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COMMITTEE REPORT
April 11, 2002
H. 5011
S. Printed 4/11/02--H.
Read the first time April 3, 2002.
To whom was referred a Bill (H. 5011) to amend Section 12-36-2610, Code of Laws of South Carolina, 1976, relating to the discount allowed for timely payment of the sales and use tax, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
ROBERT W. HARRELL, JR. for Committee.
REVENUE IMPACT 1/
This bill is expected to increase general fund revenue by an estimated $2,760 in FY 2002-03.
Explanation
Section 1 - This bill would raise the annual threshold for aggregate sales and use tax discounts from $3,000 to $3,100 for taxpayers that file their monthly sales and use tax returns electronically pursuant to Section 12-36-2570, to continue to receive a discount for timely filing of their sales tax return. According to the Department of Revenue, an estimated 1,700 retailers have reached the maximum annual discount threshold of $3,000. Also, an estimated eighty-five percent of returns are filed electronically. Multiplying an estimated 1,700 retailers by the $100 increase in the sales tax discount threshold, and adjusting for eighty-five percent of electronic sales tax filers, yields a reduction in general fund sales and use tax revenue of an estimated $144,500 in FY 2002-03.
Section 2 - This bill would also lower the requirement of Section 12-54-250 that any taxpayer owing $20,000 or more in connection with any return, report, or other document filed with the Department of Revenue to $15,000, and to make the funds immediately available to the State on the date of payment. According to the Department of Revenue, this would affect an estimated $215,000,000 in tax receipts. Electronically filing of the tax payments would accelerate the collection of the funds by an estimated five days, according to the Department of Revenue. Multiplying $215,000,000 in tax receipts by five days and applying an average interest rate of five percent on general fund revenue investments, yields an increase of an estimated $147,260 of general fund revenue in FY 2002-03.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.
TO AMEND SECTION 12-36-2610, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DISCOUNT ALLOWED FOR TIMELY PAYMENT OF THE SALES AND USE TAX, SO AS TO PROVIDE THAT MAXIMUM DISCOUNT ALLOWED OF THREE THOUSAND DOLLARS IN A STATE FISCAL YEAR IS THREE THOUSAND ONE HUNDRED DOLLARS FOR ELECTRONICALLY FILED RETURNS; AND TO AMEND SECTION 12-54-250, RELATING TO TAX COLLECTION AND ENFORCEMENT BY THE SOUTH CAROLINA DEPARTMENT OF REVENUE, SO AS TO DECREASE FROM TWENTY THOUSAND DOLLARS TO FIFTEEN THOUSAND DOLLARS THE THRESHOLD AMOUNT FOR WHICH PAYMENTS DUE TO THE DEPARTMENT MUST BE PAID BY A METHOD IN WHICH THE FUNDS ARE AVAILABLE IMMEDIATELY TO THE STATE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-36-2610 of the 1976 Code is amended to read:
"Section 12-36-2610. When a sales or use tax return required by Section 12-36-2570 and Chapter 10 of Title 4 is filed and the taxes due on it are paid in full on or before the final due date, including any date to which the time for making the return and paying the tax has been extended pursuant to the provisions of Section 12-54-70, the taxpayer is allowed a discount as follows:
(1) on taxes shown to be due by the return of less than one hundred dollars, three percent;
(2) on taxes shown to be due by the return of one hundred dollars or more, two percent.
In no case is a discount allowed if the return, or the tax on it is received after the due date, pursuant to Section 12-36-2570, or after the expiration of any extension granted by the department. The discount permitted a taxpayer under this section may not exceed three thousand dollars during any one state fiscal year. However, for taxpayers filing electronically, the discount may not exceed three thousand one hundred dollars. However, a A person making sales into this State who cannot be required to register for sales and use tax under applicable law but who nevertheless voluntarily registers to collect and remit use tax on items of tangible personal property sold to customers in this State is entitled to a discount on returns filed as otherwise provided in this section not to exceed ten thousand dollars during any one state fiscal year."
SECTION 2. Section 12-54-250(A) of the 1976 Code is amended to read:
"(A) The South Carolina Department of Revenue may require, consistent with the cash management policies of the State Treasurer, that any person owing twenty fifteen thousand dollars or more in connection with any return, report, or other document to be filed with the department shall pay the tax liability to the State no later than the date the payment is required by law to be made in funds which are available immediately to the State on the date of payment. Payment in immediately available funds may be made by any means established by the department, with the approval of the State Treasurer, which insures ensures the availability of those funds to the State on the date of payment. Evidence of the payment must be furnished to the department on or before the due date of the tax as provided by law. Failure to make timely payment in immediately available funds or failure to provide evidence of payment in a timely manner subjects the taxpayer to penalties and interest as provided by law for delinquent or deficient tax payments."
SECTION 3. This act takes effect July 1, 2002.
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