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Bill 3777

Indicates Matter Stricken

Indicates New Matter

COMMITTEE REPORT

April 19, 2001

    H. 3777

S. Printed 4/19/01--H.

Read the first time March 21, 2001.

    To whom was referred a Bill (H. 3777) to amend Chapter 10, Title 12, Code of Laws of South Carolina, 1976, relating to the Enterprise Zone Act, by adding Section 12-10-95, etc., respectfully

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

    Amend the bill, as and if amended, by striking all after the enacting words and inserting:

    / SECTION    1.    Chapter 10, Title 12 of the 1976 Code is amended by adding:

    "Section 12-10-95.    (A)    Subject to the conditions in this section, a business engaged in manufacturing or processing operations or technology intensive activities at a manufacturing, processing, or technology intensive facility as defined in Section 12-6-3360(M) and that meets the requirements of Section 12-10-50(B) may negotiate with the council to claim as a credit against withholding five hundred dollars a year for the retraining of a production or technology employee if retraining is necessary for the qualifying business to remain competitive or to introduce new technologies. In addition to the yearly limits, the retraining credit claimed against withholding may not exceed two thousand dollars over five consecutive years for each retrained production or technology employee.

    (B)    A qualifying business is eligible to claim as a retraining credit against withholding the lower amount of the following:

        (1)    the retraining credit for the applicable withholding period as determined by subsection (A); or

        (2)    withholding paid to the State for the applicable withholding period.

    (C)    All retraining must be approved by a technical college under the jurisdiction of the State Board for Technical and Comprehensive Education. A qualifying business must submit a retraining program for approval by the appropriate technical college. The approving technical college may provide the retraining itself, subject to the retraining program, or contract with other training entities to provide the required retraining.

    (D)    Travel and lodging expenses and wages for retraining participants are not reimbursable.

    (E)    The qualifying business must match on a dollar-for-dollar basis the amount claimed as a credit against withholding for retraining. When applicable, the total amount of retraining credits and matching funds must be paid to the technical college that provides the training. All training costs, including costs in excess of the retraining credits and matching funds, are the responsibility of the business.

    (F)    A qualifying business claiming retraining credits pursuant to this section is subject to the reporting and audit requirements in Section 12-10-80(A).

    (G)    A qualifying business may not claim retraining credit for training provided to the following production or technology employees:

        (a)    temporary or contract employees; and

        (b)    employees who are subject to a revitalization agreement, including a preliminary revitalization agreement."

    SECTION    2.    Section 12-2-25 of the 1976 Code is amended to read:

    "Section 12-2-25.    (A)    As used in this title and unless otherwise required by the context:

        (1)    'partnership' includes a limited liability company taxed for South Carolina income tax purposes as a partnership.;

        (2)    'partner'    includes any a member of a limited liability company taxed for South Carolina income tax purposes as a partnership.;

        (3)    'corporation' includes a limited liability company or professional or other association taxed for South Carolina income tax purposes as a corporation.; and

        (4)    'shareholder' includes any a member of a limited liability company taxed for South Carolina income tax purposes as a corporation.

    (B)    Single-member limited liability companies which are not taxed for South Carolina income tax purposes as a corporation, and grantor trusts, to the extent they are grantor trusts, will be ignored for all South Carolina tax purposes. For South Carolina tax purposes:

        (1)    a single-member limited liability company, which is not taxed for South Carolina income tax purposes as a corporation, is not regarded as an entity separate from its owner;

        (2)    a 'qualified subchapter 'S' subsidiary', as defined in Section 1361(b)(3)(B) of the Internal Revenue Code, is not regarded as an entity separate from the 'S' corporation that owns the stock of the qualified subchapter 'S' subsidiary; and

        (3)    a grantor trust, to the extent that it is a grantor trust, is not regarded as an entity separate from its grantor.

    (C)    For purposes of this section, the Internal Revenue Code reference is as provided in Section 12-6-40(A)."

    SECTION    3.    Section 12-6-40 of the 1976 Code, as last amended by Section 7, Part II, Act 387 of 2000, is further amended to read:

    "Section 12-6-40.    (A)(1)    'Internal Revenue Code' means the Internal Revenue Code of 1986 as amended through December 31, 1999 2000, and includes the effective date provisions contained therein in it.

        (2)(a)    For purposes of this title, 'Internal Revenue Code' is deemed to contain all changes necessary for the State to administer its provisions. Unless a different meaning is required:

                ( i)    'Secretary', 'Secretary of the Treasury', or 'Commissioner' means the Director of the Department of Revenue.

                ( ii)    'Internal Revenue Service' means the department.

                (iii)    'Return' means the appropriate state return.

                ( iv)    'Income' includes the modifications required by Article 9 of this chapter and allocation and apportionment as provided in Article 17 of this chapter.

    Other terms in the Internal Revenue Code must be given the meanings necessary to effectuate this item.

            (b)    For purposes of Internal Revenue Code Sections 67 (Two Percent Floor on Miscellaneous Itemized Deductions), 71 (Alimony and Separate Maintenance Payments), 85 (Unemployment Compensation), 165 (Losses), 170 (Charitable Contributions), 213 (Medical and Dental Expenses), 219 (Retirement Savings), 469 (Passive Activity Losses and Credits Limited), and 631 (Gain or Loss in the Case of Timber, Coal, or Domestic Iron Ore), 'Adjusted Gross Income' for South Carolina income tax purposes means a taxpayer's adjusted gross income for federal income tax purposes without regard to the adjustments required by Article 9 and Article 17 of this chapter.

            (c)    For a taxpayer utilizing the provisions of Internal Revenue Code Section 1341 (Computation of Tax where Taxpayer Restores Substantial Amount Held under Claim of Right) for South Carolina tax purposes the phrase 'taxes imposed by this chapter' means taxes imposed by Chapter 6 of this title.

            (d)    The terms defined in Internal Revenue Code Sections 7701, 7702, and 7703 have the same meaning for South Carolina income tax purposes, unless a different meaning is clearly required.

    (B)    All elections made for federal income tax purposes in connection with Internal Revenue Code Sections adopted by this State automatically apply for South Carolina income tax purposes unless otherwise provided. A taxpayer may not make an election solely for South Carolina income tax purposes except for elections not applicable for federal purposes, including filing a combined or composite return as provided in Sections 12-6-5020 and 12-6-5030, respectively.

    (C)    For purposes of Internal Revenue Code Sections 67 (Two Percent Floor on Miscellaneous Itemized Deductions), 71 (Alimony and Separate Maintenance Payments), 85 (Unemployment Compensation), 165 (Losses), 170 (Charitable Contributions), 213 (Medical and Dental Expenses), 219 (Retirement Savings), 469 (Passive Activity Losses and Credits Limited), and 631 (Gain or Loss in the Case of Timber, Coal, or Domestic Iron Ore), "Adjusted Gross Income" for South Carolina income tax purposes means a taxpayer's adjusted gross income for federal income tax purposes without regard to the adjustments required by Article 9 and Article 17 of this chapter.

    (D)    For a taxpayer utilizing the provisions of Internal Revenue Code Section 1341 (Computation of Tax where Taxpayer Restores Substantial Amount Held under Claim of Right) for South Carolina tax purposes the phrase "taxes imposed by this chapter" means taxes imposed by Chapter 6 of this title.

    (E)    The terms defined in Internal Revenue Code Sections 7701, 7702, and 7703 have the same meaning for South Carolina income tax purposes, unless a different meaning is clearly required.

    (F)(C)    If a taxpayer complies with the provisions of Internal Revenue Code Section 367 (Foreign Corporations), it is not necessary for the taxpayer to obtain the approval of the department. The taxpayer shall attach a copy of the approval received from the Internal Revenue Service to its next South Carolina income tax return."

    SECTION    4.    Section 12-6-50(11) of the 1976 Code is amended to read:

    "(11)    Sections 861 through 908, 912, and 931 through 940, and 944 through 989 relating to the taxation of foreign income;"

    SECTION    5.    Section 12-6-2210(A) of the 1976 Code is amended to read:

    "(A)    If the entire business of a taxpayer is transacted or conducted within this State, the income tax as provided in this chapter is measured by the entire net income of the taxpayer for the taxable year. The entire business of the taxpayer is transacted and or conducted within the State if the taxpayer is not subject to a net income tax or a franchise tax measured by net income in another state, the District of Columbia, a territory or possession of the United States, or a foreign country, or and would not be subject to a net income tax in another such taxing jurisdiction if the other taxing jurisdiction adopted the net income tax laws of this State."

    SECTION    6.    Section 12-6-3330(C)(2) of the 1976 Code is amended to read:

    "(2)    The term 'South Carolina earned income' means income which that is earned income within the meaning of Internal Revenue Code Section 911(d)(2) or 401(c)(2)(C) which and is taxable in this State, except that:

        (a)    it does not include an amount:

            ( i)    received from a retirement plan or an annuity;

            ( ii)    paid or distributed from an individual retirement plan as defined in Internal Revenue Code Section 7701(a)(37);

            (iii)    received as deferred compensation; or

            ( iv)    received for services performed by an individual employed by his spouse within the meaning of Internal Revenue Code Section 3121(b)(3)(A)(B) as amended through December 31, 1987; and

        (b)    Internal Revenue Code Section 911(d)(2)(B) must be applied without regard to the phrase 'not in excess of thirty percent of his share of net profits of such trade or business'."

    SECTION    7.    Section 12-6-3410(J)(1) and (4) are amended to read:

    "(1)    'Corporate headquarters' means the facility or portion of a facility where corporate staff employees are physically employed, and where the majority of the company's financial, personnel, legal, planning, information technology, or other headquarters related functions are handled either on a regional or national basis. A corporate headquarters must be a regional corporate headquarters or a national corporate headquarters as defined below:

        (a)    National corporate headquarters must be the sole corporate headquarters in the nation and handle headquarters related functions on a national basis. A national headquarters shall be deemed to handle headquarters related functions on a national basis from this State if the corporation has a facility in this State from which the corporation engages in interstate commerce by providing goods or services for customers outside of this State in return for compensation.

        (b)    Regional corporate headquarters must be the sole corporate headquarters within the region and must handle headquarters related functions on a regional basis. For purposes of this section, 'region' or 'regional' means a geographic area comprised of either:

            ( i)    at least five states, including this State, or

            (ii)    two or more states, including this State, if the entire business operations of the corporation are performed within fewer than five states.

    (4)    'Headquarters related functions and services' are those functions involving financial, personnel, administrative, legal, planning, information technology, or similar business functions."

    SECTION    8.    Section 12-6-3500 of the 1976 Code is amended to read:

    "Section 12-6-3500.    If the right to receive retirement income by a taxpayer allowed the deduction pursuant to Section 12-6-1170 was earned by the taxpayer while residing in another state which imposed state income tax on the employee's contributions, a credit is allowed against the taxpayer's South Carolina income tax liability in an amount sufficient to offset the taxes paid the other state. This credit must be claimed over the taxpayer's lifetime. The department shall prescribe the amount of the annual credit based on the taxpayer's life expectancy at the time of the election made pursuant to the taxpayer first claims the retirement income deduction pursuant to Section 12-6-1170, and may require the documentation it determines necessary to verify the amount of income tax paid the other state on the contributions. Regardless of the tax rates applicable on the contributions in the other state, the total of the credit allowed may not exceed an amount determined by multiplying the contributions taxed in each year by the marginal South Carolina individual income tax rate for that year."

    SECTION    9.    Section 12-6-3520 of the 1976 Code is amended to read:

    "Section 12-6-3520.    (A)    There shall be is allowed as a tax credit against the income tax liability of a taxpayer an amount equal to fifty percent of the costs incurred by the taxpayer for habitat management or construction and maintenance of improvements on real property that are made to land as described in Section 50-15-55(A) and which meets meet the requirements of regulations promulgated by the Department of Natural Resources pursuant to Section 50-15-55(A). For purposes of this section, 'costs incurred' means those monies spent or revenue foregone for habitat management or construction and maintenance, but does not include revenue foregone as increases in land values or speculative costs related to development.

    (B)    All costs must be incurred on land that has been designated as a certified management area for endangered species enumerated in Section 50-15-40 or for nongame and wildlife species determined to be in need management under Section 50-15-30.

    (C)    The tax credit allowed by this section must be claimed in the year that such the costs, as provided in subsection (B), are incurred as provided for in subsection (B). The This credit established by this section taken in one year may not exceed fifty percent of the taxpayer's income tax liability due pursuant to Section 12-6-510 or 12-6-530 for that year. If the amount of the credit exceeds the taxpayer's income tax liability for that taxable year, the taxpayer may carry forward any the excess for up to ten years.

    (D)    If during any taxable year the landowner voluntarily chooses to leave the agreement made concerning the certified areas during any taxable year after taking the tax credit, then the taxpayer's tax liability for the current taxable year must be increased by the full amount of any credit claimed in prior previous years with respect to the property.

    (E)(1)    An 'S' corporation, limited liability company, or partnership that qualifies for the credit under pursuant to this section as an 'S' corporation or partnership entitles may pass through the credit earned to each shareholder of the 'S' corporation, member of the limited liability company, or partner of the partnership to a nonrefundable credit against taxes. Any credit generated by an 'S' corporation must first be used against any tax liability of the 'S' corporation under Section 12-6-530. Any remaining credit passes through to the shareholders of the 'S' corporation.

        (2)    The amount of the credit allowed a shareholder, member, or partner, or owner of a limited liability company pursuant to this section is equal to the shareholder's percentage of stock ownership, the member's interest in the limited liability company, or the partner's interest in the partnership, for the taxable year, multiplied by the amount of the credit that the taxpayer would have been entitled to if it were taxed as a corporation earned by the entity. Credit earned by an 'S' corporation owing corporate level income tax must be used first at the entity level. Only the remaining credit passes through to the shareholders of the 'S' corporation.

        (3)    For purposes of this subsection, 'limited liability company' means a limited liability company taxed like a partnership."

    SECTION    10.    Section 12-10-30 of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:

    "Section 12-10-30.    As used in this chapter:

    (1)    'Council' means the Advisory Coordinating Council for Economic Development.

    (2)    'Department' means the South Carolina Department of Revenue.

    (3)    'Employee' means an employee of the qualifying business who works full time within the enterprise zone at the project.

    (4)    'Gross wages' means wages subject to withholding.

    (5)    'Job development credit' means the amount a qualifying business may claim as a credit against employee withholding pursuant to Sections 12-10-80 and 12-10-81 and a revitalization agreement.

    (6)    'New job' means a job created or reinstated as defined in Section 12-6-3360(M)(3).

    (7)    'Qualifying business' means a business that meets the requirements of Section 12-10-50 and other applicable requirements of this chapter and, where required pursuant to Section 12-10-50, enters into a revitalization agreement with the council to undertake a project pursuant to the provisions of this chapter.

    (8)    'Project' means an investment for one or more purposes pursuant to this chapter needed for a qualifying business to locate, remain, or expand in this State and otherwise fulfill the requirements of this chapter.

    (9)    'Preliminary revitalization agreement' means the application by the qualifying business for benefits pursuant to Section 12-10-80 or 12-10-81 if the council approves the application and agrees in writing at the time of approval to allow the approved application to serve as the preliminary revitalization agreement. The date of the preliminary revitalization agreement is the date of the council approval.

    (10)    'Revitalization agreement' means an executed agreement entered into between the council and a qualifying business that describes the project and the negotiated terms and conditions for a business to qualify for a job development credit pursuant to Section 12-10-80 or 12-10-81.

    (11)    'Qualifying expenditures' means those expenditures that meet the requirements of Section 12-10-80(C) or 12-10-81(D).

    (12)    'Withholding' means employee withholding pursuant to Chapter 8 of this title.

    (13)    'Technology employee' means an employee whose job qualifies for jobs tax credit pursuant to at a technology intensive facility as defined in Section 12-6-3360(M)(14) who is directly engaged in technology intensive activities at that facility.

    (14)    'Production employee' means an employee directly engaged in manufacturing or processing at a manufacturing or processing facility as defined in Section 12-6-3360(M).

    (15)    'Retraining agreement' means an agreement entered into between a business and the council in which a qualifying business is entitled to retraining credit pursuant to Section 12-10-95.

    (16)    'Retraining credit' means the amount that a business may claim as a credit against withholding pursuant to Section 12-10-95 and the retraining agreement.

    (17)    'Technology intensive activities' means the design, development, and introduction of new products or innovative manufacturing processes, or both, through the systematic application of scientific and technical knowledge at a technology intensive facility as defined in Section 12-6-3360(M)."

    SECTION    11.    Section 12-10-50 of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:

    "Section 12-10-50.    (A)    To qualify for the benefits provided in this chapter, a business must be located within this State and must:

    (1)    be engaged primarily in a business of the type identified in Section 12-6-3360;

    (2)    provide a benefits package, including health care, to full-time employees at the project;

    (3)    enter into a revitalization agreement that is approved by the council and that describes a minimum job requirement and minimum capital investment requirement for the project as provided in Section 12-10-90, except that a revitalization agreement is not required for a qualifying business with respect to Section 12-10-80(D); and

    (4)    have negotiated incentives that council has determined are appropriate for the project, and the council shall certify that:

        (a)    the total benefits of the project exceed the costs to the public; and

        (b)    the business otherwise fulfills the requirements of this chapter.

    (B)    To qualify for benefits pursuant to Section 12-10-95, a business must:

        (1)    be engaged in manufacturing or processing operations or technology intensive activities at a manufacturing, processing, or technology intensive facility as defined in Section 12-6-3360(M);

        (2)    provide a benefits package, including health care, to employees being retrained; and

        (3)    enter into a retraining agreement with the council."

    SECTION    12.    Section 12-10-80 of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:

    "Section 12-10-80.    (A)    A business that qualifies pursuant to Section 12-10-50(A) and has submitted independently audited proof to the council that the business has met the minimum job requirement and minimum capital investment provided for in the revitalization agreement may claim job development credits as determined by this section.

        (1)    A business may claim job development credits against its withholding on its quarterly state withholding tax return for the amount of job development credits allowable pursuant to this section.

        (2)    A business that is current with respect to its withholding tax and other tax due and owing the State and that has maintained its minimum employment and investment levels identified in the revitalization agreement may claim the credit on a quarterly basis beginning with the first quarter after the council's certification to the department that the minimum employment and capital investment levels were met for the entire quarter. If a qualifying business is not current as to all taxes due and owing to the State as of the date of the return on which the credit would be claimed, without regard to extensions, the business is barred from claiming the credit that would otherwise be allowed for that quarter.

        (3)    A qualifying business may receive claim its initial job development credit only after the council has certified to the department that the qualifying business has met the required minimum employment and capital investment levels.

        (4)    To be eligible to apply to the council to claim a job development credit, a qualifying business shall create at least ten new, full-time jobs, as defined in Section 12-6-3360(M), at the project described in the revitalization agreement within five years of the effective date of the agreement.

        (5)    A qualifying business is eligible to claim a job development credit pursuant to the revitalization agreement for not more than fifteen years.

        (6)    To the extent any return of an overpayment of withholding that results from claiming job development credits is not used as permitted by subsection (C) or (D) by Section 12-10-95, it must be treated as misappropriated employee withholding.

        (7)    Except as provided in subsection (D), Job development credits may not be claimed for purposes of this section with regard to an employee whose job was created in this State before the taxable year of the qualifying business in which it enters into a preliminary revitalization agreement.

        (8)    If a qualifying business claims job development credits pursuant to this section, it shall make its payroll books and records available for inspection by the council and the department at the times the council and the department request. Each qualifying business claiming job development credits pursuant to this section shall file with the council and the department the information and documentation requested by the council or department respecting employee withholding, the job development credit, and the use of any overpayment of withholding resulting from the claiming of a job development credit according to the revitalization agreement.

        (9)    Each qualifying business claiming in excess of ten thousand dollars in a calendar year must furnish an audited report prepared by an independent certified public accountant that itemizes the sources and uses of the funds. The audited report must be filed with the council and the department no later than June thirtieth following the calendar year in which the job development credits are claimed, except when a qualifying business obtains the written approval by the council for an extension of that date. Extensions may be granted only for good cause shown. The department shall impose a penalty pursuant to Section 12-54-210 for all reports filed after June thirtieth or the approved extension date, whichever is later.

        (10)    Each qualifying business claiming ten thousand dollars or less in any calendar year must furnish a report prepared by the company that itemizes the sources and uses of the funds. This report must be filed with the council and the department no later than June thirtieth following the calendar year in which the job development credits are claimed, except when a qualifying business obtains the written approval by the council for an extension of that date. Extensions may be granted only for good cause shown. The department shall impose a penalty pursuant to Section 12-54-210 for all reports filed after June thirtieth or the approved extension date, whichever is later.

        (11)    An employer may not claim an amount that results in an employee's receiving a smaller amount of wages on either a weekly or on an annual basis than the employee would receive otherwise in the absence of this chapter.

    (B)(1)    The maximum job development credit a qualifying business may claim for new employees is limited to the lesser of withholding tax paid to the State on a quarterly basis or the sum of the following amounts:

            (a)    two percent of the gross wages of each new employee who earns 6.74 dollars $6.95 or more an hour but less than 8.99 dollars $9.27 an hour;

            (b)    three percent of the gross wages of each new employee who earns 8.99 dollars 9.27 or more an hour but less than 11.23 dollars $11.58 an hour;

            (c)    four percent of the gross wages of each new employee who earns 11.23 dollars $11.58 or more an hour but less than 16.85 dollars $17.38 an hour; and

            (d)    five percent of the gross wages of each new employee who earns 16.85 dollars $17.38 or more an hour.

        (2)    The hourly gross wage figures in item (1) must be adjusted annually by an inflation factor determined by the State Budget and Control Board. The amount that may be claimed by a qualifying business is limited by subsection (C) and the revitalization agreement. The council may approve a waiver of ninety-five percent of the limits pursuant to subsection (C) for qualifying businesses making a significant capital investment as defined in Section 4-12-30(D)(4) or Section 4-29-67(D)(4).

    (C)    To claim a job development credit, the qualifying business must incur qualified expenditures at the project or for utility or transportation improvements that serve the project. To be qualified, the expenditures must be:

        (1)    incurred during the term of the revitalization agreement, including a preliminary revitalization agreement, or within sixty days before the execution of a revitalization agreement, including a preliminary revitalization agreement council's receipt of an application for benefits pursuant to this section;

        (2)    authorized by the revitalization agreement; and

        (3)    used for any of the following purposes:

            (a)    training costs and facilities;

            (b)    acquiring and improving real estate whether constructed or acquired by purchase, or in cases approved by the council, acquired by lease or otherwise;

            (c)    improvements to both public and private utility systems including water, sewer, electricity, natural gas, and telecommunications;

            (d)    fixed transportation facilities including highway, rail, water, and air;

            (e)    construction or improvements of real property and fixtures constructed or improved primarily for the purpose of complying with local, state, or federal environmental laws or regulations;

            (f)    employee relocation expenses associated with new or expanded technology intensive facilities as defined in Section 12-6-3360(M)(14);

            (g)    financing the costs of a purpose described in items (a) through (f).

    (D)(1)    The amount of job development credits a qualifying business may claim for its use for qualifying expenditures is limited according to the designation of the county as defined in Section 12-6-3360(B) as follows:

            (1)(a)    one hundred percent of the maximum job development credits may be claimed by businesses located in counties designated as 'least developed';

            (2)(b)    eighty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as 'underdeveloped';

            (3)(c)    seventy percent of the maximum job development credits may be claimed by businesses located in counties designated as 'moderately developed'; or

            (4)(d)    fifty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as 'developed'.

        (2)    The amount that may be claimed as a job development credit by a qualifying business is limited by this subsection and by the revitalization agreement. The council may approve a waiver of ninety-five percent of the limits provided in item (1) for a qualifying business making a significant capital investment as defined in Section 4-12-30(D)(4), 4-29-67(D)(4), or 12-44-30(8).

        (3)    The county designation of the county in which the project is located at the time the qualifying business enters into a preliminary revitalization agreement with the council remains in effect for the entire period of the revitalization agreement, except as to additional jobs created pursuant to an amendment to a revitalization agreement entered into before June 1, 1997, as provided in Section 12-10-60. In that case the county designation on the date of the amendment remains in effect for the remaining period of the revitalization agreement as to any additional jobs created after the effective date of the amendment. This item does not apply to a business whose application for job development fees or credits pursuant to Section 12-10-81 has been approved by council before the effective date of this act.

    (E)    The council shall certify to the department the maximum job development credit for each qualifying business. After receiving certification, the department shall remit an amount equal to the difference between the maximum job development credit and the job development credit actually claimed to the State Rural Infrastructure Fund as defined and provided in Section 12-10-85.

    (D)Subject to the conditions in this section, a qualifying business in this State may negotiate with the council to claim a job development credit for retraining according to the procedure in subsection (A) in an amount equal to five hundred dollars a year for each production and technology employee being retrained, where this retraining is necessary for the qualifying business to remain competitive or to introduce new technologies. This retraining must be approved and performed by the appropriate technical college under the jurisdiction of the State Board for Technical and Comprehensive Education. The technical college may provide the retraining program delivery directly or contract with other training entities to accomplish the required training outcomes. In addition to the yearly limits, the amount claimed as a job development credit for retraining may not exceed two thousand dollars over five years for each production employee being retrained. Additionally, the qualifying business must match on a dollar-for-dollar basis the amount claimed as a job development credit for retraining. The total amount claimed as job development credits for retraining and all of the matching funds of the qualifying business must be paid to the technical college that provides the training to defray the cost of the training program. Training cost in excess of the job development credits for retraining and matching funds is the responsibility of the qualifying business based on negotiations with the technical college.

    (E)(F)    Any job development credit of a qualifying business permanently lapses upon expiration or termination of the revitalization agreement. If an employee is terminated, the qualifying business immediately must cease to claim job development credits as to that employee.

    (F)    The statute of limitations provided by Section 12-54-85 is suspended until the end of the five-year period described in item (4) of subsection (A) with respect to state withholding taxes pursuant to this section for a business subject to this section.

    (G)    For purposes of the job development credit allowed by this section, an employee is a person whose job was created in this State.

    (H)    Job development credits may not be claimed by a governmental employer who employs persons at a closed or realigned military installation as defined in Section 12-10-88(E)."

    SECTION    13.    Section 12-10-81 of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:

    "Section 12-10-81.    (A)    A business may claim a job development credit as determined by this section if the:

        (1)    council approves the use of this section for the business;

        (2)    business qualifies pursuant to Section 12-10-50; and

        (3)    business is a tire manufacturer that has more than four hundred twenty-five million dollars in capital invested in this State and employs more than one thousand employees in this State and that commits within a period of five years from the date of a revitalization agreement, to invest an additional three hundred fifty million dollars and create an additional three hundred fifty jobs in this State qualifying for job development fees or credits pursuant to current or future revitalization agreements; except that the business must submit independently audited proof to the council that the business has satisfied all minimum capital investment and job requirements identified in the revitalization agreements but not certified by the council to the department before July 1, 2001. The council, in its discretion, may extend the five-year period for two additional years if the business has made a commitment to the additional three hundred fifty million dollars and makes substantial progress toward satisfying the goal before the end of the initial five-year period. A business that represents to the council its intent to qualify pursuant to this section and is approved by the council may put job development fees computed pursuant to this section into an escrow account until the date the business satisfies provides independently audited proof to the council that the business has satisfied the capital and job requirements of this section.

    (B)(1)    A business qualifying pursuant to this section may claim its job development credit against its withholding on its quarterly state withholding tax return for the amount of job development credit allowable pursuant to this section for not more than fifteen years. Job development credits allowed pursuant to subsection (C)(1)(a) through (d) of this section apply only to withholding on jobs created pursuant to a revitalization agreement adopted pursuant to this section and to the amounts withheld on wages and salaries on those jobs.

        (2)    A business that is current with respect to its withholding tax as well as any other tax due and owing the State and that has maintained its minimum employment and investment levels identified in the revitalization agreement may claim the credit on a quarterly basis beginning with the quarter subsequent to the council's certification to the department that the minimum employment and capital investment levels have been met for the entire quarter. If a qualifying business is not current as to all taxes due and owing to the State as of the date of the return on which the credit would be claimed, without regard to extensions, the business is barred from claiming the credit that would otherwise be allowed for that quarter.

        (3)    To be eligible to apply to the council to claim a job development credit pursuant to this section, a qualifying business must create at least ten new, full-time jobs as defined in Section 12-6-3360(M) at the project or projects described in the revitalization agreement.

        (4)    To the extent a return of an overpayment of withholding that results from claiming job development credits is not used as permitted by subsection (D), it must be treated as misappropriated employee withholding.

        (5)    Job development credits may not be claimed for purposes of this section with regard to an employee whose job was created in this State before the taxable year the qualifying business enters into a preliminary revitalization agreement.

        (6)    If a qualifying business claims job development credits pursuant to this section, it must make its payroll books and records available for inspection by the council and the department at the times the council and the department request. Each qualifying business claiming job development credits pursuant to this section must file with the council and the department the information and documentation they request respecting employee withholding, the job development credit, and the use of overpayment of withholding resulting from the claiming of a job development credit according to the revitalization agreement.

        (7)    Each qualifying business must furnish an audited report prepared by an independent certified public accountant that itemizes the sources and uses of the funds. The audited report must be filed with the council and the department no later than June thirtieth following the calendar year in which the job development credits are claimed, except when a qualifying business obtains written approval of council for an extension of that date. Extensions may be granted for good cause shown. The department shall impose a penalty pursuant to Section 12-54-210 for all reports filed after June thirtieth or the approved extension date, whichever is later.

        (8)    An employer may not claim an amount that results in an employee's receiving a smaller amount of wages on either a weekly or on an annual basis than the employee would otherwise receive in the absence of this chapter.

    (C)(1)    The maximum job development credit a qualifying business may claim for new employees is determined by the sum of the following amounts:

            (a)    two percent of the gross wages of each new employee who earns $6.74 $6.95 or more an hour but less than $8.99 $9.27 an hour;

            (b)    three percent of the gross wages of each new employee who earns $8.99 $9.27 or more an hour but less than $11.23 $11.58 an hour;

            (c)    four percent of the gross wages of each new employee who earns $11.23 $11.58 or more an hour but less than $16.85 $17.38 an hour;

            (d)    five percent of the gross wages of each new employee who earns $16.85 $17.38 or more an hour; and

            (e)    the increase in the state sales and use tax of the business from the year of the effective date of its revitalization agreement pursuant to this section and subsequent years, over its state sales and use tax for the first of the three years preceding the effective date of this revitalization agreement.

        (2)    The hourly base wages in item (1) must be adjusted annually by the inflation factor determined by the State Budget and Control Board. The amount that may be claimed by a qualifying business is limited by subsection (E) and the negotiated terms of the revitalization agreement. The business may proceed by using either the job development fee escrow procedure available pursuant to revitalization agreements with effective dates before 1997, or the job development credit, or a combination of the two. For a business qualifying pursuant to this section, the council also may approve or waive sections of a revitalization agreement and the council's rules as needed, in the council's discretion, to assist the business.

    (D)    To claim a job development credit, the qualifying business must incur expenditures at the project or for utility or transportation improvements that serve the project. To be qualified, the expenditures must be:

        (1)    incurred during the term of the revitalization agreement, including a preliminary revitalization agreement, or within sixty days before council's receipt of an application for benefits pursuant to this section;

        (2)    authorized by the revitalization agreement; and

        (3)    used to reimburse the business for:

            (a)    training costs and facilities;

            (b)    acquiring and improving real estate whether constructed or acquired by purchase, or in cases approved by the council, acquired by lease or otherwise;

            (c)    improvements to both public and private utility systems including water, sewer, electricity, natural gas, and telecommunication;

            (d)    fixed transportation facilities including highway, rail, water, and air; or

            (e)    construction or improvements of real property and fixtures constructed or improved primarily for the purpose of complying with local, state, or federal environmental laws or regulations.

    (E)(1)    For purposes of subsection (C)(1)(a) through (d), the amount of job development credits a qualifying business may claim for its use for qualifying expenditures is limited according to the designation of the county as defined in Section 12-6-3360(B) as follows:

            (a)    one hundred percent of the maximum job development credits may be claimed by businesses located in counties designated as 'least developed';

            (b)    eighty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as 'underdeveloped';

            (c)    seventy percent of the maximum job development credits may be claimed by businesses located in counties designated as 'moderately developed'; or

            (d)    fifty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as 'developed'.

        (2)    For purposes of this subsection, the county designation of the county in which the project is located at the time the qualifying business enters into a preliminary revitalization agreement with the council remains in effect for the entire period of the revitalization agreement.

        (3)    The amount claimed by a qualifying business is limited by this subsection and the terms of the revitalization agreements. The business may use either the job development escrow procedure pursuant to revitalization agreements with effective dates before 1997 or the job development credit, or a combination of the two. For a business qualifying pursuant to this section, the council also may approve or waive sections of a revitalization agreement and rules of the council, in the council's discretion, to assist the business.

        (4)    The council shall certify to the department the maximum job development credit for each qualifying business. After receiving certification, the department shall remit an amount equal to the difference between the maximum job development credit and the job development credit actually claimed to the State Rural Infrastructure Fund as defined and provided in Section 12-10-85.

    (F)    A job development credit of a qualifying business permanently lapses upon expiration or termination of the revitalization agreement. If an employee is terminated, the qualifying business immediately must cease to claim job development credits as to that employee.

    (G)    The statute of limitations provided by Section 12-54-85 is suspended until the end of the five-year or seven-year period described in item (3) of subsection (A) with respect to state withholding taxes pursuant to this section for a business subject to this section.

    (H)    For purposes of the job development credit allowed by this section, an employee is a person whose job was created in this State."

    SECTION    14.    Section 12-13-20 of the 1976 Code is amended to read:

    "Section 12-13-20.    The term 'net income', as used in this chapter, means taxable income as determined for a regular corporation in Chapter 7 6 of this title after deducting all earnings accrued, paid, credited, or set aside for the benefit of holders of savings or investment accounts, any additions to reserves which are required by law, regulation, or direction of appropriate supervisory agencies, and a bad debt deduction. The bad debt deduction allowable for South Carolina income tax purposes is the amount determined under the Internal Revenue Code and the applicable regulations as amended through December 31, 1986 as defined in Section 12-6-40. No deductions from income are allowed for any additions to undivided profits or surplus accounts other than herein required, and for the purposes of this chapter, a state-organized association is allowed the same deductions for bad debt reserves as those allowed to federally organized associations. Associations shall maintain the bad debt reserves allowed as a deduction pursuant to this section in accordance with the provisions of the Internal Revenue Code as amended through December 31, 1986, as defined in Section 12-6-40 and shall keep a permanent record. These provisions are controlling notwithstanding any other provision of law."

    SECTION    15.    Section 12-13-60 of the 1976 Code is amended to read:

    "Section 12-13-60.    For the purpose of administration, enforcement, collection, liens, penalties, and other similar provisions, all of the provisions of Chapter 7 6 of this title that may be are appropriate or applicable are adopted and made a part of this chapter, including the requirement to make declarations requirements of declaration and payment of estimated tax and make estimated tax payments."

    SECTION    16.    Section 12-20-90 of the 1976 Code is amended to read:

    "Section 12-20-90.    The amount of the license fee required by Section 12-20-50 for a bank holding company, insurance holding company system, and savings and loan holding company must be measured by the capital stock and paid-in surplus of the holding company exclusive of the capital stock and paid-in surplus of a bank, insurer, or savings and loan association that is a subsidiary of the holding company. For the purposes of this section, 'bank', 'bank holding company', and 'subsidiary' of a bank holding company have the same definitions as in Section 34-24-20; 'insurer', 'insurance holding company system', and a 'subsidiary' of an insurance holding company system have the same definitions as in Section 38-21-10; and savings and loan 'association', 'savings and loan holding company', and a 'subsidiary' of a savings and loan company have the same definitions as in Section 34-28-300."

    SECTION    17.    Section 12-20-110 of the 1976 Code is amended to read:

    "Section 12-20-110.    The provisions of this chapter do not apply to any:

    (1)    nonprofit corporation organized under Article 1 of pursuant to Chapter 31 or 33 of Title 33 and exempt from income taxes pursuant to Section 501 of the Internal Revenue Code of 1986;

    (2)    volunteer fire department and rescue squad;

    (3)    cooperative organized under Chapter 45 or 47 of pursuant to Title 33;

    (4)    bank, building and loan association, or credit union doing a strictly mutual business;

    (5)    insurance company or association including any a fraternal, beneficial, or mutual protection insurance company; or

    (6)    foreign corporation whose entire income is not included in excluded from gross income for federal income tax purposes due to any a treaty obligation of the United States; or

    (7)    homeowners' association within the meaning of Internal Revenue Code Section 528(c)(1)."

    SECTION    18.    Section 12-28-1135(A) of the 1976 Code is amended to read:

    "(A)    Each person who engages in the business of selling taxable motor fuel at wholesale or retail or storing or distributing purchases taxable motor fuel for resale within this State from a licensed terminal supplier first shall obtain a fuel vendor license which is operative for all locations controlled or operated by that licensee in this State or in any other state from which the person removes fuel for delivery and use in South Carolina."

    SECTION    19.    A.    Section 12-28-1730(E) of the 1976 Code is amended to read:

    "(E)    The department may impose a civil penalty against every terminal operator who wilfully fails to meet shipping paper issuance requirements under Sections 12-28-920, 12-28-1500, and 12-28-1575 or files a return without the supporting schedules as required by the department pursuant to Sections 12-28-1330 and 12-28-1340. The civil penalty imposed on the terminal operator is the same as the civil penalty imposed under subsection (B)."

    B.    Section 12-28-1730 of the 1976 Code is amended by adding:

    "(H)    If a person liable for the tax files a return without providing all information required by the department, there is added to the tax the amount provided in Section 12-54-43(C)(1)."

    SECTION    20.    Section 12-36-90(2)(h) of the 1976 Code is amended to read:

    "(h)    the sales price, not including sales tax, of property on sales which are actually charged off as bad debts or uncollectible accounts for state income tax purposes. A taxpayer who pays the tax on the unpaid balance of an account which has been found to be worthless and is actually charged off for state income tax purposes may take credit for the tax paid a deduction for the sales price charged off as a bad debt or uncollectible account on a return filed pursuant to this chapter, except that if an amount charged off is later paid in whole or in part to the taxpayer, the amount paid must be included in the first return filed after the collection and the tax paid. The deduction allowed by this provision must be taken within one year of the month the amount was determined to be a bad debt or uncollectible account."

    SECTION    21.    Section 12-36-130 of the 1976 Code, as last amended by Section 2, Act 283 of 2000, is further amended by adding a paragraph at the end to read:

    "The term 'sales price' as defined in this section, also does not include the sales price, not including tax, of property on sales which are actually charged off as bad debts or uncollectible accounts for state income tax purposes. A taxpayer who pays the tax on the unpaid balance of an account which has been found to be worthless and is actually charged off for state income tax purposes may take a deduction for the sales price charged of as a bad debt or uncollectible account on a return filed pursuant to this chapter, except that if an amount charged off is later paid in whole or in part to the taxpayer, the amount paid must be included in the first return filed after the collection and the tax paid. The deduction allowed by this paragraph must be taken within one year of the month the amount was determined to be a bad debt or uncollectible account."

    SECTION    22.    Section 12-36-910(B)(3) of the 1976 Code is amended to read:

    "(3)    gross proceeds accruing or proceeding from the charges for the ways or means for the transmission of the voice or messages, including the charges for use of equipment furnished by the seller or supplier of the ways or means for the transmission of the voice or messages. Charges for mobile telecommunications services subject to the tax under this item must be sourced in accordance with the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code. The term 'charges for mobile telecommunications services' is defined for purposes of this section the same as it is defined in the Mobile Telecommunications Sourcing Act. All other definitions and provisions of the Mobile Telecommunications Sourcing Act as provided in the Title 4 of the United States Code are adopted;"

    SECTION    23.    Section 12-36-910(B) of the 1976 Code is amended by adding:

    "(5)    gross proceeds accruing or proceeding from the sale or recharge at retail or prepaid wireless calling arrangements.

        (a)    'Prepaid wireless calling arrangements' means communication services that:

            ( i)    are used exclusively to purchase wireless telecommunications;

            ( ii)    are purchased in advance;

            (iii)    allow the purchaser to originate telephone calls by using an access number, authorization code, or other means entered manually or electronically; and

            ( iv)    are sold in units or dollars which decline with use in a known amount.

        (b)    All charges for prepaid wireless calling arrangements must be sourced to the:

            ( i)    location in this State where the over-the-counter sale took place;

            ( ii)    shipping address if the sale did not take place at the seller's location and an item is shipped; or

            (iii)    either the billing address or location associated with the mobile telephone number if the sale did not take place at the seller's location and no item is shipped."

    SECTION    24.    Section 12-36-940 of the 1976 Code is amended to read:

    "Section 12-36-940.    (A)    Every Each retailer may add to the sales price as a result of the five percent state sales tax:

        (1)    no amount on sales of ten cents or less;

        (2)    one cent on sales of eleven cents and over, but not in excess of through twenty cents;

        (3)    two cents on sales of twenty-one cents and over, but not in excess of through forty cents;

        (4)    three cents on sales of forty-one cents and over, but not in excess of through sixty cents;

        (5)    four cents on sales of sixty-one cents and over, but not in excess of through eighty cents;

        (6)    five cents on sales of eighty-one cents and over, but not in excess of through one dollar;

        (7)    one cent additional for each twenty cents or major fraction thereon in excess of it over of one dollar.

    (B)    The inability, impracticability, refusal, or failure to add these amounts to the sales price and collect them from the purchaser does not relieve the taxpayer from the tax levied by this article.

    (C)    For purposes of the state sales tax on accommodations and applicable combined state sales and local tax for counties imposing a local sales tax collected by the department on their behalf, retailers may add to the sales price an amount equal to the total state and local sales tax rate times the sales price. The amount added to the sales price may not be less than the amount added pursuant to subsection (A). In calculating the tax due, retailers may round a fraction of more than one-half of a cent to the next whole cent and a fraction of a cent of one-half or less must be eliminated. The inability, impracticability, refusal, or failure to add the tax to the sales price as allowed by this subsection and collect them from the purchaser does not relieve the taxpayer of his responsibility to pay tax."

    SECTION    25.    Section 12-36-1310(B)(3) of the 1976 Code is amended to read:

        "(3)    gross proceeds accruing or proceeding from the charges for the ways or means for the transmission of the voice or messages, including the charges for use of equipment furnished by the seller or supplier of the ways or means for the transmission of the voice or messages. Charges for mobile telecommunications services subject to the tax under this item must be sourced in accordance with the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code. The term 'charges for mobile telecommunications services' is defined for purposes of this section the same as it is defined in the Mobile Telecommunications Sourcing Act. All other definitions and provisions of the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code are adopted;"

    SECTION    26.    Section 12-37-220(C) of the 1976 Code is amended to read:

    "(C)    Upon approval by the governing body of the county, the five-year partial exemption allowed pursuant to subsections (A)(7), and (B)(32), and (B)(34) is extended to an unrelated purchaser who acquires the facilities in an arms-length transaction and who preserves the existing facilities and existing number of jobs. The partial exemption applies for the purchaser for five years if the purchaser otherwise meets the exemption requirements."

    SECTION    27.    Section 12-54-43 of the 1976 Code, as last amended by Act 399 of 2000, is further amended by adding an appropriately lettered subsection to read:

    "( )    A failure to deposit or pay taxes deducted and withheld pursuant to Article 5 of Chapter 8 subjects the withholding agent to a penalty of not less than ten dollars nor more than one thousand dollars. The penalty imposed by this item applies to failure to comply with the provisions of Section 12-54-250."

    SECTION    28.    Section 12-54-44(C) of the 1976 Code is amended to read:

    "(C)    A failure to deposit or pay taxes deducted and withheld pursuant to Article 5 of Chapter 8 subjects the withholding agent to a penalty of not less than ten dollars nor more than one thousand dollars. The penalty imposed by this item applies to failure to comply with the provisions of Section 12-54-250. Reserved    "

    SECTION    29.    Chapter 54, Title 12 of the 1976 Code is amended by adding:

    "Section 12-54-195.    (A)    As used in this section, 'responsible person' includes any officer, partner, or employee of the taxpayer who has a duty to pay to the department the sales tax due by the taxpayer or use tax required or authorized to be collected by the retailer pursuant to Chapter 36 of this title.

    (B)    If a retailer adds and collects the sales tax as permitted by Section 12-36-940, or collects the use tax from the purchaser as required by Section 12-36-1350, but the retailer fails to remit the tax collected to the department, then any responsible person may be held liable, individually and personally, for a penalty equal to one hundred percent of the tax collected but not remitted to the department. The tax is not collectible from the retailer to the extent the penalty imposed by this subsection is collected from a responsible person."

    SECTION    30.    Section 12-54-85 of the 1976 Code, as last amended by Act 399 of 2000, is further amended by adding an appropriately numbered subsection at the end to read:

    "( )(1)    An individual taxpayer is 'financially disabled' if he is unable to manage his financial affairs by reason of a medically determinable physical or mental impairment that is expected to result in death or that has lasted or is expected to last for a continuous period of not less than twelve months. An individual taxpayer does not have that impairment for this purpose unless proof of the existence of the impairment is provided to the department in the form and manner the department requests.

        (2)    The running of the period of limitation provided in subsection (F) is suspended during a period an individual taxpayer is considered financially disabled.

        (3)    An individual taxpayer may not be treated as financially disabled during a period that his spouse or another person is authorized lawfully to act on his behalf in financial matters."

    SECTION    31.    Section 12-54-85(F) of the 1976 Code is amended to read:

    "(F)(1) Except as provided in subsection (D) above, claims for credit or refund must be filed within three years of from the time the timely filed return, including extensions, was filed, or two years from the date of payment the tax was paid, whichever is later. If no return was filed, a claim for credit or refund must be filed within two years from the date of payment the tax was paid. A credit or refund may not be made after the expiration of the period of limitation prescribed in this item for the filing of a claim for credit or refund, unless the claim for credit or refund is filed by the taxpayer or determined to be due by the department within that period.

        (2)    If the claim was filed by the taxpayer during the three-year period prescribed in item (1), the amount of the credit or refund may not exceed the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to three years plus the period of any extension of time for filing the return.

        (3)    If the claim was not filed within the three-year period, the amount of the credit or refund may not exceed the portion of the tax paid during the two years immediately preceding the filing of the claim.

        (4)    If no claim was filed, the credit or refund may not exceed the amount which would be allowable under item (2) or (3), as the case may be, as if a claim were filed on the date the credit or refund is allowed.

        (5)    For the purposes of this subsection:

            (a)    A return filed before the last day prescribed for the filing is considered as filed on the last day. Payment of any portion of the tax made before the last day prescribed for the payment of the tax is considered made on the last day. The last day prescribed for filing the return or paying the tax must be determined without regard to any extension of time.

            (b)    Any tax actually withheld at the source in respect of the recipient of income, is considered to have been paid by the recipient on the last day prescribed for filing his return for the taxable year, determined without regard to any extension of time for filing the return, with respect to which the taxpayer would be allowed a credit for the amount withheld.

            (c)    Any amount paid as estimated income tax for any taxable year is considered to have been paid on the last day prescribed for filing the return for the taxable year, determined without regard to any extension of time for filing the return.

        (6)    In the case of an individual, the running of the period specified in this subsection is suspended for a period of the individual's life during which he is financially disabled. For purposes of this item, an individual is financially disabled if he is unable to manage his financial affairs by reason of a medically determinable physical or mental impairment that is not expected to result in death or which has lasted or is expected to last for a continuous period of not less than twelve months. An individual must not be treated as financially disabled for a period during which his spouse or another person is authorized to act on his behalf in financial matters. An individual must not be considered financially disabled unless the following statements are submitted as part of the claim for credit or refund:

            (a)    a written statement signed by a physician qualified to make the determination that provides the:

                ( i)    name and a brief description of the physical or mental IMPAIRMENT;

                ( ii)    physician's medical opinion that the physical or mental IMPAIRMENT prevented the taxpayer from managing his financial affairs;

                (iii)    physician's medical opinion that the taxpayer's physical or mental impairment resulted in, or is expected to result in, death, or that it has lasted, or is expected to last, for a continuous period of not less than twelve months; and

                ( iv)    specific time period during which the taxpayer was prevented by the physical or mental impairment from managing his financial affairs, to the vest of the physician's knowledge; and

            (b)    a written statement by the taxpayer or the person signing the claim for credit or refund that the person, including the taxpayer's spouse, was not authorized to act on his behalf in financial matters for the period during which he was unable to manage his own financial affairs. Alternatively, if a person was authorized to act on the taxpayer's behalf in financial matters during part of that period of disability, the statement must contain the beginning and ending dates of the period of time the person was authorized; and

            (c)    other information the department may require.

    The department, in its discretion, may adopt a determination made by the Internal Revenue Service with respect to an individual, and may follow rules issued by the Internal Revenue Service or Department of Treasury with regard to interpreting Internal Revenue Code section 6511(h)."

    SECTION    32.    Section 12-54-200 of the 1976 Code is amended to read:

    "Section 12-54-200.    (a)(A)    The department, at its discretion, after notification as provided in subsection (b) of this section, may require any a person subject to provisions of law administered by the department, not including Section 12-35-330, to post a cash or surety bond, deposit and maintain taxes due including associated penalties and interest in a separate account in a bank or other financial institution in this State, or both, if the person fails to file a timely return or pay any a tax for as many as two tax filing periods in a twelve-month period.

    (B)    The amount of the bond must be determined by the department and may not be greater than three times the estimated average liability each filing period of the person required to file the return. A cash bond must be held by the State Treasurer, without interest, as surety conditioned upon prompt payment of all taxes, penalties, and interest imposed by law upon the person.

    (C)    If a person is required to maintain a separate account, he must give the name of the financial institution, the account number, and other information the department requires. Taxes, penalties, and interest due must be withdrawn from the account by preprinted, consecutively numbered checks signed by a properly authorized officer, partner, manager, employee, or member of the taxpayer and made payable to the department. Monies deposited in the account may not be commingled with other funds. The department, at its discretion, may apply Section 12-54-250, if the amount due from the taxpayer is twenty thousand dollars or more.

    (D)    When any a person required to post a bond or maintain a separate account, or both, complies with all requirements of law and regulations for a period of twenty-four consecutive months, the department shall return the bond and cancel the bonding and separate account requirements.

    (b)(E)    The department shall may serve the notice required by subsection (b) of this section by certified mail, or by delivery by an authorized agent of the department delivering the notice to the person in hand or by leaving the notice at the person's last or usual place of abode or at his place of business or employment. For corporations, partnerships, or trusts, the notice may be delivered by certified mail, or by delivery by an authorized agent for of the department delivering the notice to an officer, partner, or trustee in hand, or by leaving the notice at the officer's, partner's, or trustee's last or usual place of abode or at his place of business or employment.

    (F)    A person who fails to comply with this section is guilty of a misdemeanor and, upon conviction, must be fined not more than five hundred dollars or imprisoned not more than thirty days, or both. Offenses under this section are triable in magistrate's court. These penalties are in addition to other penalties provided by law."

    SECTION    33.    Section 12-54-227(A)(2) of the 1976 Code is amended to read:

    "(2)    For purposes of this section, 'delinquent tax claim' means a tax liability that is due and owing for a period longer than six months and for which the taxpayer has been given at least three notices requesting payment and for any subsequent tax debts issued, one notice of which has been sent by certified or registered mail. The notice sent by certified or registered mail must include includes a statement that the taxpayer's delinquency may be referred to a collection agency in the taxpayer's home state."

    SECTION    34.    Section 12-54-240(B)(6) of the 1976 Code is amended to read:

    "(6)    disclosure of a deficiency assessment to a probate court or to an attorney conducting a closing, the filing of a tax lien for uncollected taxes, and the issuance of a notice of levy;"

    SECTION    35.    Section 12-56-120 of the 1976 Code is amended to read:

    "Section 12-56-120.    The department is and Internal Revenue Service are exempt from the notice and appeal procedures of this chapter. The sole and exclusive appeal procedures procedure for the setoff of any a debt owed to the department is governed by the provisions of Chapter 60 of Title 12 which provides the sole and exclusive remedy for these procedures. The appeal procedure in connection with a liability to the Internal Revenue Service is governed by Title 26 of the United States Code."

    SECTION    36.    Section 12-58-185(A) of the 1976 Code is amended to read:

    "(A)    The department, in its discretion, may accept installment payment for amounts due for a period not to exceed one year from the date the payment was due originally. Interest accrues during the installment period, pursuant to Section 12-54-25. In addition, the department may extend the time for payment of an amount due it for a period not to exceed eighteen months from the date fixed for the payment and, in exceptional cases, for a further period not to exceed twelve months. An extension under pursuant to this section may be granted only where if it is shown to the satisfaction of the department that the payment of the amount due it upon the date originally fixed for the payment will result in undue hardship to the taxpayer."

    SECTION    37.    Section 12-60-90(C) of the 1976 Code is amended to read:

    "(C)    Taxpayers may be represented during the administrative tax process by:

        (1)    the same individuals who can may represent them in administrative tax proceedings with the Internal Revenue Service pursuant to Section 10.3 (a), (b), and (c), Section 10.7 (a), (1) (c)(i) through (4) and (7) (c)(vi), and (c)(viii), and Section 10.7 (b) (d) and (c) (e) of United States Treasury Department Circular No. 230; and

        (2)    a real estate appraiser who is registered, licensed, or certified pursuant to Chapter 60 of Title 40 during the administrative tax process in a matter limited to questions concerning the valuation of real property."

    SECTION    38.    Section 4-37-30(A)(15) of the 1976 Code, as amended by Act 368 of 2000, is further amended to read:

    "(15)    The revenues of the tax collected in each county pursuant to this section must be remitted to the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of refunds made and costs to the Department of Revenue of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues and all interest earned on the revenues while on deposit with him quarterly to the county in which the tax is imposed and these revenues and interest earnings must be used only for the purpose stated in the imposition ordinance. The State Treasurer may correct misallocation misallocations costs or refunds by adjusting later distributions, but these adjustments must be made in the same fiscal year as the misallocation misallocations. However, allocations made as a result of city or county code errors must be corrected prospectively."

    SECTION    39.    A.    Section 6(A) of Act 588 of 1994 is amended to read:

    "(A)    The revenues of the tax collected in the county under this act must be remitted to the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of refunds made and costs to the Department of Revenue and Taxation of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer who holds the debt service funds established for payment of principal and interest on the bonds to which the tax is applicable. The State Treasurer may correct misallocation misallocations costs or refunds by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocation. However, allocations made as a result of city or county code errors must be corrected prospectively."

    B.    Section 6 of Act 588 of 1994, as last amended by Act 458 of 1998, is further amended by adding at the end:

    "(D)    Annually, in the month of June, funds collected by the Department of Revenue from the Cherokee County School District 1 School Bond-Property Tax Relief Act which are not identified as to the governmental unit due the tax after reasonable effort by the department to determine the source of collection must be transferred to the State Treasurer's Office. The State Treasurer shall distribute these funds to the county treasurer in the county area in which the tax is imposed and the revenues must be used only for the purposes stated in the imposition resolution. The State Treasurer shall calculate this supplemental distribution on a proportional basis based on the current fiscal year's county area revenue collections."

    SECTION    40.    A.    Section 7A of Act 441 of 2000 is amended to read:

    "(A)    The revenues of the tax collected in the county under this act must be remitted to the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of refunds made and costs to the department of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer, who shall hold the debt service funds for payment of principal and interest on the bonds to which the tax is applicable. The State Treasurer may correct misallocation costs or refunds misallocations by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocation. However, allocations made as a result of city or county code errors must be corrected prospectively."

    B.    Section 7 of Act 441 of 2000 is amended by adding at the end:

    "(D)    Annually, in the month of June, funds collected by the Department of Revenue from the Chesterfield County School District School Bond-Property Tax Relief Act which are not identified as to the governmental unit due the tax after reasonable effort by the department to determine the source of collection must be transferred to the State Treasurer's Office. The State Treasurer shall distribute these funds to the county treasurer in the county area in which the tax is imposed and the revenues must be used only for the purposes stated in the imposition resolution. The State Treasurer shall calculate this supplemental distribution on a proportional basis based on the current fiscal year's county area revenue collections."

    SECTION    41.    Section 12-4-580(D)(1) is amended to read:

    "(1)    'governmental entity' means the State and any state agency, board, committee, department, department, private or public institution of higher learning; all political subdivisions of the State; and all federal agencies, boards, and departments. 'Political subdivision' includes the Municipal Association of South Carolina and the South Carolina Association of Counties when these organizations submit claims on behalf of their members."

    SECTION    42.    Section 12-6-3360(B)(5) of the 1976 Code is amended by adding a lettered subitem to read:

    "(e)    For a job created in a county that is not traversed by an interstate highway, the credit allowed is one tier higher than the credit for which jobs created in the county would otherwise qualify. This subitem does not apply to a job created in a county eligible for a higher tier pursuant to another provision of this item."

    SECTION 43.    Section 12-56-20(4) of the 1976 Code, is amended by adding at the end:

    "'Delinquent debt' also includes any fine, penalty, cost, fee, assessment, surcharge, service charge, restitution, or other amount imposed by a court or as a direct consequence of a final court order which is received by or payable to the clerk of the appropriate court or treasurer of the entity where the court is located."

    SECTION 44.    Chapter 56, Title 12 of the 1976 Code is amended by adding:

    "Section 12-56-68.    Debts imposed by a court or as a direct consequence of a final court order are not subject to the procedures in Sections 12-56-63 and 12-56-65."

    SECTION 45.    Chapter 43, Title 12, of the 1976 Code is amended by adding:

    "Section 12-43-285.    (A)    The governing body of a political subdivision levying a property tax billed by the county auditor must certify in writing to the county auditor that the millage rate levied is in compliance with laws limiting the millage rate imposed by that political subdivision.

    (B)    If a millage rate is in excess of that authorized by law, the county treasurer must either issue refunds or transfer the total amount in excess of that authorized by law, upon collection, to a separate, segregated fund, which must be credited to taxpayers in the following year. An entity submitting a millage rate in excess of that authorized by law must pay the costs of implementing this subsection or a pro rata share of the costs if more than one entity submits the excessive millage rate."

    SECTION 46.    Section 4-1-170 of the 1976 Code is amended to read:

    "Section 4-1-170.    (A)    By written agreement, counties may develop jointly an industrial or business park with other counties within the geographical boundaries of one or more of the member counties as provided in Section 13 of Article VIII of the Constitution of this State. The written agreement entered into by the participating counties must include provisions which:

        (1)    address sharing expenses of the park;

        (2)    specify by percentage the revenue to be allocated to each county;

        (3)    specify the manner in which revenue must be distributed to each of the taxing entities within each of the participating counties.

    (B)    For the purpose of bonded indebtedness limitation and for the purpose of computing the index of taxpaying ability pursuant to Section 59-20-20(3), allocation of the assessed value of property within the park to the participating counties and to each of the taxing entities within the participating counties must be identical to the allocation of revenue received and retained by each of the counties and by each of the taxing entities within the participating counties. Misallocations may be corrected by adjusting later distributions, but these adjustments must be made in the same fiscal year as the misallocations. Provided, however, that the computation of bonded indebtedness limitation is subject to the requirements of Section 4-29-68(E).

    (C)    If the industrial or business park encompasses all or a portion of a municipality, the counties must obtain the consent of the municipality prior to the creation of the multi-county industrial park."

    SECTION 47.    Section 12-44-80 of the 1976 Code is amended by adding:

    "(C)    Misallocations of the distribution of the fee payments on the project pursuant to this chapter may be corrected by adjusting later distributions, but these adjustments must be made in the same fiscal year as the misallocations."

    SECTION 48.    Section 4-12-30(K) of the 1976 Code is amended by adding:

    "(4)    Misallocations of the distribution of the fee-in-lieu of taxes on the project to this chapter may be corrected by adjusting later distributions, but these adjustments must be made in the same fiscal year as the misallocations."

    SECTION 49.    Section 12-39-250(B) of the 1976 Code is amended to read:

    "(B)    Notwithstanding any other provision of law, the county tax assessor or the County Board of Assessment Appeals, upon application of the taxpayer, must order the county auditor to make appropriate adjustments in the valuation and assessment of any owner-occupied real property and improvements which have sustained damage as a result of fire provided that the application for correction of the assessment is made prior to before payment of the tax."

    SECTION    50.    Section 12-51-90(B) of the 1976 Code, as last amended by Act 334 of 2000, is further amended to read:

    "(B)    The lump sum amount of interest is due on the whole amount of the delinquent tax sale based on the month during the redemption period the property is redeemed and that rate relates back to the beginning of the redemption period according to the following schedule:

    Month of Redemption Period    Amount of Interest Imposed

    Property Redeemed

    First three months                three percent of the bid amount

    Months four, five, and six        six percent of the bid amount

    Months seven, eight, and nine    nine percent of the bid amount

    Last three months                twelve percent of the bid

                                        amount

    However, in every redemption, the amount of interest due must not exceed the amount of the bid on the property submitted on behalf of the forfeited land commission pursuant to Section 12-51-55."

    SECTION    51.    A.    Chapter 45 of Title 12 of the 1976 Code is amended by adding:

    "Section 12-45-65.    For purposes of collection of taxes on a hotel, rooming house, apartment, or timeshare unit rented or leased as a furnished unit, the estate includes both the real estate and the personal property it contains. The real property tax notice on the estate must describe the real estate, including a tax map number, and also include an identifiable description and value of the personal property it contains."

    B.    Section 12-49-40 of the 1976 Code is amended to read:

    "Section 12-49-40.    (A)    All personal property subject to taxation shall be is liable to distress and sale for the payment of taxes, in the manner provided in this title, and all real property returned delinquent by the county treasurer upon which the taxes shall are not be paid by distress or otherwise shall must be seized and sold as provided in this title. The distress and sale of personal property shall is not be a condition precedent to seizure and sale of any real property under this title.

    (B)    For purposes of collection and enforcement of taxes on a hotel, rooming house, apartment, or timeshare unit rented or leased as a furnished unit, the estate includes both the real estate and the personal property it contains. The estate must be seized and sold as undivided real property as provided in this title for the sale to collect delinquent taxes on real property."

    C.    Section 12-51-50 of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:

    "Section 12-51-50.    The property duly advertised must be sold, by the person officially charged with the collection of delinquent taxes, at public auction at the courthouse or other convenient place within the county, if designated and advertised, on a legal sales date during regular hours for legal tender payable in full by cash, cashier's check, certified check, or money order on the date of the sale. If the defaulting taxpayer or the grantee of record of the property has more than one item advertised to be sold, as soon as sufficient funds have been accrued to cover all of the delinquent taxes, assessments, penalties, and costs, further items may not be sold; except that hotel, rooming house, apartment, or timeshare unit rented or lease as a furnished unit is deemed to be both the real estate and the personal property it contains. It must be sold as undivided real property."

    D.    Chapter 37, Title 12 of the 1976 Code is amended by adding:

    "Section 12-37-805.    As an alternative to the procedures described in Section 12-37-760, if the owner of a hotel, rooming house, apartment, or timeshare unit rented or leased as a furnished unit fails to list, in any one year, personal property required by law to be listed, the auditor may return a statement of the personal property with the value being that of twice the average value of the reported personal property contained within similar units in the county."

    SECTION    52.    The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.

    SECTION    53.    If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed these sections, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

    SECTION    54.    SECTIONS 1, 7, 10, 11, 12, and 13 of this act take effect July 1, 2001. SECTIONS 22, 23, 24, 25, and 26 take effect on the first day of the second month following approval by the Governor. The remaining SECTIONS of this act take effect upon approval by the Governor, and SECTIONS 2, 3, 4, 5, 6, 8, 9, 14, and 15 apply to taxable years beginning after December 31, 2000, SECTION 31 applies to tax periods beginning after December 31, 1997, SECTION 45 applies to property tax years beginning after December 31, 1999, and SECTION 51 applies beginning after December 31, 2001. /

    Renumber sections to conform.

    Amend totals and title to conform.

ROBERT W. HARRELL, JR. for Committee.

REVENUE IMPACT 1/

    This bill is expected to reduce general fund corporation license tax revenue an estimated $26,750 in FY2001-02.

Explanation

    This bill clarifies language, makes technical changes (inserts omitted references and deletes obsolete sections) to existing language or updates administrative procedures. The following sections of the bill are expected to have a revenue impact in FY2001-02.

    Section 2. This section would conform to the Internal Revenue Service (IRS) treatment of a "qualified subchapter 'S' subsidiary" as not being a separate tax entity. A "qualified subchapter 'S' subsidiary" is a "C" corporation with subsidiaries that issue at least eighty percent of stock in the entire organization. The IRS does not require separate accounting for the "C" corporations. Payment of a corporation license fee by a "C" corporation under this arrangement would no longer be required. According to the Department of Revenue, this section is expected reduce corporation license fee revenue an estimated $1,750 from one "C" corporation in FY2001-02.

    Section 17. This section would delete the requirement that homeowner associations must file a tax return and remit a corporation license tax. This section would make homeowners associations either a non-profit organization or a charitable organization. According to records with the Secretary of State and the Department of Revenue, there are an estimated 2,000 homeowners associations in the state. Currently, an estimated one-half are remitting a corporate license tax. Multiplying 1,000 homeowners associations by the minimum corporate license fee of $25 yields an estimated reduction of $25,000 in General Fund corporate license fees in FY2001-02.

    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 CHAPTER 10, TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE ENTERPRISE ZONE ACT, BY ADDING SECTION 12-10-95 SO AS TO PROVIDE FOR A WITHHOLDING CREDIT FOR RETRAINING OF A PRODUCTION OR TECHNOLOGY EMPLOYEE; TO AMEND SECTION 12-2-25, RELATING TO TREATMENT OF A SINGLE-MEMBER LIABILITY COMPANY AND A GRANTOR TRUST FOR PURPOSES OF SOUTH CAROLINA INCOME TAX, SO AS TO INCLUDE A "QUALIFIED SUBCHAPTER 'S' SUBSIDIARY" AS AN ENTITY THAT IS NOT REGARDED SEPARATELY FROM ITS OWNER OR GRANTOR; TO AMEND SECTIONS 12-6-40, AS AMENDED, AND 12-6-50, BOTH RELATING TO APPLICATION AND ADOPTION OF THE FEDERAL INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS TO CLARIFY THE MEANINGS OF CERTAIN TERMS IN THE APPLICATION OF THE PROVISIONS AND TO EXCLUDE ADDITIONAL PROVISIONS CONCERNING THE TAXATION OF FOREIGN INCOME; TO AMEND SECTION 12-6-2210, RELATING TO MEASUREMENT OF THE ENTIRE NET INCOME OF A TAXPAYER, SO AS TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-6-3330, RELATING TO THE DEFINITION OF "SOUTH CAROLINA EARNED INCOME" FOR PURPOSES OF THE TWO WAGE EARNER CREDIT, SO AS TO REFINE CITATIONS TO THE INTERNAL REVENUE CODE; TO AMEND SECTION 12-6-3410, RELATING TO DEFINITIONS FOR PURPOSES OF THE CORPORATE INCOME TAX CREDIT FOR CORPORATE HEADQUARTERS, SO AS TO INCLUDE INFORMATION TECHNOLOGY AS A HEADQUARTERS-RELATED FUNCTION; TO AMEND SECTION 12-6-3500, RELATING TO RETIREMENT PLAN TAX CREDITS, SO AS TO DETERMINE THE TAXPAYER'S LIFE EXPECTANCY FROM THE TIME HE FIRST CLAIMS THE RETIREMENT INCOME DEDUCTION; TO AMEND SECTION 12-6-3520, RELATING TO INCOME TAX CREDIT FOR HABITAT CONSTRUCTION, MAINTENANCE, AND MANAGEMENT, SO AS TO MAKE A TECHNICAL CLARIFICATION BY CROSS-REFERENCING SPECIFIC SECTIONS IMPOSING TAX LIABILITY AND TO ALLOW THE CREDIT TO A MEMBER OF A LIMITED LIABILITY COMPANY TAXED AS A PARTNERSHIP; TO AMEND SECTIONS 12-10-30, 12-10-50, 12-10-80, AND 12-10-81, ALL AS AMENDED AND ALL RELATING TO THE ENTERPRISE ZONE ACT, SO AS TO CONFORM ITS PROVISIONS TO INCLUDE A JOB DEVELOPMENT CREDIT FOR THE TRAINING OR RETRAINING OF AN INFORMATION TECHNOLOGY EMPLOYEE, TO INCLUDE TECHNOLOGY INTENSIVE FACILITIES AS QUALIFYING BUSINESSES, TO ADJUST THE HOURLY WAGE RANGES FOR DETERMINING THE JOB CREDIT PERCENTAGE, TO PROVIDE FOR PENALTIES FOR FAILURE TO TIMELY PAY TAXES, TO PROVIDE FOR INDEPENDENT CERTIFICATIONS OF SATISFACTION OF REQUIREMENTS, AND TO EFFECT TECHNICAL CHANGES; TO AMEND SECTION 12-13-20, RELATING TO THE DEFINITION OF "NET INCOME" FOR PURPOSES OF INCOME TAX PAYABLE BY A BUILDING AND LOAN ASSOCIATION, SO AS TO UPDATE CROSS-REFERENCES; TO AMEND SECTION 12-13-60, RELATING TO THE APPLICABILITY AND ADOPTION OF APPROPRIATE ENFORCEMENT AND ADMINISTRATION PROVISIONS OF TAX LAW TO TAXATION OF BUILDING AND LOAN ASSOCIATIONS, SO AS TO UPDATE CROSS-REFERENCES AND MAKE OTHER TECHNICAL CHANGES; TO AMEND SECTION 12-20-90, RELATING TO THE CORPORATION LICENSE FEE FOR A HOLDING COMPANY, SO AS TO INSERT "INSURER" IN DISTINGUISHING BETWEEN THE HOLDING COMPANY AND THE SUBSIDIARY FOR PURPOSES OF CALCULATING THE AMOUNT OF THE FEE; TO AMEND SECTION 12-20-110, RELATING TO INAPPLICABILITY OF THE PROVISIONS FOR CORPORATION LICENSE FEES TO CERTAIN ORGANIZATIONS, COMPANIES, AND ASSOCIATIONS, SO AS TO MAKE THE PROVISIONS INAPPLICABLE TO A HOMEOWNERS' ASSOCIATION AND TO MAKE TECHNICAL CHANGES; TO AMEND SECTION 12-28-530, RELATING TO INCREASE IN TAX RATES ON MOTOR FUEL, SO AS TO INCLUDE MOTOR FUEL HELD IN REGISTERED AND NONREGISTERED TANKS; TO AMEND SECTION 12-28-985, RELATING TO FLOORSTOCKS TAX REPORT AND PAYMENT, SO AS TO PROVIDE FOR THE DEPARTMENT TO DETERMINE THE DUE DATE; TO AMEND SECTION 12-28-1135, RELATING TO THE FUEL VENDOR LICENSE AND FEE, SO AS TO REQUIRE THE PURCHASER FROM A TERMINAL SUPPLIER TO BE LICENSED; TO AMEND SECTION 12-28-1730, RELATING TO MONTHLY REPORTS FROM FUEL TRANSPORTERS, SO AS TO IMPOSE A CIVIL PENALTY FOR FAILURE TO INCLUDE CERTAIN INFORMATION; TO AMEND SECTION 12-36-90, RELATING TO DEFINITIONS OF "GROSS PROCEEDS OF SALE" FOR PURPOSES OF THE SALES AND USE TAX, SO AS TO CHANGE THE TAX PAID ON AN UNCOLLECTIBLE DEBT TO A DEDUCTION INSTEAD OF A CREDIT; TO AMEND SECTION 12-36-130, AS AMENDED, RELATING TO DEFINITION OF "SALES PRICE" FOR SALES TAX PURPOSES, SO AS TO EXCLUDE AN AMOUNT ACTUALLY CHARGED OFF AS UNCOLLECTIBLE; TO AMEND SECTION 12-36-910, RELATING TO IMPOSITION OF THE SALES TAX, SO AS TO REQUIRE THE SOURCING OF MOBILE TELECOMMUNICATIONS SERVICES CHARGES SUBJECT TO THE SALES TAX; TO AMEND SECTION 12-36-940, RELATING TO AMOUNTS ADDED TO THE SALES PRICE AS A RESULT OF THE STATE SALES TAX, SO AS TO CLARIFY THE RANGE OF SUMS AND TO PROVIDE FOR THE AMOUNTS WHICH MAY BE ADDED TO THE SALES PRICE FOR PURPOSES OF THE STATE SALES TAX ON ACCOMMODATIONS AND COMBINED STATE SALES TAX AND LOCAL TAX FOR COUNTIES IMPOSING A LOCAL TAX; TO AMEND SECTION 12-36-1310, RELATING TO IMPOSITION OF THE USE TAX, SO AS TO REQUIRE THE SOURCING OF MOBILE TELECOMMUNICATIONS SERVICES WITH CHARGES SUBJECT TO THE USE TAX; TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO EXEMPTIONS FROM AD VALOREM TAXATION, SO AS TO INCLUDE A CROSS REFERENCE; TO AMEND SECTION 12-37-930, AS AMENDED, RELATING TO VALUATION OF PROPERTY FOR PURPOSES OF ASSESSMENT OF TAXES, SO AS TO PROVIDE THAT THE DEPARTMENT OF REVENUE DESIGNATE THE BOOK OF VEHICLE VALUATIONS FOR PURPOSES OF ESTABLISHING THE VALUATIONS, TO REDUCE THE MAXIMUM VALUATION FROM NINETY-FIVE PERCENT TO EIGHTY-FIVE PERCENT OF THE SUGGESTED RETAIL PRICE OF A NEW VEHICLE, WATERCRAFT, OR PERSONAL AIRCRAFT, AND TO REQUIRE A TEN PERCENT REDUCTION OF THE PREVIOUS YEAR'S VALUE IN SUBSEQUENT YEARS; TO AMEND SECTION 12-37-2640, RELATING TO DETERMINATION OF THE ASSESSED VALUE OF A MOTOR VEHICLE BY THE COUNTY AUDITOR, SO AS TO REQUIRE THE USE OF THE NATIONALLY RECOGNIZED PUBLICATION OF VEHICLE VALUATIONS AS DESIGNATED BY THE DEPARTMENT, TO PROVIDE A LIMITED ALTERNATIVE, AND TO ESTABLISH A MINIMUM AND MAXIMUM ASSESSED VALUE FOR A MOTORCYCLE BASED ON ITS MODEL YEAR; TO AMEND SECTION 12-37-2680, RELATING TO THE TIME FOR DETERMINATION OF THE ASSESSED VALUE OF A VEHICLE, SO AS TO DELETE THE REQUIREMENT THAT THE DEPARTMENT PUBLISH A VEHICLE VALUATION GUIDE; TO AMEND SECTION 12-54-43, AS AMENDED, RELATING TO CIVIL PENALTIES APPLICABLE TO TAX AND REVENUE LAW, AND SECTION 12-54-44, RELATING TO CRIMINAL PENALTIES APPLICABLE TO TAX AND REVENUE LAW, SO AS TO DELETE THE CRIMINAL PENALTY FOR FAILURE TO DEPOSIT OR PAY TAXES DEDUCTED AND WITHHELD FOR PAYMENT AND TO PROVIDE A CIVIL PENALTY; TO AMEND CHAPTER 54, TITLE 12, RELATING TO COLLECTION AND ENFORCEMENT OF TAXATION, BY ADDING SECTION 12-54-195 SO AS TO PROVIDE FOR A PENALTY ASSESSED AGAINST A PERSON WHO IS RESPONSIBLE FOR REMITTING, BUT FAILS TO REMIT, SALES TAX TO THE DEPARTMENT OF REVENUE; TO AMEND SECTION 12-54-85, AS AMENDED, RELATING TO TIME LIMITATIONS AND EXCEPTIONS FOR ASSESSMENT OF TAXES AND FEES, SO AS TO PROVIDE FOR SUSPENSION OF THE RUNNING OF THE STATUTE OF LIMITATIONS WHILE AN INDIVIDUAL TAXPAYER IS CONSIDERED "FINANCIALLY DISABLED" AND TO DEFINE THAT TERM; TO AMEND SECTION 12-54-200, RELATING TO THE REQUIREMENT OF A BOND TO SECURE PAYMENT OF TAXES, SO AS TO PROVIDE THE ALTERNATIVE AND ADDITIONAL SECURITY OF DEPOSIT AND MAINTENANCE OF TAXES DUE IN A SEPARATE ACCOUNT, TO DELETE THE REQUIREMENT OF NOTICE BY CERTIFIED MAIL, AND TO PROVIDE THAT NONCOMPLIANCE IS A MISDEMEANOR TRIABLE IN MAGISTRATE'S COURT; TO AMEND SECTION 12-54-227, AS AMENDED, RELATING TO OUT-OF-STATE COLLECTIONS, SO AS TO DELETE THE REQUIREMENT OF NOTICE BY CERTIFIED MAIL; TO AMEND SECTION 12-54-240, AS AMENDED, RELATING TO PROHIBITION OF DISCLOSURE OF RECORDS AND REPORTS AND RETURNS FILED WITH THE DEPARTMENT, SO AS TO ALLOW AN EXCEPTION FOR DISCLOSURE OF A DEFICIENCY ASSESSMENT TO AN ATTORNEY CONDUCTING A CLOSING; TO AMEND SECTION 12-56-120, RELATING TO APPEALS FROM THE SETOFF DEBT COLLECTION ACT, SO AS TO PROVIDE THAT THE DEPARTMENT AND THE INTERNAL REVENUE SERVICE ARE EXEMPT AND ARE SUBJECT EXCLUSIVELY TO OTHER APPEAL PROCEDURES; TO AMEND SECTION 12-58-185, RELATING TO EXTENSIONS OF PAYMENT PERIODS, SO AS TO DELETE PRESCRIBED EXTENSION PERIODS; TO AMEND SECTION 12-60-90, RELATING TO THE ADMINISTRATIVE TAX PROCESS FOR PURPOSES OF THE REVENUE PROCEDURES ACT, SO AS TO UPDATE CITATIONS TO THE INTERNAL REVENUE CODE; TO AMEND SECTION 4-37-30, AS AMENDED, RELATING TO SALES AND USE TAXES OR TOLLS AS REVENUE FOR TRANSPORTATION FACILITIES, SO AS TO CLARIFY "MISALLOCATIONS" FOR PURPOSES OF ADJUSTING LATER DISTRIBUTIONS; AND TO AMEND ACT 588 OF 1994, RELATING TO THE CHEROKEE COUNTY SCHOOL DISTRICT 1 SCHOOL BOND-PROPERTY TAX RELIEF ACT AND ACT 441 OF 2000, RELATING TO THE CHESTERFIELD COUNTY SCHOOL DISTRICT SCHOOL BOND-PROPERTY TAX RELIEF ACT, BOTH SO AS TO CLARIFY THE METHOD AND TIMING OF THE CORRECTION OF MISALLOCATION OF SALES TAX REVENUES BY THE STATE TREASURER AND TO PROVIDE FOR THE DISTRIBUTION OF SALES TAX REVENUES UNDER THE ACT WHEN THE DEPARTMENT OF REVENUE IS UNABLE TO IDENTIFY THE SOURCE OF THE REVENUES.

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

SECTION    1.    Chapter 10, Title 12 of the 1976 Code is amended by adding:

    "Section 12-10-95.    (A)    Subject to the conditions in this section, a business engaged in manufacturing or processing operations or technology intensive activities at a manufacturing, processing, or technology intensive facility as defined in Section 12-6-3360(M) and that meets the requirements of Section 12-10-50(B) may negotiate with the council to claim as a credit against withholding five hundred dollars a year for the retraining of a production or technology employee if retraining is necessary for the qualifying business to remain competitive or to introduce new technologies. In addition to the yearly limits, the retraining credit claimed against withholding may not exceed two thousand dollars over five consecutive years for each retrained production or technology employee.

    (B)    A qualifying business is eligible to claim as a retraining credit against withholding the lower amount of the following:

        (1)    the retraining credit for the applicable withholding period as determined by subsection (A); or

        (2)    withholding paid to the State for the applicable withholding period.

    (C)    All retraining must be approved by a technical college under the jurisdiction of the State Board for Technical and Comprehensive Education. A qualifying business must submit a retraining program for approval by the appropriate technical college. The approving technical college may provide the retraining itself, subject to the retraining program, or contract with other training entities to provide the required retraining.

    (D)    Travel and lodging expenses and wages for retraining participants are not reimbursable.

    (E)    The qualifying business must match on a dollar-for-dollar basis the amount claimed as a credit against withholding for retraining. When applicable, the total amount of retraining credits and matching funds must be paid to the technical college that provides the training. All training costs, including costs in excess of the retraining credits and matching funds, are the responsibility of the business.

    (F)    A qualifying business claiming retraining credits pursuant to this section is subject to the reporting and audit requirements in Section 12-10-80(A).

    (G)    A qualifying business may not claim retraining credit for training provided to the following production or technology employees:

        (a)    temporary or contract employees; and

        (b)    employees who are subject to a revitalization agreement, including a preliminary revitalization agreement."

SECTION    2.    Section 12-2-25 of the 1976 Code is amended to read:

    "Section 12-2-25.    (A)    As used in this title and unless otherwise required by the context:

        (1)    'partnership' includes a limited liability company taxed for South Carolina income tax purposes as a partnership.;

        (2)    'partner'    includes any a member of a limited liability company taxed for South Carolina income tax purposes as a partnership.;

        (3)    'corporation' includes a limited liability company or professional or other association taxed for South Carolina income tax purposes as a corporation.; and

        (4)    'shareholder' includes any a member of a limited liability company taxed for South Carolina income tax purposes as a corporation.

    (B)    Single-member limited liability companies which are not taxed for South Carolina income tax purposes as a corporation, and grantor trusts, to the extent they are grantor trusts, will be ignored for all South Carolina tax purposes. For South Carolina tax purposes:

        (1)    a single-member limited liability company, which is not taxed for South Carolina income tax purposes as a corporation, is not regarded as an entity separate from its owner;

        (2)    a 'qualified subchapter 'S' subsidiary', as defined in Section 1361(b)(3)(B) of the Internal Revenue Code, is not regarded as an entity separate from the 'S' corporation that owns the stock of the qualified subchapter 'S' subsidiary; and

        (3)    a grantor trust, to the extent that it is a grantor trust, is not regarded as an entity separate from its grantor.

    (C)    For purposes of this section, the Internal Revenue Code reference is as provided in Section 12-6-40(A)."

SECTION    3.    Section 12-6-40 of the 1976 Code, as last amended by Section 7, Part II, Act 387 of 2000, is further amended to read:

    "Section 12-6-40.    (A)(1)    'Internal Revenue Code' means the Internal Revenue Code of 1986 as amended through December 31, 1999 2000, and includes the effective date provisions contained therein in it.

        (2)(a)    For purposes of this title, 'Internal Revenue Code' is deemed to contain all changes necessary for the State to administer its provisions. Unless a different meaning is required:

                ( i)    'Secretary', 'Secretary of the Treasury', or 'Commissioner' means the Director of the Department of Revenue.

                ( ii)    'Internal Revenue Service' means the department.

                (iii)    'Return' means the appropriate state return.

                ( iv)    'Income' includes the modifications required by Article 9 of this chapter and allocation and apportionment as provided in Article 17 of this chapter.

    Other terms in the Internal Revenue Code must be given the meanings necessary to effectuate this item.

            (b)    For purposes of Internal Revenue Code Sections 67 (Two Percent Floor on Miscellaneous Itemized Deductions), 71 (Alimony and Separate Maintenance Payments), 85 (Unemployment Compensation), 165 (Losses), 170 (Charitable Contributions), 213 (Medical and Dental Expenses), 219 (Retirement Savings), 469 (Passive Activity Losses and Credits Limited), and 631 (Gain or Loss in the Case of Timber, Coal, or Domestic Iron Ore), 'Adjusted Gross Income' for South Carolina income tax purposes means a taxpayer's adjusted gross income for federal income tax purposes without regard to the adjustments required by Article 9 and Article 17 of this chapter.

            (c)    For a taxpayer utilizing the provisions of Internal Revenue Code Section 1341 (Computation of Tax where Taxpayer Restores Substantial Amount Held under Claim of Right) for South Carolina tax purposes the phrase 'taxes imposed by this chapter' means taxes imposed by Chapter 6 of this title.

            (d)    The terms defined in Internal Revenue Code Sections 7701, 7702, and 7703 have the same meaning for South Carolina income tax purposes, unless a different meaning is clearly required.

    (B)    All elections made for federal income tax purposes in connection with Internal Revenue Code Sections adopted by this State automatically apply for South Carolina income tax purposes unless otherwise provided. A taxpayer may not make an election solely for South Carolina income tax purposes except for elections not applicable for federal purposes, including filing a combined or composite return as provided in Sections 12-6-5020 and 12-6-5030, respectively.

    (C)    For purposes of Internal Revenue Code Sections 67 (Two Percent Floor on Miscellaneous Itemized Deductions), 71 (Alimony and Separate Maintenance Payments), 85 (Unemployment Compensation), 165 (Losses), 170 (Charitable Contributions), 213 (Medical and Dental Expenses), 219 (Retirement Savings), 469 (Passive Activity Losses and Credits Limited), and 631 (Gain or Loss in the Case of Timber, Coal, or Domestic Iron Ore), "Adjusted Gross Income" for South Carolina income tax purposes means a taxpayer's adjusted gross income for federal income tax purposes without regard to the adjustments required by Article 9 and Article 17 of this chapter.

    (D)    For a taxpayer utilizing the provisions of Internal Revenue Code Section 1341 (Computation of Tax where Taxpayer Restores Substantial Amount Held under Claim of Right) for South Carolina tax purposes the phrase "taxes imposed by this chapter" means taxes imposed by Chapter 6 of this title.

    (E)    The terms defined in Internal Revenue Code Sections 7701, 7702, and 7703 have the same meaning for South Carolina income tax purposes, unless a different meaning is clearly required.

    (F)(C)    If a taxpayer complies with the provisions of Internal Revenue Code Section 367 (Foreign Corporations), it is not necessary for the taxpayer to obtain the approval of the department. The taxpayer shall attach a copy of the approval received from the Internal Revenue Service to its next South Carolina income tax return."

SECTION    4.    Section 12-6-50(11) of the 1976 Code is amended to read:

    "(11)    Sections 861 through 908, 912, and 931 through 940, and 944 through 989 relating to the taxation of foreign income;"

SECTION    5.    Section 12-6-2210(A) of the 1976 Code is amended to read:

    "(A)    If the entire business of a taxpayer is transacted or conducted within this State, the income tax as provided in this chapter is measured by the entire net income of the taxpayer for the taxable year. The entire business of the taxpayer is transacted and or conducted within the State if the taxpayer is not subject to a net income tax or a franchise tax measured by net income in another state, the District of Columbia, a territory or possession of the United States, or a foreign country, or and would not be subject to a net income tax in another such taxing jurisdiction if the other taxing jurisdiction adopted the net income tax laws of this State."

SECTION    6.    Section 12-6-3330(C)(2) of the 1976 Code is amended to read:

    "(2)    The term 'South Carolina earned income' means income which that is earned income within the meaning of Internal Revenue Code Section 911(d)(2) or 401(c)(2)(C) which and is taxable in this State, except that:

        (a)    it does not include an amount:

            ( i)    received from a retirement plan or an annuity;

            ( ii)    paid or distributed from an individual retirement plan as defined in Internal Revenue Code Section 7701(a)(37);

            (iii)    received as deferred compensation; or

            ( iv)    received for services performed by an individual employed by his spouse within the meaning of Internal Revenue Code Section 3121(b)(3)(A)(B) as amended through December 31, 1987; and

        (b)    Internal Revenue Code Section 911(d)(2)(B) must be applied without regard to the phrase 'not in excess of thirty percent of his share of net profits of such trade or business'."

SECTION    7.    Section 12-6-3410(J)(1) and (4) are amended to read:

    (1)    'Corporate headquarters' means the facility or portion of a facility where corporate staff employees are physically employed, and where the majority of the company's financial, personnel, legal, planning, information technology, or other headquarters related functions are handled either on a regional or national basis. A corporate headquarters must be a regional corporate headquarters or a national corporate headquarters as defined below:

        (a)    National corporate headquarters must be the sole corporate headquarters in the nation and handle headquarters related functions on a national basis. A national headquarters shall be deemed to handle headquarters related functions on a national basis from this State if the corporation has a facility in this State from which the corporation engages in interstate commerce by providing goods or services for customers outside of this State in return for compensation.

        (b)    Regional corporate headquarters must be the sole corporate headquarters within the region and must handle headquarters related functions on a regional basis. For purposes of this section, 'region' or 'regional' means a geographic area comprised of either:

            ( i)    at least five states, including this State, or

            (ii)    two or more states, including this State, if the entire business operations of the corporation are performed within fewer than five states.

    (4)    'Headquarters related functions and services' are those functions involving financial, personnel, administrative, legal, planning, information technology, or similar business functions."

SECTION    8.    Section 12-6-3500 of the 1976 Code is amended to read:

    "Section 12-6-3500.    If the right to receive retirement income by a taxpayer allowed the deduction pursuant to Section 12-6-1170 was earned by the taxpayer while residing in another state which imposed state income tax on the employee's contributions, a credit is allowed against the taxpayer's South Carolina income tax liability in an amount sufficient to offset the taxes paid the other state. This credit must be claimed over the taxpayer's lifetime. The department shall prescribe the amount of the annual credit based on the taxpayer's life expectancy at the time of the election made pursuant to the taxpayer first claims the retirement income deduction pursuant to Section 12-6-1170, and may require the documentation it determines necessary to verify the amount of income tax paid the other state on the contributions. Regardless of the tax rates applicable on the contributions in the other state, the total of the credit allowed may not exceed an amount determined by multiplying the contributions taxed in each year by the marginal South Carolina individual income tax rate for that year."

SECTION    9.    Section 12-6-3520 of the 1976 Code is amended to read:

    "Section 12-6-3520.    (A)    There shall be is allowed as a tax credit against the income tax liability of a taxpayer an amount equal to fifty percent of the costs incurred by the taxpayer for habitat management or construction and maintenance of improvements on real property that are made to land as described in Section 50-15-55(A) and which meets meet the requirements of regulations promulgated by the Department of Natural Resources pursuant to Section 50-15-55(A). For purposes of this section, 'costs incurred' means those monies spent or revenue foregone for habitat management or construction and maintenance, but does not include revenue foregone as increases in land values or speculative costs related to development.

    (B)    All costs must be incurred on land that has been designated as a certified management area for endangered species enumerated in Section 50-15-40 or for nongame and wildlife species determined to be in need management under Section 50-15-30.

    (C)    The tax credit allowed by this section must be claimed in the year that such the costs, as provided in subsection (B), are incurred as provided for in subsection (B). The This credit established by this section taken in one year may not exceed fifty percent of the taxpayer's income tax liability due pursuant to Section 12-6-510 or 12-6-530 for that year. If the amount of the credit exceeds the taxpayer's income tax liability for that taxable year, the taxpayer may carry forward any the excess for up to ten years.

    (D)    If during any taxable year the landowner voluntarily chooses to leave the agreement made concerning the certified areas during any taxable year after taking the tax credit, then the taxpayer's tax liability for the current taxable year must be increased by the full amount of any credit claimed in prior previous years with respect to the property.

    (E)(1)    An 'S' corporation, limited liability company, or partnership that qualifies for the credit under pursuant to this section as an 'S' corporation or partnership entitles may pass through the credit earned to each shareholder of the 'S' corporation, member of the limited liability company, or partner of the partnership to a nonrefundable credit against taxes. Any credit generated by an 'S' corporation must first be used against any tax liability of the 'S' corporation under Section 12-6-530. Any remaining credit passes through to the shareholders of the 'S' corporation.

        (2)    The amount of the credit allowed a shareholder, member, or partner, or owner of a limited liability company pursuant to this section is equal to the shareholder's percentage of stock ownership, the member's interest in the limited liability company, or the partner's interest in the partnership, for the taxable year, multiplied by the amount of the credit that the taxpayer would have been entitled to if it were taxed as a corporation earned by the entity. Credit earned by an 'S' corporation owing corporate level income tax must be used first at the entity level. Only the remaining credit passes through to the shareholders of the 'S' corporation.

        (3)    For purposes of this subsection, 'limited liability company' means a limited liability company taxed like a partnership."

SECTION    10.    Section 12-10-30 of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:

    Section 12-10-30.    As used in this chapter:

    (1)    'Council' means the Advisory Coordinating Council for Economic Development.

    (2)    'Department' means the South Carolina Department of Revenue.

    (3)    'Employee' means an employee of the qualifying business who works full time within the enterprise zone at the project.

    (4)    'Gross wages' means wages subject to withholding.

    (5)    'Job development credit' means the amount a qualifying business may claim as a credit against employee withholding pursuant to Sections 12-10-80 and 12-10-81 and a revitalization agreement.

    (6)    'New job' means a job created or reinstated as defined in Section 12-6-3360(M)(3).

    (7)    'Qualifying business' means a business that meets the requirements of Section 12-10-50 and other applicable requirements of this chapter and, where required pursuant to Section 12-10-50, enters into a revitalization agreement with the council to undertake a project pursuant to the provisions of this chapter.

    (8)    'Project' means an investment for one or more purposes pursuant to this chapter needed for a qualifying business to locate, remain, or expand in this State and otherwise fulfill the requirements of this chapter.

    (9)    'Preliminary revitalization agreement' means the application by the qualifying business for benefits pursuant to Section 12-10-80 or 12-10-81 if the council approves the application and agrees in writing at the time of approval to allow the approved application to serve as the preliminary revitalization agreement. The date of the preliminary revitalization agreement is the date of the council approval.

    (10)    'Revitalization agreement' means an executed agreement entered into between the council and a qualifying business that describes the project and the negotiated terms and conditions for a business to qualify for a job development credit pursuant to Section 12-10-80 or 12-10-81.

    (11)    'Qualifying expenditures' means those expenditures that meet the requirements of Section 12-10-80(C) or 12-10-81(D).

    (12)    'Withholding' means employee withholding pursuant to Chapter 8 of this title.

    (13)    'Technology employee' means an employee whose job qualifies for jobs tax credit pursuant to at a technology intensive facility as defined in Section 12-6-3360(M)(14) who is directly engaged in technology intensive activities at that facility.

    (14)    'Production employee' means an employee directly engaged in manufacturing or processing at a manufacturing or processing facility as defined in Section 12-6-3360(M).

    (15)    'Retraining agreement' means an agreement entered into between a business and the council in which a qualifying business is entitled to retraining credit pursuant to Section 12-10-95.

    (16)    'Retraining credit' means the amount that a business may claim as a credit against withholding pursuant to Section 12-10-95 and the retraining agreement.

    (17)    'Technology intensive activities' means the design, development, and introduction of new products or innovative manufacturing processes, or both, through the systematic application of scientific and technical knowledge at a technology intensive facility as defined in Section 12-6-3360(M)."

SECTION    11.    Section 12-10-50 of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:

    "Section 12-10-50.    (A)    To qualify for the benefits provided in this chapter, a business must be located within this State and must:

    (1)    be engaged primarily in a business of the type identified in Section 12-6-3360;

    (2)    provide a benefits package, including health care, to full-time employees at the project;

    (3)    enter into a revitalization agreement that is approved by the council and that describes a minimum job requirement and minimum capital investment requirement for the project as provided in Section 12-10-90, except that a revitalization agreement is not required for a qualifying business with respect to Section 12-10-80(D); and

    (4)    have negotiated incentives that council has determined are appropriate for the project, and the council shall certify that:

        (a)    the total benefits of the project exceed the costs to the public; and

        (b)    the business otherwise fulfills the requirements of this chapter.

    (B)    To qualify for benefits pursuant to Section 12-10-95, a business must:

        (1)    be engaged in manufacturing or processing operations or technology intensive activities at a manufacturing, processing, or technology intensive facility as defined in Section 12-6-3360(M);

        (2)    provide a benefits package, including health care, to employees being retrained; and

        (3)    enter into a retraining agreement with the council."

SECTION    12.    Section 12-10-80 of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:

    "Section 12-10-80.    (A)    A business that qualifies pursuant to Section 12-10-50(A) and has submitted independently audited proof to the council that the business has met the minimum job requirement and minimum capital investment provided for in the revitalization agreement may claim job development credits as determined by this section.

        (1)    A business may claim job development credits against its withholding on its quarterly state withholding tax return for the amount of job development credits allowable pursuant to this section.

        (2)    A business that is current with respect to its withholding tax and other tax due and owing the State and that has maintained its minimum employment and investment levels identified in the revitalization agreement may claim the credit on a quarterly basis beginning with the first quarter after the council's certification to the department that the minimum employment and capital investment levels were met for the entire quarter. If a qualifying business is not current as to all taxes due and owing to the State as of the date of the return on which the credit would be claimed, without regard to extensions, the business is barred from claiming the credit that would otherwise be allowed for that quarter.

        (3)    A qualifying business may receive claim its initial job development credit only after the council has certified to the department that the qualifying business has met the required minimum employment and capital investment levels.

        (4)    To be eligible to apply to the council to claim a job development credit, a qualifying business shall create at least ten new, full-time jobs, as defined in Section 12-6-3360(M), at the project described in the revitalization agreement within five years of the effective date of the agreement.

        (5)    A qualifying business is eligible to claim a job development credit pursuant to the revitalization agreement for not more than fifteen years.

        (6)    To the extent any return of an overpayment of withholding that results from claiming job development credits is not used as permitted by subsection (C) or (D) by Section 12-10-95, it must be treated as misappropriated employee withholding.

        (7)    Except as provided in subsection (D), Job development credits may not be claimed for purposes of this section with regard to an employee whose job was created in this State before the taxable year of the qualifying business in which it enters into a preliminary revitalization agreement.

        (8)    If a qualifying business claims job development credits pursuant to this section, it shall make its payroll books and records available for inspection by the council and the department at the times the council and the department request. Each qualifying business claiming job development credits pursuant to this section shall file with the council and the department the information and documentation requested by the council or department respecting employee withholding, the job development credit, and the use of any overpayment of withholding resulting from the claiming of a job development credit according to the revitalization agreement.

        (9)    Each qualifying business claiming in excess of ten thousand dollars in a calendar year must furnish an audited report prepared by an independent certified public accountant that itemizes the sources and uses of the funds. The audited report must be filed with the council and the department no later than June thirtieth following the calendar year in which the job development credits are claimed, except when a qualifying business obtains the written approval by the council for an extension of that date. Extensions may be granted only for good cause shown. The department shall impose a penalty pursuant to Section 12-54-210 for all reports filed after June thirtieth or the approved extension date, whichever is later.

        (10)    Each qualifying business claiming ten thousand dollars or less in any calendar year must furnish a report prepared by the company that itemizes the sources and uses of the funds. This report must be filed with the council and the department no later than June thirtieth following the calendar year in which the job development credits are claimed, except when a qualifying business obtains the written approval by the council for an extension of that date. Extensions may be granted only for good cause shown. The department shall impose a penalty pursuant to Section 12-54-210 for all reports filed after June thirtieth or the approved extension date, whichever is later.

        (11)    An employer may not claim an amount that results in an employee's receiving a smaller amount of wages on either a weekly or on an annual basis than the employee would receive otherwise in the absence of this chapter.

    (B)(1)    The maximum job development credit a qualifying business may claim for new employees is limited to the lesser of withholding tax paid to the State on a quarterly basis or the sum of the following amounts:

            (a)    two percent of the gross wages of each new employee who earns 6.74 dollars $6.95 or more an hour but less than 8.99 dollars $9.27 an hour;

            (b)    three percent of the gross wages of each new employee who earns 8.99 dollars 9.27 or more an hour but less than 11.23 dollars $11.58 an hour;

            (c)    four percent of the gross wages of each new employee who earns 11.23 dollars $11.58 or more an hour but less than 16.85 dollars $17.38 an hour; and

            (d)    five percent of the gross wages of each new employee who earns 16.85 dollars $17.38 or more an hour.

        (2)    The hourly gross wage figures in item (1) must be adjusted annually by an inflation factor determined by the State Budget and Control Board. The amount that may be claimed by a qualifying business is limited by subsection (C) and the revitalization agreement. The council may approve a waiver of ninety-five percent of the limits pursuant to subsection (C) for qualifying businesses making a significant capital investment as defined in Section 4-12-30(D)(4) or Section 4-29-67(D)(4).

    (C)    To claim a job development credit, the qualifying business must incur qualified expenditures at the project or for utility or transportation improvements that serve the project. To be qualified, the expenditures must be:

        (1)    incurred during the term of the revitalization agreement, including a preliminary revitalization agreement, or within sixty days before the execution of a revitalization agreement, including a preliminary revitalization agreement council's receipt of an application for benefits pursuant to this section;

        (2)    authorized by the revitalization agreement; and

        (3)    used for any of the following purposes:

            (a)    training costs and facilities;

            (b)    acquiring and improving real estate whether constructed or acquired by purchase, or in cases approved by the council, acquired by lease or otherwise;

            (c)    improvements to both public and private utility systems including water, sewer, electricity, natural gas, and telecommunications;

            (d)    fixed transportation facilities including highway, rail, water, and air;

            (e)    construction or improvements of real property and fixtures constructed or improved primarily for the purpose of complying with local, state, or federal environmental laws or regulations;

            (f)    employee relocation expenses associated with new or expanded technology intensive facilities as defined in Section 12-6-3360(M)(14);

            (g)    financing the costs of a purpose described in items (a) through (f).

    (D)(1)    The amount of job development credits a qualifying business may claim for its use for qualifying expenditures is limited according to the designation of the county as defined in Section 12-6-3360(B) as follows:

            (1)(a)    one hundred percent of the maximum job development credits may be claimed by businesses located in counties designated as 'least developed';

            (2)(b)    eighty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as 'underdeveloped';

            (3)(c)    seventy percent of the maximum job development credits may be claimed by businesses located in counties designated as 'moderately developed'; or

            (4)(d)    fifty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as 'developed'.

        (2)    The amount that may be claimed as a job development credit by a qualifying business is limited by this subsection and by the revitalization agreement. The council may approve a waiver of ninety-five percent of the limits provided in item (1) for a qualifying business making a significant capital investment as defined in Section 4-12-30(D)(4), 4-29-67(D)(4), or 12-44-30(8).

        (3)    The county designation of the county in which the project is located at the time the qualifying business enters into a preliminary revitalization agreement with the council remains in effect for the entire period of the revitalization agreement, except as to additional jobs created pursuant to an amendment to a revitalization agreement entered into before June 1, 1997, as provided in Section 12-10-60. In that case the county designation on the date of the amendment remains in effect for the remaining period of the revitalization agreement as to any additional jobs created after the effective date of the amendment. This item does not apply to a business whose application for job development fees or credits pursuant to Section 12-10-81 has been approved by council before the effective date of this act.

    (E)    The council shall certify to the department the maximum job development credit for each qualifying business. After receiving certification, the department shall remit an amount equal to the difference between the maximum job development credit and the job development credit actually claimed to the State Rural Infrastructure Fund as defined and provided in Section 12-10-85.

    (D)Subject to the conditions in this section, a qualifying business in this State may negotiate with the council to claim a job development credit for retraining according to the procedure in subsection (A) in an amount equal to five hundred dollars a year for each production and technology employee being retrained, where this retraining is necessary for the qualifying business to remain competitive or to introduce new technologies. This retraining must be approved and performed by the appropriate technical college under the jurisdiction of the State Board for Technical and Comprehensive Education. The technical college may provide the retraining program delivery directly or contract with other training entities to accomplish the required training outcomes. In addition to the yearly limits, the amount claimed as a job development credit for retraining may not exceed two thousand dollars over five years for each production employee being retrained. Additionally, the qualifying business must match on a dollar-for-dollar basis the amount claimed as a job development credit for retraining. The total amount claimed as job development credits for retraining and all of the matching funds of the qualifying business must be paid to the technical college that provides the training to defray the cost of the training program. Training cost in excess of the job development credits for retraining and matching funds is the responsibility of the qualifying business based on negotiations with the technical college.

    (E)(F)    Any job development credit of a qualifying business permanently lapses upon expiration or termination of the revitalization agreement. If an employee is terminated, the qualifying business immediately must cease to claim job development credits as to that employee.

    (F)    The statute of limitations provided by Section 12-54-85 is suspended until the end of the five-year period described in item (4) of subsection (A) with respect to state withholding taxes pursuant to this section for a business subject to this section.

    (G)    For purposes of the job development credit allowed by this section, an employee is a person whose job was created in this State.

    (H)    Job development credits may not be claimed by a governmental employer who employs persons at a closed or realigned military installation as defined in Section 12-10-88(E)."

SECTION    13.    Section 12-10-81 of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:

    "Section 12-10-81.    (A)    A business may claim a job development credit as determined by this section if the:

        (1)    council approves the use of this section for the business;

        (2)    business qualifies pursuant to Section 12-10-50; and

        (3)    business is a tire manufacturer that has more than four hundred twenty-five million dollars in capital invested in this State and employs more than one thousand employees in this State and that commits within a period of five years from the date of a revitalization agreement, to invest an additional three hundred fifty million dollars and create an additional three hundred fifty jobs in this State qualifying for job development fees or credits pursuant to current or future revitalization agreements; except that the business must submit independently audited proof to the council that the business has satisfied all minimum capital investment and job requirements identified in the revitalization agreements but not certified by the council to the department before July 1, 2001. The council, in its discretion, may extend the five-year period for two additional years if the business has made a commitment to the additional three hundred fifty million dollars and makes substantial progress toward satisfying the goal before the end of the initial five-year period. A business that represents to the council its intent to qualify pursuant to this section and is approved by the council may put job development fees computed pursuant to this section into an escrow account until the date the business satisfies provides independently audited proof to the council that the business has satisfied the capital and job requirements of this section.

    (B)(1)    A business qualifying pursuant to this section may claim its job development credit against its withholding on its quarterly state withholding tax return for the amount of job development credit allowable pursuant to this section for not more than fifteen years. Job development credits allowed pursuant to subsection (C)(1)(a) through (d) of this section apply only to withholding on jobs created pursuant to a revitalization agreement adopted pursuant to this section and to the amounts withheld on wages and salaries on those jobs.

        (2)    A business that is current with respect to its withholding tax as well as any other tax due and owing the State and that has maintained its minimum employment and investment levels identified in the revitalization agreement may claim the credit on a quarterly basis beginning with the quarter subsequent to the council's certification to the department that the minimum employment and capital investment levels have been met for the entire quarter. If a qualifying business is not current as to all taxes due and owing to the State as of the date of the return on which the credit would be claimed, without regard to extensions, the business is barred from claiming the credit that would otherwise be allowed for that quarter.

        (3)    To be eligible to apply to the council to claim a job development credit pursuant to this section, a qualifying business must create at least ten new, full-time jobs as defined in Section 12-6-3360(M) at the project or projects described in the revitalization agreement.

        (4)    To the extent a return of an overpayment of withholding that results from claiming job development credits is not used as permitted by subsection (D), it must be treated as misappropriated employee withholding.

        (5)    Job development credits may not be claimed for purposes of this section with regard to an employee whose job was created in this State before the taxable year the qualifying business enters into a preliminary revitalization agreement.

        (6)    If a qualifying business claims job development credits pursuant to this section, it must make its payroll books and records available for inspection by the council and the department at the times the council and the department request. Each qualifying business claiming job development credits pursuant to this section must file with the council and the department the information and documentation they request respecting employee withholding, the job development credit, and the use of overpayment of withholding resulting from the claiming of a job development credit according to the revitalization agreement.

        (7)    Each qualifying business must furnish an audited report prepared by an independent certified public accountant that itemizes the sources and uses of the funds. The audited report must be filed with the council and the department no later than June thirtieth following the calendar year in which the job development credits are claimed, except when a qualifying business obtains written approval of council for an extension of that date. Extensions may be granted for good cause shown. The department shall impose a penalty pursuant to Section 12-54-210 for all reports filed after June thirtieth or the approved extension date, whichever is later.

        (8)    An employer may not claim an amount that results in an employee's receiving a smaller amount of wages on either a weekly or on an annual basis than the employee would otherwise receive in the absence of this chapter.

    (C)(1)    The maximum job development credit a qualifying business may claim for new employees is determined by the sum of the following amounts:

            (a)    two percent of the gross wages of each new employee who earns $6.74 $6.95 or more an hour but less than $8.99 $9.27 an hour;

            (b)    three percent of the gross wages of each new employee who earns $8.99 $9.27 or more an hour but less than $11.23 $11.58 an hour;

            (c)    four percent of the gross wages of each new employee who earns $11.23 $11.58 or more an hour but less than $16.85 $17.38 an hour;

            (d)    five percent of the gross wages of each new employee who earns $16.85 $17.38 or more an hour; and

            (e)    the increase in the state sales and use tax of the business from the year of the effective date of its revitalization agreement pursuant to this section and subsequent years, over its state sales and use tax for the first of the three years preceding the effective date of this revitalization agreement.

        (2)    The hourly base wages in item (1) must be adjusted annually by the inflation factor determined by the State Budget and Control Board. The amount that may be claimed by a qualifying business is limited by subsection (E) and the negotiated terms of the revitalization agreement. The business may proceed by using either the job development fee escrow procedure available pursuant to revitalization agreements with effective dates before 1997, or the job development credit, or a combination of the two. For a business qualifying pursuant to this section, the council also may approve or waive sections of a revitalization agreement and the council's rules as needed, in the council's discretion, to assist the business.

    (D)    To claim a job development credit, the qualifying business must incur expenditures at the project or for utility or transportation improvements that serve the project. To be qualified, the expenditures must be:

        (1)    incurred during the term of the revitalization agreement, including a preliminary revitalization agreement, or within sixty days before council's receipt of an application for benefits pursuant to this section;

        (2)    authorized by the revitalization agreement; and

        (3)    used to reimburse the business for:

            (a)    training costs and facilities;

            (b)    acquiring and improving real estate whether constructed or acquired by purchase, or in cases approved by the council, acquired by lease or otherwise;

            (c)    improvements to both public and private utility systems including water, sewer, electricity, natural gas, and telecommunication;

            (d)    fixed transportation facilities including highway, rail, water, and air; or

            (e)    construction or improvements of real property and fixtures constructed or improved primarily for the purpose of complying with local, state, or federal environmental laws or regulations.

    (E)(1)    For purposes of subsection (C)(1)(a) through (d), the amount of job development credits a qualifying business may claim for its use for qualifying expenditures is limited according to the designation of the county as defined in Section 12-6-3360(B) as follows:

            (a)    one hundred percent of the maximum job development credits may be claimed by businesses located in counties designated as 'least developed';

            (b)    eighty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as 'underdeveloped';

            (c)    seventy percent of the maximum job development credits may be claimed by businesses located in counties designated as 'moderately developed'; or

            (d)    fifty-five percent of the maximum job development credits may be claimed by businesses located in counties designated as 'developed'.

        (2)    For purposes of this subsection, the county designation of the county in which the project is located at the time the qualifying business enters into a preliminary revitalization agreement with the council remains in effect for the entire period of the revitalization agreement.

        (3)    The amount claimed by a qualifying business is limited by this subsection and the terms of the revitalization agreements. The business may use either the job development escrow procedure pursuant to revitalization agreements with effective dates before 1997 or the job development credit, or a combination of the two. For a business qualifying pursuant to this section, the council also may approve or waive sections of a revitalization agreement and rules of the council, in the council's discretion, to assist the business.

        (4)    The council shall certify to the department the maximum job development credit for each qualifying business. After receiving certification, the department shall remit an amount equal to the difference between the maximum job development credit and the job development credit actually claimed to the State Rural Infrastructure Fund as defined and provided in Section 12-10-85.

    (F)    A job development credit of a qualifying business permanently lapses upon expiration or termination of the revitalization agreement. If an employee is terminated, the qualifying business immediately must cease to claim job development credits as to that employee.

    (G)    The statute of limitations provided by Section 12-54-85 is suspended until the end of the five-year or seven-year period described in item (3) of subsection (A) with respect to state withholding taxes pursuant to this section for a business subject to this section.

    (H)    For purposes of the job development credit allowed by this section, an employee is a person whose job was created in this State."

SECTION    14.    Section 12-13-20 of the 1976 Code is amended to read:

    "Section 12-13-20.    The term 'net income', as used in this chapter, means taxable income as determined for a regular corporation in Chapter 7 6 of this title after deducting all earnings accrued, paid, credited, or set aside for the benefit of holders of savings or investment accounts, any additions to reserves which are required by law, regulation, or direction of appropriate supervisory agencies, and a bad debt deduction. The bad debt deduction allowable for South Carolina income tax purposes is the amount determined under the Internal Revenue Code and the applicable regulations as amended through December 31, 1986 as defined in Section 12-6-40. No deductions from income are allowed for any additions to undivided profits or surplus accounts other than herein required, and for the purposes of this chapter, a state-organized association is allowed the same deductions for bad debt reserves as those allowed to federally organized associations. Associations shall maintain the bad debt reserves allowed as a deduction pursuant to this section in accordance with the provisions of the Internal Revenue Code as amended through December 31, 1986, as defined in Section 12-6-40 and shall keep a permanent record. These provisions are controlling notwithstanding any other provision of law."

SECTION    15.    Section 12-13-60 of the 1976 Code is amended to read:

    "Section 12-13-60.    For the purpose of administration, enforcement, collection, liens, penalties, and other similar provisions, all of the provisions of Chapter 7 6 of this title that may be are appropriate or applicable are adopted and made a part of this chapter, including the requirement to make declarations requirements of declaration and payment of estimated tax and make estimated tax payments."

SECTION    16.    Section 12-20-90 of the 1976 Code is amended to read:

    "Section 12-20-90.    The amount of the license fee required by Section 12-20-50 for a bank holding company, insurance holding company system, and savings and loan holding company must be measured by the capital stock and paid-in surplus of the holding company exclusive of the capital stock and paid-in surplus of a bank, insurer, or savings and loan association that is a subsidiary of the holding company. For the purposes of this section, 'bank', 'bank holding company', and 'subsidiary' of a bank holding company have the same definitions as in Section 34-24-20; 'insurer', 'insurance holding company system', and a 'subsidiary' of an insurance holding company system have the same definitions as in Section 38-21-10; and savings and loan 'association', 'savings and loan holding company', and a 'subsidiary' of a savings and loan company have the same definitions as in Section 34-28-300."

SECTION    17.    Section 12-20-110 of the 1976 Code is amended to read:

    "Section 12-20-110.    The provisions of this chapter do not apply to any:

    (1)    nonprofit corporation organized under Article 1 of pursuant to Chapter 31 or 33 of Title 33 and exempt from income taxes pursuant to Section 501 of the Internal Revenue Code of 1986;

    (2)    volunteer fire department and rescue squad;

    (3)    cooperative organized under Chapter 45 or 47 of pursuant to Title 33;

    (4)    bank, building and loan association, or credit union doing a strictly mutual business;

    (5)    insurance company or association including any a fraternal, beneficial, or mutual protection insurance company; or

    (6)    foreign corporation whose entire income is not included in excluded from gross income for federal income tax purposes due to any a treaty obligation of the United States; or

    (7)    homeowners' association within the meaning of Internal Revenue Code Section 528(c)(1)."

SECTION    18.    Section 12-28-530 of the 1976 Code is amended to read:

    "Section 12-28-530.    (A)    The tax imposed by Section 12-28-310 on the date of an increase in the tax rate set out in that section is applicable to previously taxed taxable motor fuel:

        (1)    in excess of one thousand gallons held in storage by an end user and held in a storage tank required to be registered by the South Carolina Department of Health and Environmental Control;

        (2)    inventory held for sale by a fuel vendor in excess of one thousand gallons and held in an end user storage tank not registered with the South Carolina Department of Health and Environmental Control which is identified by an agent of the department at the time of an audit of inspection.

    (B)    The tax imposed by Section 12-28-310 is applicable to nonexempt inventory held by a person outside of the bulk transfer system in this State in quantities which, in the aggregate with respect to the person, exceed one thousand gallons, to the extent the inventory previously has not been subject to the tax imposed by this State under the predecessor motor fuel tax statute. However, no tax is payable with respect to taxable motor fuel which is dyed diesel fuel or held by an exempt user including government entities described under Sections 12-28-710(A)(6) and 12-28-710(A)(12). Reserved

    (C)    Persons in possession of taxable motor fuel subject to this section shall perform the following:

        (1)    take an inventory to determine the gallons in storage for purposes of determining the tax on inventory;

        (2)    deduct the amount of taxable motor fuel in dead storage;

        (3)    deduct these gallons in which tax at the full rate previously has been paid; Reserved

        (4)    take a deduction for gallons of dyed diesel fuel included in item (1) above, if appropriate;

        (5)    report the gallons listed in item (1) on forms provided by the department.

    (D)    The amount of the inventory tax is equal to the inventory tax rate times the gallons in storage as determined under subsection (B). The inventory tax rate is equal to the difference between the increased tax rate minus the previous tax rate to which those gallons were previously subjected to tax.

    (E)    Payment of this floorstock tax must be made in conformity with Section 12-28-985.

    (F)    The department shall use storage tank information obtained from the South Carolina Department of Health and Environmental Control to determine persons in possession of taxable motor fuel in excess of one thousand gallons subject to the provisions of this section."

SECTION    19.    Section 12-28-985 of the 1976 Code is amended to read:

    "Section 12-28-985.    The floorstocks tax report required by Section 12-28-530(A) (e) must be accompanied by payment of the floorstocks tax calculated in accordance with Section 12-28-530(B) (D). The due date of the report must be determined by the department. Payment must be made on or before the due date of that report. The floorstocks tax imposed on inventory held outside of the bulk transfer system on the effective date of this chapter reportable under Section 12-28-530(A) is payable in two equal annual installments beginning twelve months after the effective date of the act. However, a person may pay the full amount due with a timely filed return and may take a fifteen percent discount."

SECTION    20.    Section 12-28-1135(A) of the 1976 Code is amended to read:

    "(A)    Each person who engages in the business of selling taxable motor fuel at wholesale or retail or storing or distributing purchases taxable motor fuel for resale within this State from a licensed terminal supplier first shall obtain a fuel vendor license which is operative for all locations controlled or operated by that licensee in this State or in any other state from which the person removes fuel for delivery and use in South Carolina."

SECTION    21.    A.    Section 12-28-1730(E) of the 1976 Code is amended to read:

    "(E)    The department may impose a civil penalty against every terminal operator who wilfully fails to meet shipping paper issuance requirements under Sections 12-28-920, 12-28-1500, and 12-28-1575 or files a return without the supporting schedules as required by the department pursuant to Sections 12-28-1330 and 12-28-1340. The civil penalty imposed on the terminal operator is the same as the civil penalty imposed under subsection (B)."

B.    Section 12-28-1730 of the 1976 Code is amended by adding:

    "(H)    If a person liable for the tax files a return without providing all information required by the department, there is added to the tax the amount provided in Section 12-54-43(C)(1)."

SECTION    22.    Section 12-36-90(2)(h) of the 1976 Code is amended to read:

    "(h)    the sales price, not including sales tax, of property on sales which are actually charged off as bad debts or uncollectible accounts for state income tax purposes. A taxpayer who pays the tax on the unpaid balance of an account which has been found to be worthless and is actually charged off for state income tax purposes may take credit for the tax paid a deduction for the sales price charged off as a bad debt or uncollectible account on a return filed pursuant to this chapter, except that if an amount charged off is later paid in whole or in part to the taxpayer, the amount paid must be included in the first return filed after the collection and the tax paid. The deduction allowed by this provision must be taken within one year of the month the amount was determined to be a bad debt or uncollectible account."

SECTION    23.    Section 12-36-130 of the 1976 Code, as last amended by Section 2, Act 283 of 2000, is further amended by adding a paragraph at the end to read:

    "The term 'sales price' as defined in this section, also does not include the sales price, not including tax, of property on sales which are actually charged off as bad debts or uncollectible accounts for state income tax purposes. A taxpayer who pays the tax on the unpaid balance of an account which has been found to be worthless and is actually charged off for state income tax purposes may take a deduction for the sales price charged of as a bad debt or uncollectible account on a return filed pursuant to this chapter, except that if an amount charged off is later paid in whole or in part to the taxpayer, the amount paid must be included in the first return filed after the collection and the tax paid. The deduction allowed by this paragraph must be taken within one year of the month the amount was determined to be a bad debt or uncollectible account."

SECTION    24.    Section 12-36-910(B)(3) of the 1976 Code is amended to read:

    "(3)    gross proceeds accruing or proceeding from the charges for the ways or means for the transmission of the voice or messages, including the charges for use of equipment furnished by the seller or supplier of the ways or means for the transmission of the voice or messages. Charges for mobile telecommunications services subject to the tax under this item must be sourced in accordance with the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code. The term 'charges for mobile telecommunications services' is defined for purposes of this section the same as it is defined in the Mobile Telecommunications Sourcing Act;"

SECTION    25.    Section 12-36-940 of the 1976 Code is amended to read:

    "Section 12-36-940.    (A)    Every Each retailer may add to the sales price as a result of the five percent state sales tax:

        (1)    no amount on sales of ten cents or less;

        (2)    one cent on sales of eleven cents and over, but not in excess of through twenty cents;

        (3)    two cents on sales of twenty-one cents and over, but not in excess of through forty cents;

        (4)    three cents on sales of forty-one cents and over, but not in excess of through sixty cents;

        (5)    four cents on sales of sixty-one cents and over, but not in excess of through eighty cents;

        (6)    five cents on sales of eighty-one cents and over, but not in excess of through one dollar;

        (7)    one cent additional for each twenty cents or major fraction thereon in excess of it over of one dollar.

    (B)    The inability, impracticability, refusal, or failure to add these amounts to the sales price and collect them from the purchaser does not relieve the taxpayer from the tax levied by this article.

    (C)    For purposes of the state sales tax on accommodations and applicable combined state sales and local tax for counties imposing a local sales tax collected by the department on their behalf, retailers may add to the sales price an amount equal to the total state and local sales tax rate times the sales price. The amount added to the sales price may not be less than the amount added pursuant to subsection (A). In calculating the tax due, retailers may round a fraction of more than one-half of a cent to the next whole cent and a fraction of a cent of one-half or less must be eliminated. The inability, impracticability, refusal, or failure to add the tax to the sales price as allowed by this subsection and collect them from the purchaser does not relieve the taxpayer of his responsibility to pay tax."

SECTION    26.    Section 12-36-1310(B)(3) of the 1976 Code is amended to read:

        "(3)    gross proceeds accruing or proceeding from the charges for the ways or means for the transmission of the voice or messages, including the charges for use of equipment furnished by the seller or supplier of the ways or means for the transmission of the voice or messages. Charges for mobile telecommunications services subject to the tax under this item must be sourced in accordance with the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code. The term 'charges for mobile telecommunications services' is defined for purposes of this section the same as it is defined in the Mobile Telecommunications Sourcing Act;"

SECTION    27.    Section 12-37-220(C) of the 1976 Code is amended to read:

    "(C)    Upon approval by the governing body of the county, the five-year partial exemption allowed pursuant to subsections (A)(7), and (B)(32), and (B)(34) is extended to an unrelated purchaser who acquires the facilities in an arms-length transaction and who preserves the existing facilities and existing number of jobs. The partial exemption applies for the purchaser for five years if the purchaser otherwise meets the exemption requirements."

SECTION    28.    The introductory paragraph of Section 12-37-930 of the 1976 Code is amended to read:

    "All property must be valued for taxation at its true value in money which in all cases is the price which the property would bring following reasonable exposure to the market, where both the seller and the buyer are willing, are not acting under compulsion, and are reasonably well informed of the uses and purposes for which it is adapted and for which it is capable of being used. The fair market value for vehicles, watercraft, and aircraft must be based on values derived from a nationally recognized publication of vehicle valuations, except that the value may not exceed ninety-five percent of the prior year's value. The Department of Revenue shall designate the nationally recognized publication and purchase the publication for county use in valuations. A new vehicle, watercraft, or personal aircraft is valued by the county at eighty-five percent of the manufacturer's suggested retail price as contained in the designated publication. The value is reduced by ten percent of the previous year's value in each subsequent year. For models for which the department has provided values previously, the current value is reduced by ten percent for each subsequent year. However, acreage allotments or marketing quota allotments for a commodity established under a program of the United States Department of Agriculture is classified as incorporeal hereditaments and the market value of real property to which they are attached may not include the value, if any, of the acreage allotment or marketing quota. Fair market value of manufacturer's machinery and equipment used in the conduct of the manufacturing business, excluding vehicles, watercraft, and aircraft required to be registered or licensed by a state or federal agency, must be determined by reducing the original cost by an annual allowance for depreciation as stated in the following schedule."

SECTION    29.    Section 12-37-2640 of the 1976 Code is amended to read:

    "Section 12-37-2640.    The auditor shall determine the assessed value of the motor vehicle based on the values appearing in a nationally recognized publication of vehicle valuations as designated by the department, and shall calculate the amount of taxes on the vehicle. If the value of a vehicle does not appear in the publication, the auditor shall determine the value from other available and reliable information. However, in the case of motor vehicles whose If the model year of a motor vehicle is fifteen years or more prior to before the tax year, the assessed value is fifty dollars and in the case of a motor vehicle whose. If the model year of a motor vehicle is less than fifteen years prior to before the tax year, the assessed value must not be less than at least fifty dollars. If a motorcycle has a model year of fifteen years or more before the tax year, the assessed value is twenty dollars, and if its model year is less than fifteen years before the tax year, the assessed value must be at least twenty dollars. The millage to be applied to motor vehicles licensed during January through December of each year must be that applied to other taxable property within the county, school district, special or tax district and, if applicable, the municipality for the preceding regular tax year."

SECTION    30.    Section 12-37-2680 of the 1976 Code is amended to read:

    "Section 12-37-2680.    The assessed value of the vehicle must be determined as of the first day of the month preceding the beginning of the tax year for the vehicles vehicle. The assessed values must be published in guides or manuals by the South Carolina Department of Revenue and provided to the auditor of each county as often as may be necessary to provide for current values. When the value of any vehicle is not set forth in the guide or manual the auditor shall determine the value from other available information."

SECTION    31.    Section 12-54-43 of the 1976 Code, as last amended by Act 399 of 2000, is further amended by adding an appropriately lettered subsection to read:

    "( )    A failure to deposit or pay taxes deducted and withheld pursuant to Article 5 of Chapter 8 subjects the withholding agent to a penalty of not less than ten dollars nor more than one thousand dollars. The penalty imposed by this item applies to failure to comply with the provisions of Section 12-54-250."

SECTION    32.    Section 12-54-44(C) of the 1976 Code is amended to read:

    "(C)    A failure to deposit or pay taxes deducted and withheld pursuant to Article 5 of Chapter 8 subjects the withholding agent to a penalty of not less than ten dollars nor more than one thousand dollars. The penalty imposed by this item applies to failure to comply with the provisions of Section 12-54-250. Reserved    "

SECTION    33.    Chapter 54, Title 12 of the 1976 Code is amended by adding:

    "Section 12-54-195.    (A)    As used in this section, 'responsible person' includes any officer, partner, or employee of the taxpayer who has a duty to pay to the department the sales tax due by the taxpayer or use tax required or authorized to be collected by the retailer pursuant to Chapter 36 of this title.

    (B)    If a retailer adds and collects the sales tax as permitted by Section 12-36-940, or collects the use tax from the purchaser as required by Section 12-36-1350, but the retailer fails to remit the tax collected to the department, then any responsible person may be held liable, individually and personally, for a penalty equal to one hundred percent of the tax collected but not remitted to the department. The tax is not collectible from the retailer to the extent the penalty imposed by this subsection is collected from a responsible person."

SECTION    34.    Section 12-54-85 of the 1976 Code, as last amended by Act 399 of 2000, is further amended by adding an appropriately numbered subsection at the end to read:

    "( )(1)    An individual taxpayer is 'financially disabled' if he is unable to manage his financial affairs by reason of a medically determinable physical or mental impairment that is expected to result in death or that has lasted or is expected to last for a continuous period of not less than twelve months. An individual taxpayer does not have that impairment for this purpose unless proof of the existence of the impairment is provided to the department in the form and manner the department requests.

        (2)    The running of the period of limitation provided in subsection (F) is suspended during a period an individual taxpayer is considered financially disabled.

        (3)    An individual taxpayer may not be treated as financially disabled during a period that his spouse or another person is authorized lawfully to act on his behalf in financial matters."

SECTION    35.    Section 12-54-200 of the 1976 Code is amended to read:

    "Section 12-54-200.    (a)(A)    The department, at its discretion, after notification as provided in subsection (b) of this section, may require any a person subject to provisions of law administered by the department, not including Section 12-35-330, to post a cash or surety bond, deposit and maintain taxes due including associated penalties and interest in a separate account in a bank or other financial institution in this State, or both, if the person fails to file a timely return or pay any a tax for as many as two tax filing periods in a twelve-month period.

    (B)    The amount of the bond must be determined by the department and may not be greater than three times the estimated average liability each filing period of the person required to file the return. A cash bond must be held by the State Treasurer, without interest, as surety conditioned upon prompt payment of all taxes, penalties, and interest imposed by law upon the person.

    (C)    If a person is required to maintain a separate account, he must give the name of the financial institution, the account number, and other information the department requires. Taxes, penalties, and interest due must be withdrawn from the account by preprinted, consecutively numbered checks signed by a properly authorized officer, partner, manager, employee, or member of the taxpayer and made payable to the department. Monies deposited in the account may not be commingled with other funds. The department, at its discretion, may apply Section 12-54-250, if the amount due from the taxpayer is twenty thousand dollars or more.

    (D)    When any a person required to post a bond or maintain a separate account, or both, complies with all requirements of law and regulations for a period of twenty-four consecutive months, the department shall return the bond and cancel the bonding and separate account requirements.

    (b)(E)    The department shall may serve the notice required by subsection (b) of this section by certified mail, or by delivery by an authorized agent of the department delivering the notice to the person in hand or by leaving the notice at the person's last or usual place of abode or at his place of business or employment. For corporations, partnerships, or trusts, the notice may be delivered by certified mail, or by delivery by an authorized agent for of the department delivering the notice to an officer, partner, or trustee in hand, or by leaving the notice at the officer's, partner's, or trustee's last or usual place of abode or at his place of business or employment.

    (F)    A person who fails to comply with this section is guilty of a misdemeanor and, upon conviction, must be fined not more than five hundred dollars or imprisoned not more than thirty days, or both. Offenses under this section are triable in magistrate's court. These penalties are in addition to other penalties provided by law."

SECTION    36.    Section 12-54-227(A)(2) of the 1976 Code is amended to read:

    "(2)    For purposes of this section, 'delinquent tax claim' means a tax liability that is due and owing for a period longer than six months and for which the taxpayer has been given at least three notices requesting payment and for any subsequent tax debts issued, one notice of which has been sent by certified or registered mail. The notice sent by certified or registered mail must include includes a statement that the taxpayer's delinquency may be referred to a collection agency in the taxpayer's home state."

SECTION    37.    Section 12-54-240(B)(6) of the 1976 Code is amended to read:

    "(6)    disclosure of a deficiency assessment to a probate court or to an attorney conducting a closing, the filing of a tax lien for uncollected taxes, and the issuance of a notice of levy;"

SECTION    38.    Section 12-56-120 of the 1976 Code is amended to read:

    "Section 12-56-120.    The department is and Internal Revenue Service are exempt from the notice and appeal procedures of this chapter. The sole and exclusive appeal procedures procedure for the setoff of any a debt owed to the department is governed by the provisions of Chapter 60 of Title 12 which provides the sole and exclusive remedy for these procedures. The appeal procedure in connection with a liability to the Internal Revenue Service is governed by Title 26 of the United States Code."

SECTION    39.    Section 12-58-185(A) of the 1976 Code is amended to read:

    "(A)    The department may extend the time for payment of an amount due it for a period not to exceed eighteen months from the date fixed for the payment and, in exceptional cases, for a further period not to exceed twelve months. An extension under pursuant to this section may be granted only where if it is shown to the satisfaction of the department that the payment of the amount due it upon the date originally fixed for the payment will result in undue hardship to the taxpayer."

SECTION    40.    Section 12-60-90(C) of the 1976 Code is amended to read:

    "(C)    Taxpayers may be represented during the administrative tax process by:

        (1)    the same individuals who can may represent them in administrative tax proceedings with the Internal Revenue Service pursuant to Section 10.3 (a), (b), and (c), Section 10.7 (a), (1) (c)(i) through (4) and (7) (c)(vi), and (c)(viii), and Section 10.7 (b) (d) and (c) (e) of United States Treasury Department Circular No. 230; and

        (2)    a real estate appraiser who is registered, licensed, or certified pursuant to Chapter 60 of Title 40 during the administrative tax process in a matter limited to questions concerning the valuation of real property."

SECTION    41.    Section 4-37-30(A)(15) of the 1976 Code, as amended by Act 368 of 2000, is further amended to read:

    "(15)    The revenues of the tax collected in each county pursuant to this section must be remitted to the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of refunds made and costs to the Department of Revenue of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues and all interest earned on the revenues while on deposit with him quarterly to the county in which the tax is imposed and these revenues and interest earnings must be used only for the purpose stated in the imposition ordinance. The State Treasurer may correct misallocation misallocations costs or refunds by adjusting later distributions, but these adjustments must be made in the same fiscal year as the misallocation misallocations. However, allocations made as a result of city or county code errors must be corrected prospectively."

SECTION    42.    A.        Section 6(A) of Act 588 of 1994 is amended to read:

    "(A)    The revenues of the tax collected in the county under this act must be remitted to the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of refunds made and costs to the Department of Revenue and Taxation of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer who holds the debt service funds established for payment of principal and interest on the bonds to which the tax is applicable. The State Treasurer may correct misallocation misallocations costs or refunds by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocation. However, allocations made as a result of city or county code errors must be corrected prospectively."

B.    Section 6 of Act 588 of 1994, as last amended by Act 458 of 1998, is further amended by adding at the end:

    "(D)    Annually, in the month of June, funds collected by the Department of Revenue from the Cherokee County School District 1 School Bond-Property Tax Relief Act which are not identified as to the governmental unit due the tax after reasonable effort by the department to determine the source of collection must be transferred to the State Treasurer's Office. The State Treasurer shall distribute these funds to the county treasurer in the county area in which the tax is imposed and the revenues must be used only for the purposes stated in the imposition resolution. The State Treasurer shall calculate this supplemental distribution on a proportional basis based on the current fiscal year's county area revenue collections."

SECTION    43.    A.        Section 7A of Act 441 of 2000 is amended to read:

    "(A)    The revenues of the tax collected in the county under this act must be remitted to the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of refunds made and costs to the department of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer, who shall hold the debt service funds for payment of principal and interest on the bonds to which the tax is applicable. The State Treasurer may correct misallocation costs or refunds misallocations by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocation. However, allocations made as a result of city or county code errors must be corrected prospectively."

B.        Section 7 of Act 441 of 2000 is amended by adding at the end:

    "(D)    Annually, in the month of June, funds collected by the Department of Revenue from the Chesterfield County School District School Bond-Property Tax Relief Act which are not identified as to the governmental unit due the tax after reasonable effort by the department to determine the source of collection must be transferred to the State Treasurer's Office. The State Treasurer shall distribute these funds to the county treasurer in the county area in which the tax is imposed and the revenues must be used only for the purposes stated in the imposition resolution. The State Treasurer shall calculate this supplemental distribution on a proportional basis based on the current fiscal year's county area revenue collections."

SECTION    44.    Section 12-10-45 of the 1976 Code is repealed effective July 1, 2001, except that a revitalization agreement, including a preliminary revitalization agreement, entered into before July 1, 2001, remains subject to its provisions.

SECTION    45.    The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.

SECTION    46.    If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed these sections, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

SECTION    47.    SECTIONS 1, 7, 10, 11, 12, and 13 of this act take effect July 1, 2001. SECTIONS 22, 23, 24, 25, and 26 take effect on the first day of the second month following approval by the Governor. SECTION 44 takes effect July 1, 2001, and applies to an agreement entered into after June 30, 2001. The remaining SECTIONS of this act take effect upon approval by the Governor, and SECTIONS 2, 3, 4, 5, 6, 8, 9, 14, and 15 apply to taxable years beginning after December 31, 2000, and SECTIONS 28 through 30 apply to personal property tax years beginning July 1, 2001, and thereafter.

This web page was last updated on Thursday, June 25, 2009 at 2:15 P.M.