX RETURNS OR REPORTS, SO AS TO CHANGE REFERENCES FROM "COMMISSIONERS" AND "COMMISSION" TO "DIRECTOR" AND "DEPARTMENT"; TO AMEND SECTION 12-36-2120, AS AMENDED, RELATING TO EXEMPTIONS FROM THE SALES AND USE TAX, SO AS TO DELETE CERTAIN EFFECTIVE DATES; TO AMEND SECTION 12-44-160, RELATING TO LIBERAL CONSTRUCTION OF CHAPTER 44, THE "FEE IN LIEU TAX SIMPLIFICATION ACT OF 1997", SO AS TO PROVIDE FOR A PROCEDURE FOR QUALIFICATION OF ECONOMIC DEVELOPMENT PROPERTY FOR PAYMENT OF A FEE IN LIEU OF TAXES PURSUANT TO CHAPTER 12 OF TITLE 4 OR SECTION 4-29-67 IF THE FEE IN LIEU OF TAX SIMPLIFICATION ACT IS DETERMINED TO BE UNCONSTITUTIONAL OR OTHERWISE ILLEGAL; TO AMEND SECTION 12-54-25, AS AMENDED, RELATING TO INTEREST DUE ON LATE TAXES, SO AS TO PROVIDE FOR CALCULATION OF THE INTEREST AMOUNT DUE WHEN NO RETURN IS REQUIRED ON A CERTAIN DATE; TO AMEND SECTION 12-54-43, RELATING TO CIVIL PENALTIES AND DAMAGES IN CONNECTION WITH TAX COLLECTION AND ENFORCEMENT, SO AS TO DELETE THE MINIMUM PENALTY OF ONE HUNDRED DOLLARS OR ONE HUNDRED PERCENT OF THE TAX OWED AS PRESCRIBED FOR FAILURE TO FILE A RETURN FOR TAX WITHIN SIXTY DAYS; AND TO AMEND SECTION 12-54-100, RELATING TO EXAMINATION OF A TAXPAYER'S RECORDS, EQUIPMENT, AND LICENSES IN ENFORCEMENT OF THE STATE'S TAX LAWS, SO AS TO PROVIDE THAT THE DIRECTOR OF THE DEPARTMENT OF REVENUE, OR HIS AGENT, HAS ACCESS TO THE TAXPAYER'S PLACE OF BUSINESS, TANGIBLE PERSONAL PROPERTY, FACILITIES, COMPUTERS, COMPUTER PROGRAMS, AND ELECTRONIC DATA IN ADDITION TO RECORDS, EQUIPMENT, AND LICENSES, TO REQUIRE THAT THE TAXPAYER FACILITATE THE EXAMINATION, AND TO ALLOW THE DIRECTOR TO USE REASONABLE AUDIT METHODS, INCLUDING SAMPLING; TO AMEND SECTION 12-54-227, AS AMENDED, RELATING TO OUT-OF-STATE COLLECTION OF DELINQUENT TAXES, SO AS TO AUTHORIZE THE DEPARTMENT OF REVENUE TO REFUND SERVICES FEES TO A COLLECTION AGENCY IF IT REMITS GROSS FUNDS AND TO CHANGE "COMMISSION" TO "DEPARTMENT"; TO AMEND SECTION 12-54-240, AS AMENDED, RELATING TO DISCLOSURE OF RECORDS AND FILINGS OF THE DEPARTMENT OF REVENUE, SO AS TO ALLOW DISCLOSURE OF INFORMATION FILED IN CONNECTION WITH THE ACCOMMODATIONS TAX AND THE TOURISM ADMISSIONS TAX; TO AMEND SECTION 12-60-3370, RELATING TO BOND REQUIREMENTS FOR APPEAL OF A DECISION PURSUANT TO THE REVENUE PROCEDURES ACT, SO AS TO DELETE THE REQUIREMENT THAT THE BOND COVER PENALTY AMOUNTS; TO AMEND SECTION 26-5-20, RELATING TO THE PURPOSES OF THE ELECTRONIC COMMERCE ACT, SO AS TO PROVIDE THAT A FURTHER PURPOSE OF THE ACT IS TO FACILITATE AND PROMOTE INTERSTATE AND INTERNATIONAL USE OF ELECTRONIC COMMERCE AND ONLINE GOVERNMENT; TO AMEND ARTICLE 3, CHAPTER 5 OF TITLE 26, RELATING TO THE ELECTRONIC COMMERCE ACT AND ELECTRONIC SIGNATURES AND RECORDS, BY ADDING SECTION 26-5-370 SO AS TO PROVIDE THAT ELECTRONIC SIGNATURES OR RECORDS FROM OTHER JURISDICTIONS HAVING COMMENSURATE REQUIREMENTS AND WHICH GRANT RECIPROCAL RECOGNITION TO ELECTRONIC SIGNATURES OR RECORDS FROM SOUTH CAROLINA MUST BE AFFORDED THE SAME STATUS, EFFECT, VALIDITY, AND ENFORCEABILITY AS THOSE RECOGNIZED UNDER SOUTH CAROLINA'S ELECTRONIC COMMERCE ACT; TO AMEND CHAPTER 5, TITLE 26, RELATING TO THE ELECTRONIC COMMERCE ACT, BY ADDING ARTICLE 7 SO AS TO PROVIDE FOR THE APPLICABILITY OF THE COMPUTER CRIME ACT TO THE ELECTRONIC COMMERCE ACT; AND TO REPEAL SECTION 12-4-755 RELATING TO APPEAL OF A PROPERTY TAX EXEMPTION DENIAL.

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

SECTION 1. A. Section 12-2-75 of the 1976 Code, as last amended by Act 114 of 1997, is further amended to read:

"Section 12-2-75. (A) Returns filed by taxpayers with the department must be signed by the following:

(1) corporate returns by an authorized officer of the corporation;

(2) partnership returns by a its manager or an authorized general partner of the partnership;

(3) trust and estate returns by the trustee, personal representative, executor, or administrator, whichever is applicable;

(4)(a) except as provided in subsections subitems (b) and (c), individual returns must be signed by the individual;

(b) deceased individual returns for individuals who would have been required to file a state tax return while living by the personal representative, administrator, or executor of the decedent's estate and the tax must be levied upon and collected from the estate;

(c) if an individual is unable to make a return or payment, including an estimated tax payment, it must be made by an authorized agent, a guardian, or other person charged with the conduct of the business of the taxpayer;

(5) returns for any other person by an authorized officer or owner.

(B) In the instructions to a return, or otherwise, the department may authorize taxpayers to sign returns by other means, including electronically, and may authorize the signature to be filed or deposited with and be kept or forwarded by a third party."

B. Chapter 4, Title 12 of the 1976 Code is amended by adding:

"Section 12-4-780. The department may accept, on terms and conditions it establishes, payments to it by credit cards. This authority includes a determination not to accept credit card payments or to accept credit card payments only for certain classes of payments as specified by the department. Notwithstanding another provision of law, the State Treasurer may enter into contracts on behalf of the department by which the department may accept credit card payments. The department may withhold the actual cost of processing credit card payments from deposits of the payments and may treat these withholdings as reimbursements of the associated expenditures."

C. Section 12-6-4910(1)(a) of the 1976 Code, as last amended by Act 114 of 1999, is further amended to read:

"(a) an individual not listed in subitem (c) whose federal filing status is single, surviving spouse, or head of household who has a gross income for the taxable year of at least the federal exemption amount plus the applicable basic standard deduction, plus any deduction the taxpayer qualifies for pursuant to Section 12-6-1170(B). If the individual is sixty-five or older, the standard deduction is increased as provided in Internal Revenue Code Section 63(c)(3) and 63(f)(1)(A), without regard to a reduction for the retirement income deduction, and whose filing status is:

(i) single, surviving spouse, or head of household; or

(ii) married, filing separately, and whose spouse does not itemize deductions."

D. Section 12-8-550 of the 1976 Code, as added by Act 76 of 1995, is amended to read:

"Section 12-8-550. (A) A person hiring or contracting with a nonresident conducting a business or performing personal services of a temporary nature within this State shall withhold two percent of each payment in which the South Carolina portion of the contract exceeds or could reasonably be expected to exceed ten thousand dollars. This item section does not apply to a nonresident which registered with the Secretary of State or the Department of Revenue and by that registration has agreed to be subject to the jurisdiction of the department and the courts of this State to determine its South Carolina tax liability, including withholding and estimated taxes, together with any related interest and penalties, if any. Registering with the Secretary of State or the department is not an admission of tax liability nor must this act of registering be construed to does it require the filing of an income tax or franchise (license) tax return. If the person hiring, contracting, or having a contract with a nonresident obtains an affidavit from the nonresident stating that the nonresident is registered with the department or with the Secretary of State, the person is not responsible for the withholding.

(B) The department may revoke the exemption granted by registering with the Secretary of State or the department if it determines that the nonresident taxpayer is not cooperating with the department in the determination of the nonresident taxpayer's correct South Carolina tax liability. This revocation does not revive the duty of a person hiring, contracting, or having a contract with a nonresident to withhold, until the person receives notice of the revocation.

(C) This section does not apply to payments on purchase orders for tangible personal property when those payments are not accompanied by services to be performed in this State."

E. Section 12-8-580(B)(2) of the 1976 Code, as added by Act 76 of 1995, is amended to read:

"(2) A sale does not include tax exempt or tax deferred transactions, other than installment sales. The sale of a principal residence is considered a deferred transaction which is not subject to withholding if the following conditions are met:

(a) the seller reinvests the proceeds into a new principal residence pursuant to Internal Revenue Code Section 1034 or elects the one time exclusion pursuant to Internal Revenue Code Section 121; and

(b) the buyer obtains an affidavit described in subsection (E) which states that:

(i) the sale is not subject to tax because Internal Revenue Code Section 1034 or 121 applies;

(ii) the seller acknowledges his obligation to file a South Carolina income tax return for the year of the sale; and

(iii) the seller acknowledges his obligation to file an amended South Carolina income tax return for the year of the sale if the seller fails to comply with Internal Revenue Code Section 1034."

F. Section 12-10-35(A) of the 1976 Code, as last amended by Act 100 of 1999, is further amended to read:

"(A) If a qualifying business creates at least one hundred new full-time jobs, as defined and determined in Section 12-6-3360, in a county (1) with an average annual unemployment rate of at least twice the state average during each of the last two completed calendar years based on the two most recent calendar years of data available on November 1 of the preceding year, or (2) which is one of the three lowest per capita income counties based on the average of the three most recent years of average per capita income data, and at least ninety percent of the investment of the qualifying business in this State is in that county, then the company is allowed a moratorium on state corporate income taxes imposed pursuant to Section 12-6-530 for the company's first ten taxable years beginning with the taxable year after it first qualifies. The moratorium applies to that portion of the company's corporate income tax that represents the ratio that the company's new investment is of its total investment in this State."

SECTION 2. Chapter 6, Title 12 of the 1976 Code is amended by adding:

"Section 12-6-5095. For purposes of a return filed pursuant to this chapter, all amounts may be rounded by the department or the taxpayer to the nearest whole dollar. An amount of fifty cents or more may be rounded to the next dollar. An amount of less than fifty cents may be eliminated."

SECTION 3. Section 12-36-550 of the 1976 Code, as added by Act 612 of 1990, is amended to read:

"Section 12-36-550. The license provided for in this article:

(1) is valid so long as the person to whom it is issued continues in the same business, unless revoked by the commission department. It is presumed that a retailer is not continuing in the same business and must surrender the retail sales license if the retailer has no retail sales for twenty-four consecutive months. To allow the license to remain valid, the retailer may submit an affidavit to the department swearing that the business is continuing;

(2) must at all times be conspicuously displayed at the place for which it was issued;

(3) is not transferable or assignable."

SECTION 4. Section 12-36-2670 of the 1976 Code, as added by Act 361 of 1992, is amended to read:

"Section 12-36-2670. The commissioners director or their designees his designee may administer an oath to a person or take the acknowledgement of a person with respect to a return or report required by this title or the regulations of the commission department."

SECTION 5. Section 12-36-2120(40), (41), and (42) of the 1976 Code are amended to read:

"(40) containers and chassis, including all parts, components, and attachments, sold to international shipping lines which have a contractual relationship with the South Carolina State Ports Authority and which are used in the import or export of goods to and from this State. The exemption allowed by this item is effective for sales after June 30, 1982;

(41) items sold by organizations exempt under Section 12-37-220 A(3) and (4) and B(5), (6), (7), (8), (12), (16), (19), (22), and (24), if the net proceeds are used exclusively for exempt purposes and no benefit inures to any individual. An organization whose sales are exempted by this item is also exempt from the retail license tax provided in Article 5 of this chapter. The exemption allowed by this item is effective for sales after June 30, 1989;

(42) depreciable assets, used in the operation of a business, pursuant to the sale of the business. This exemption only applies when the entire business is sold by the owner of it, pursuant to a written contract and the purchaser continues operation of the business. The exemption allowed by this item is effective for sales after June 30, 1987.;"

SECTION 6. Section 12-44-160 of the 1976 Code, as added by Act 149 of 1997, is amended to read:

"Section 12-44-160. This chapter must be construed liberally in accordance with the findings in Section 12-44-20 with due regard to the paramount importance of the county council approvals required throughout this chapter. If the General Assembly adopts enabling legislation, property that would be exempt under this chapter but is held not to be exempt because of the unconstitutionality or illegality of this chapter, or any portion of it, is exempt from property tax under Section 4-29-67 or Chapter 12 of this title if the project and county approval would have met the requirements for exemption under them, except that fees in lieu of taxes must have been, and must continue to be, made in the amounts required by Section 4-29-67 or Chapter 12 of this title. If all or part of this chapter is determined to be unconstitutional or otherwise illegal by a court of competent jurisdiction, a sponsor has one hundred eighty days from the date of the determination to transfer title to economic development property to the county and have it qualify for a fee in lieu of taxes pursuant to Chapter 12 of Title 4 or Section 4-29-67."

SECTION 7. A. Section 12-54-25(C) of the 1976 Code, as last amended by Act 432 of 1998, is further amended to read:

"(C)(1) Any tax refunded or credited must include interest on the amount of the credit or refund from the later latest of either the date the tax was paid, or the original due date of the return, or the last day prescribed for paying the tax if no return is required, to either the date the refund was sent or delivered to the taxpayer or the date the credit was made.

(2) This interest must be paid by drawing upon funds from the type of tax being refunded or credited. The funds withdrawn may be expended by the department in the payment of interest on refunds.

(3) Interest on an overpayment is not allowed pursuant to this subsection on an overpayment if it is refunded:

(a) within seventy-five days after the last day prescribed for filing the tax return, without regard to an extension of time for filing, or within seventy-five days after the last day prescribed for paying the tax if no return is required;

(b) within seventy-five days after the return is filed, in the case of a return filed after the last date; or

(c) within seventy-five days after the taxpayer files a claim for a credit or refund for the overpayment of tax for the period between the filing of the claim to the payment of the refund."

B. Section 12-54-43(C) of the 1976 Code, as added by Act 114 of 1999, is amended to read:

"(C)(1) In the case of failure to file a return on or before the date prescribed by law, determined with regard to any extension of time for filing, there must be added to the amount required to be shown as tax on the return, a penalty of five percent of the amount of the tax if the failure is for not more than one month, with an additional five percent for each additional month or fraction of the month during which the failure continues, not exceeding twenty-five percent in the aggregate.

(2) In case of a failure to file a return of tax within sixty days of the date prescribed for filing the return, determined with regard to any extension of time for filing, the addition to tax must not be less than the lesser of one hundred dollars or one hundred percent of the amount required to be shown as tax on the return, except in those cases in which the tax owed is one hundred dollars or less.

(3) For the purpose of this subsection, the amount of tax required to be shown on the return must be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed upon the return."

C. Section 12-54-100 of the 1976 Code is amended to read:

"Section 12-54-100. (A) In the administration of a state tax law, the Commission or its director or his duly authorized agent, may for the purpose of ascertaining the correctness of any a return, or making a determination of the or fixing tax liability, or inspection of licenses, may examine the or investigate the place of business, tangible personal property, facilities, computers, computer programs, electronic data, books, invoices, papers, records, memoranda, vouchers, other documents, equipment, or licenses of the taxpayer or other person bearing upon the matters required to be included on any a return.

(B) The taxpayer or other person and his agents and employees shall exhibit to the director these places and items and facilitate the examination or investigation.

(C) A taxpayer, upon request, may delay the examination up to thirty days., except that the provisions of this section subsection do not apply if there is reasonable evidence that the taxpayer is about to destroy or remove the books, papers, records, or memoranda items from the State or otherwise make them unavailable for examination or inspection investigation.

(D) The director may employ proper and reasonable audit methods necessary to the examination or investigation, including the use of sampling."

SECTION 8. Section 12-54-227(B) of the 1976 Code, as added by Act 50 of 1991, is amended to read:

"(B)(1) Fees for services, reimbursements, or other remuneration to the collection agency must be based on the amount of tax, penalty, and interest actually collected. Each contract entered into between the commission department and the collection agency must provide for the payment of fees for these services, reimbursements, or other remuneration not in excess of fifty percent of the total amount of delinquent taxes, penalties, and interest actually collected.

(2) All funds collected, less the fees for collection services as provided in the contract, must be remitted to the commission department within forty-five days from the date of collection from a taxpayer. The department may refund the fees for collection services to the collection agency, if all funds collected are remitted gross of fees. Forms to be used for these remittances must be prescribed by the commission department."

SECTION 9. Section 12-54-240(B) of the 1976 Code is amended by adding at the end:

"(21) disclosure of information filed in a return pursuant to Chapter 36, Title 12, for accommodations taxes imposed pursuant to Section 12-36-920 and collected by and reported to the Department of Parks, Recreation and Tourism including, but not limited to, statistics reflecting tourism activity;

(22) disclosure of information contained in a return filed pursuant to Article 17, Chapter 21, Title 12, for the purpose of complying with the Tourism Infrastructure Admissions Tax Act."

SECTION 10. Section 12-60-3370 of the 1976 Code, as added by Act 60 of 1995, is amended to read:

"Section 12-60-3370. Except as otherwise provided below, a taxpayer shall pay, or post a bond for, all taxes, including interest, penalties, and other amounts, not including penalties, determined to be due by the Administrative Law Judge or DMV hearing officer before appealing the decision to the circuit court. For property tax cases covered by Section 12-60-2140 or 12-60-2550, the taxpayer need pay only pay the amount assessed under pursuant to the appropriate section."

SECTION 11. A. Section 26-5-20 of the 1976 Code, as added by Act 374 of 1998, is amended by adding:

"(5) facilitate and promote interstate and international use of electronic commerce and online government."

B. Article 3, Chapter 5 of Title 26 of the 1976 Code, as added by Act 374 of 1998, is amended by adding:

"Section 26-5-370. Electronic signatures or records from other jurisdictions having commensurate requirements as provided for in this chapter and which also grant reciprocal recognition to electronic signatures or records from this State must be afforded the same status, effect, validity, and enforceability as those recognized under this chapter."

C. Chapter 5, Title 26 of the 1976 Code, as added by Act 374 of 1998, is amended by adding:

"Article 7

Applicability of Computer Crime Act

Section 26-5-710. The Computer Crime Act, as contained in Chapter 16 of Title 16, is expressly made applicable to and incorporated in Chapter 5 of Title 26."

SECTION 12. Section 12-4-755 of the 1976 Code is repealed.

SECTION 13. This act takes effect upon approval by the Governor, except that SECTION 1F applies to taxable years beginning after December 31, 2000; SECTION 2 applies to returns filed after December 31, 1999; SECTION 7A applies to taxable periods ending after December 31, 1999; and SECTION 7B applies to tax returns due after October 31, 2000, and does not affect an action or proceeding commenced or a right accrued before October 1, 2000.

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