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COMMITTEE REPORT
April 19, 2001
H. 3663
S. Printed 4/19/01--H. [SEC 4/23/01 10:12 AM]
Read the first time March 6, 2001.
To whom was referred a Bill (H. 3663) to amend Section 12-16-20, Code of Laws of South Carolina, 1976, relating to definitions for purposes of the South Carolina Estate Tax Act, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
ROBERT W. HARRELL, JR. for Committee.
REVENUE IMPACT1
This bill would reduce general fund estate tax revenue an estimated $275,000 in FY 2001-02.
Explanation
This bill would broaden the definition of the maximum of "federal credit" allowable by Internal Revenue Code Section 2011. According to the Department of Revenue, there are an estimated five tax filings each year that would be affected by this change. The Department of Revenue has advised the BEA that the average difference in the computation of estate taxes is an estimated $55,000 per tax return. Multiplying $55,000 by five taxpayers yields a reduction of general fund estate tax revenue of an estimated $275,000 in FY 2001-02.
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.
TO AMEND SECTION 12-16-20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS FOR PURPOSES OF THE SOUTH CAROLINA ESTATE TAX ACT, SO AS TO PROVIDE FOR THE ORDER IN WHICH FEDERAL ESTATE TAX CREDITS ARE APPLIED FOR PURPOSES OF DETERMINING A STATE ESTATE TAX LIABILITY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-16-20(2) of the 1976 Code is amended to read:
"(2) 'Federal credit' means the maximum amount of the credit for state death taxes allowable by Internal Revenue Code Section 2011. The term 'maximum amount' must be construed so as to take full advantage of the credit as allowed by the Internal Revenue Code Section 2011, but (a) only after taking into account other federal estate tax credits permitted by the Internal Revenue Code and (b) not in excess of the amount necessary to reduce the federal estate tax to zero."
SECTION 2. This act takes effect upon approval by the Governor and applies to the calculation of South Carolina estate taxes due on or after that date.
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