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Sponsors: Reps. Kirsh and E.H. Pitts
Document Path: l:\council\bills\ggs\22396htc04.doc
Companion/Similar bill(s): 5086
Introduced in the House on January 29, 2004
Currently residing in the House Committee on Ways and Means
Summary: Revenue Dept. clean up bill for 2004
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 1/29/2004 House Introduced and read first time HJ-7 1/29/2004 House Referred to Committee on Ways and Means HJ-10 2/10/2004 House Member(s) request name added as sponsor: E.H.Pitts
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VERSIONS OF THIS BILL
TO AMEND SECTION 6-1-320, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE LIMITS ON ANNUAL INCREASES IN LOCAL GOVERNMENT AND SCHOOL DISTRICT PROPERTY TAX MILLAGE, SO AS TO CLARIFY THE METHOD OF CALCULATING THE ALLOWED CONSUMER PRICE INDEX INCREASE IN THE MILLAGE RATE; TO AMEND SECTION 12-6-40, AS AMENDED, RELATING TO DEFINITIONS FOR PURPOSES OF THE SOUTH CAROLINA INCOME TAX ACT, SO AS TO UPDATE THE DATE WHEREBY THIS STATE ADOPTS BY REFERENCE VARIOUS PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986; TO AMEND SECTION 12-6-1130, AS AMENDED, RELATING TO THE COMPUTATION OF SOUTH CAROLINA TAXABLE INCOME FOR PURPOSES OF THE STATE INCOME TAX, SO AS TO PROVIDE FOR INTEREST DEDUCTIONS; TO AMEND SECTION 12-6-1140, AS AMENDED, RELATING TO DEDUCTIONS FROM SOUTH CAROLINA INDIVIDUAL TAXABLE INCOME FOR PURPOSES OF THE STATE INCOME TAX, SO AS TO DELETE AN OBSOLETE DEDUCTION RELATING TO MEDICAL INSURANCE PREMIUMS; TO AMEND SECTIONS 12-6-2220 AND 12-6-2320, RELATING TO ALLOCATION AND APPORTIONMENT FOR PURPOSES OF THE STATE INCOME TAX, SO AS TO PROVIDE FOR THE ALLOCATION OF DIVIDENDS AND FURTHER PROVIDE FOR ALLOCATION AND APPORTIONMENT WHEN EXISTING METHODS DO NOT FAIRLY REPRESENT THE TAXPAYER'S BUSINESS IN THIS STATE; TO AMEND SECTION 12-6-3365, AS AMENDED, RELATING TO THE CORPORATE INCOME TAX MORATORIUM FOR JOB CREATION, SO AS TO CLARIFY THE APPLICATION OF THE MORATORIUM TO INSURANCE PREMIUM TAXES; TO AMEND SECTION 12-6-3480, RELATING TO TAX CREDITS, SO AS TO FURTHER PROVIDE THE MANNER IN WHICH CREDITS ARE ALLOWED AND MAY BE CLAIMED; TO AMEND SECTION 12-6-4910, AS AMENDED, RELATING TO THOSE REQUIRED TO FILE INCOME TAX RETURNS, SO AS TO PROVIDE FOR THOSE NONRESIDENTS REQUIRED TO FILE IN THIS STATE; TO AMEND SECTION 12-6-1520, AS AMENDED, RELATING TO THE FILING OF CONSOLIDATED CORPORATE INCOME TAX RETURNS, SO AS TO REQUIRE THE DETERMINATION OF CREDITS ON A CONSOLIDATED BASIS; TO AMEND SECTIONS 12-8-520 AND 12-8-1520, RELATING TO STATE INCOME TAX WITHHOLDING, SO AS TO PROVIDE FOR THE WITHHOLDING OF PARTNERSHIP AND SUBCHAPTER "S" CORPORATION INCOME OF NONRESIDENTS AND ADDITIONAL REQUIREMENTS FOR WITHHOLDING AGENTS; TO AMEND SECTION 12-10-105, RELATING TO ANNUAL FEES FOR JOB DEVELOPMENT CREDITS FOR PURPOSES OF THE ENTERPRISE ZONE ACT OF 1995, SO AS TO EXTEND THESE FEES TO JOB RETRAINING CREDITS IN EXCESS OF TEN THOUSAND DOLLARS AND PROVIDE FOR THE COLLECTION OF THESE FEES; TO AMEND SECTION 12-20-105, AS AMENDED, RELATING TO TAX CREDITS FOR PURPOSES OF THE CORPORATE LICENSE TAX, SO AS TO CLARIFY THE APPLICATION OF THESE CREDITS; TO AMEND SECTIONS 12-21-1090 AND 12-21-6550, RELATING TO LICENSE TAXES, SO AS TO PROVIDE FOR THE PERMISSIVE PROMULGATION OF REGULATIONS AND FURTHER PROVIDE FOR THE APPLICATIONS REQUIRED PURSUANT TO THE TOURISM INFRASTRUCTURE ADMISSIONS TAX ACT; TO AMEND SECTION 12-28-1730, AS AMENDED, RELATING TO PENALTIES FOR PURPOSES OF THE MOTOR FUELS TAX, SO AS TO DELETE A CIVIL PENALTY; TO REPEAL SECTION 12-36-530, RELATING TO THE REQUIREMENT FOR THE RETURN OF A RETAIL LICENSE WHEN A BUSINESS CLOSES OR IS SOLD; TO AMEND SECTIONS 12-36-1310 AND 12-36-2120, BOTH AS AMENDED, AND SECTION 12-36-2510, RELATING TO THE SOUTH CAROLINA SALES AND USE TAX ACT, SO AS TO FURTHER PROVIDE FOR THE APPLICATION OF SALES TAX TO TELECOMMUNICATIONS SERVICES, AND PROVIDE FURTHER FOR THE ISSUE OF CERTIFICATES BY THE DEPARTMENT OF REVENUE FOR DIRECT PAY AND EXEMPTIONS AND PROVIDE FOR MORE EFFICIENT ADMINISTRATION OF SALES TAXES AND SALES TAX EXEMPTIONS; TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO PROPERTY TAX EXEMPTIONS, SO AS TO DELETE OBSOLETE REFERENCES IN EXISTING EXEMPTIONS; TO REPEAL SECTION 12-37-290, RELATING TO AN OBSOLETE HOMESTEAD EXEMPTION PROVISION; TO AMEND SECTIONS 12-54-25, AS AMENDED, 12-54-42, AND 12-54-43, AS AMENDED, RELATING TO THE UNIFORM METHOD OF COLLECTION AND ENFORCEMENT OF STATE LEVIED TAXES, SO AS TO CLARIFY WHEN INTEREST IS NOT DUE ON OVERPAYMENTS, TO CLARIFY THE APPLICATION OF PENALTIES FOR FAILING TO PROVIDE WITHHOLDING STATEMENTS, TO CLARIFY AND REVISE THE APPLICATION OF CIVIL PENALTIES FOR FILING GROUNDLESS RETURNS OR FOR MISUSE OF A SALES TAX CERTIFICATE; BY ADDING SECTION 12-54-123 SO AS TO PROTECT FROM LIABILITY A PERSON WHO SURRENDERS THE PROPERTY OF ANOTHER LEVIED ON BY THE DEPARTMENT OF REVENUE; TO AMEND SECTIONS 12-54-90, 12-54-210, AND 12-54-240, AS AMENDED, RELATING TO THE COLLECTION AND ENFORCEMENT OF STATE TAXES, SO AS TO ALLOW THE DEPARTMENT OF REVENUE TO REFUSE TO ISSUE AS WELL AS TO REVOKE A LICENSE TO A TAXPAYER IN VIOLATION AND TO DELETE NOTICE REQUIREMENTS AND TO INCREASE THE PENALTY FOR FAILURE TO KEEP RECORDS, FILE RETURNS, AND COMPLY WITH REGULATIONS, UPDATE REFERENCES RELATING TO THE CONFIDENTIALITY OF RETURNS, AND DELETE AN EXEMPTION TO THE CONFIDENTIALITY REQUIREMENTS FOR RECORDS SUBPOENAED BY A GRAND JURY; TO AMEND SECTION 12-58-185, AS AMENDED, RELATING TO THE TAXPAYERS BILL OF RIGHTS, SO AS TO CLARIFY AND EXTEND THE APPLICATION OF HARDSHIP EXTENSIONS TO PAY; TO AMEND SECTIONS 12-60-420 AND 12-60-490, BOTH AS AMENDED, RELATING TO THE REVENUES PROCEDURE ACT, SO AS TO PROVIDE THAT THE APPLICATION OF A DIVISION DECISION OR A DETERMINATION OF DEFICIENCY APPLIES TO LOCAL TAXES ADMINISTERED BY THE DEPARTMENT OF REVENUE AND REQUIRE SUCH NOTICE TO PROVIDE THAT FAILURE TO FILE A PROTEST WILL RESULT IN A DECISION BECOMING FINAL AND TO PROVIDE FURTHER FOR SETOFFS AGAINST TAX REFUNDS; TO AMEND SECTION 61-4-720, AS AMENDED, RELATING TO THE REGULATION OF WINE, SO AS TO DELETE THE LIMITATION TO DOMESTIC WINE FOR WINE SALES AND TASTINGS AT LICENSED WINERIES IN THIS STATE; BY ADDING SECTION 61-4-725 SO AS TO ALLOW A LICENSED WINERY TO SELL, DELIVER, PERMIT ON-PREMISES CONSUMPTION ON SUNDAYS IN JURISDICTIONS WHERE MINIBOTTLE SALES ARE ALLOWED ON SUNDAYS; TO AMEND SECTIONS 61-4-730 AND 61-4-747, RELATING TO REGULATIONS OF WINE, SO AS TO DELETE THE REQUIREMENT THAT PERMITTED WINERIES SELL ONLY DOMESTIC WINE IN ORDER TO SELL AND DELIVER WINE IN THIS STATE AND TO REQUIRE OUT-OF-STATE WINE SHIPPERS TO PAY SALES AND EXCISE TAXES ON WINE SHIPPED TO RESIDENTS OF THIS STATE BY JANUARY TWENTIETH OF EACH YEAR FOR THE PRECEDING YEAR.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 6-1-320(A) of the 1976 Code, as last amended by Act 114 of 1999, is further amended to read:
"(A) Notwithstanding Section 12-37-251(E), a local governing body may increase the millage rate imposed for general operating purposes above the rate imposed for such purposes for the preceding tax year only to the extent of the increase
in the consumer price index for the in the average of the twelve monthly consumer price indexes for the most recent twelve-month period consisting of January through December of the preceding calendar year. However, in the year in which a reassessment program is implemented, the rollback millage, as calculated pursuant to Section 12-37-251(E), must be used in lieu of the previous year's millage rate."
SECTION 2. Section 12-6-40(A)(1) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(1) 'Internal Revenue Code' means the Internal Revenue Code of 1986, as amended through December 31,
2002 2003, and includes the effective date provisions contained in it."
SECTION 3. A. Section 12-6-1130 of the 1976 Code, as last amended by Act 363 of 2002, is further amended by adding a new item at the end to read:
"(12)(a) No interest deduction is allowed a debtor for the accrual of interest on a debt where the holder is a related party and the interest is not paid in the taxable year of accrual or within two months and fifteen days immediately following the end of the taxable year of accrual. Except as provided in subitem (b), interest deductions disallowed under this section are allowed when the interest is paid. The holder shall include the interest in income in the year the debtor is entitled to take the deduction. This section does not apply to payments deemed to be made by the application of South Carolina's adoption of Internal Revenue Code section 482, 7872, or any similar provision of the Internal Revenue Code or state law.
(b) Notwithstanding subitem (a), no interest deduction is allowed for the accrual or payment of interest on obligations that were issued as a dividend. This interest must be treated as a dividend to the debtor's shareholders when it is paid, and if the shareholders are not the holder at that time, a payment from the shareholders to the holder at that time."
B. Section 12-6-1130 of the 1976 Code, as amended by this section, applies for taxable years beginning after 2004.
SECTION 4. Section 12-6-1140(8) of the 1976 Code is amended to read:
the portion of premiums not deductible pursuant to Internal Revenue Code Section 162(l) because the "applicable percentage" as defined in that section is less than one hundred percent. "
SECTION 5. A. Section 12-6-2220(2) of the 1976 Code is amended to read:
"(2) Dividends received from corporate stocks
owned not connected with the taxpayer's business, less all related expenses, are allocated to the state of the corporation's principal place of business as defined in Section 12-6-30(9) or the domicile of an individual taxpayer."
B. Section 12-6-2220(2) of the 1976 Code, as amended by this section, applies for taxable years beginning after 2003.
SECTION 6. A. Section 12-6-2320(A) of the 1976 Code is amended to read:
"(A) If the allocation and apportionment provisions of this chapter do not fairly represent the extent of the taxpayer's business activity in this State, the taxpayer may petition for, or the department may require, in respect to all or any part of the taxpayer's business activity, if reasonable:
(1) separate or combined accounting;
(2) the exclusion of one or more of the factors;
(3) the inclusion of one or more additional factors which will fairly represent the taxpayer's business activity in the State; or
(4) the employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.
The department's determination that the allocation and apportionment provisions of this chapter do not fairly represent the extent of the taxpayer's business activity in this State is presumed to be correct if the taxpayer shares or exchanges value with one or more related businesses. The taxpayer may rebut this presumption with clear and convincing evidence. The sharing or exchange of value requires more than the mere flow of funds arising out of a passive investment or from the financial strength contributed by a distinct business undertaking that has no operational relationship to the unitary business.
For purposes of this subsection, related businesses are:
(1) a parent and substantially controlled subsidiary or subsidiaries;
(2) two or more businesses under substantially the entire control of the same interest.
The terms 'substantially controlled' and 'substantially the entire control' mean the ownership of more than sixty-six percent of the total combined voting power of the business."
B. Section 12-6-2320(A) of the 1976 Code, as amended by this section, applies for taxable years beginning after 2004.
SECTION 7. A. Section 12-6-3365(A) of the 1976 Code, as amended by Act 69 of 2003, is further amended to read:
"(A) A taxpayer creating and maintaining at least one hundred full-time new jobs, as defined in Section 12-6-3360(M), at a facility of a type identified in Section 12-6-3360(M) may petition, utilizing the procedure in Section 12-6-2320(B), for a moratorium on state corporate income
or insurance premium taxes imposed pursuant to Section 12-6-530 or insurance premium taxes imposed pursuant to Title 38 for the ten taxable years beginning the first full taxable year after the taxpayer qualifies and ending either ten years from that year or the year when the taxpayer's number of full-time new jobs falls below one hundred, whichever is earlier. For purposes of insurance premium taxes, the petition pursuant to Section 12-6-2320(B) must be made to and approved by the director of the Department of Insurance."
B. The amendment to Section 12-6-3365 of the 1976 Code in this section does not affect its repeal as provided in Section 3 of Act 277 of 2000.
SECTION 8. A. Section 12-6-3480 of the 1976 Code is amended to read:
(A) Notwithstanding any other provision of law:
(1) Any credits under Title 38 may be applied against any taxes imposed under this chapter or license fees imposed under Chapter 20 of this title.
(2) Any credits under this chapter or Chapter 14 of this title which are earned by
one member of a controlled group of corporations a corporation included in a consolidated corporate income tax return under Section 12-6-5020 may must be used and applied against the consolidated tax, unless otherwise specifically provided by that member and by any other members of the controlled group of corporations.
(3) Any limitations upon the
total amount of liability for taxes or license fees that can be reduced by the use of a credit must be computed one credit at a time before any other another credit is used to reduce any remaining tax or license fee liability under this chapter or Chapter 20 of this title. Subject to item (4), The taxpayer may apply any credits arising under this chapter or Chapter 14 of this title in any order the taxpayer elects, and may apply a credit that is allowed for use against both taxes and license fees in any order, unless otherwise specifically provided, and against either one or both taxes and license fees in any given year, subject to specific limitations in the applicable credit statute and this item.
(4) No credit amount may be used more than once
, and all credits must be used, to the extent possible in any given year, first by the company that earned them, and second against the tax which generated them. Unless otherwise provided by law, a tax credit administered by the department must be used to the extent possible in the year it is generated and cannot be refunded.
(5) As used in this section
(a) the term "controlled group of corporations" has the same meaning as provided under Section 1563 of the Internal Revenue Code without regard to Section 1563(a)(4), (b)(2)(A), only with respect to corporations which are in existence for less than one-half the number of days in the tax year referred to therein, and (b)(2)(C) and (D);
(b) the term 'tax credit' or 'credit' means a statutorily directed or authorized reduction in the tax liability made after any applicable tax rates are applied."
B. Section 12-6-3480 of the 1976 Code, as amended by this section, applies for taxable years beginning after 2003.
SECTION 9. A. Section 12-6-4910(1)(d) of the 1976 Code is amended to read:
"(d) a nonresident individual with South Carolina gross income greater than the personal exemption amount provided in Internal Revenue Code Section 151(d)."
B. Section 12-6-4910(1)(d) of the 1976 Code, as amended by this section, applies for taxable years beginning after 2004.
SECTION 10. A. Section 12-6-5020(F) of the 1976 Code is amended to read:
"(F) If a corporation which files or is required to file a consolidated return is entitled to one or more income tax credits, including the carryover of unused credits from prior years, the income tax credits
may must be determined on a consolidated basis. Limitations on credits which refer to the income or the income tax liability of a corporation are deemed to refer to the income or income tax liability of the consolidated group, and credits shall reduce the consolidated group's tax liability regardless of whether or not the corporation entitled to the credit contributed to the tax liability or of the consolidated group."
B. Section 12-6-5020(F), as amended by this section, applies for taxable years beginning after 2003.
SECTION 11. A. Section 12-6-5030 of the 1976 Code is amended to read:
"Section 12-6-5030. (A) A partnership or 'S' Corporation may file a composite individual income tax return on behalf of the nonresident partners or shareholders that are individuals,
or trusts, and or estates in which the income is taxed to the trust or estate, or the department may require that a partnership or 'S' Corporation file a composite individual income tax return on behalf of the nonresident partners or shareholders that are individuals, or trusts and estates in which the income is taxed to the trust or estate , provided that a nonresident partner or 'S' Corporation shareholder having taxable income within the jurisdiction of this State from sources other than the partnership or 'S' Corporation may not file as part of the composite return.
(B)(1) A composite return is
one which combines the separate South Carolina tax liabilities of the nonresident partners or shareholders and a single return for two or more taxpayers having the same tax year in which each participant's share of the partnerships or 'S' Corporation's taxable income or loss is separately computed and added together to arrive at the total tax due on the composite return. The partnership or 'S' Corporation may elect to determine each participant's tax due by one of the following methods:
(a) compute the pro rata share of the standard deduction or itemized deductions, and personal exemption amount for each participant pursuant to Section 12-6-1720(2) in the same manner as if it was being separately reported; or
(b) compute each participant's share of South Carolina income without regard to any deductions or exemptions.
(2) The composite return is signed by a general partner or an authorized officer of the 'S' Corporation.
If there is not sufficient information to determine the separate liability or the state of residence, then no deduction is allowed for personal exemptions, individual itemized deductions, or standard deductions.
(D)(1) A composite return may be filed even if some of the nonresident fiduciary and individual shareholders and partners eligible to participate in filing a composite return choose not to participate. Corporate taxpayers may not participate in a composite return.
(2) A nonresident participating in the composite return that has South Carolina income from sources other than the entity filing the composite return is required to file appropriate returns and make payment of all South Carolina taxes required by law. Taxes paid for the nonresident with the composite return shall reduce taxes due at the time the nonresident subject to this subitem files a separate return for the tax year reporting South Carolina income from all sources. The entity shall furnish to each nonresident a written statement as required by Section 12-8-1540(A) as proof of the amount that has been paid by the partnership or 'S' corporation as estimated payments for the nonresident and the amount paid for the nonresident with the composite return.
(E)(D) The department may establish procedures or promulgate rules and promulgate regulations necessary to carry out the provisions of this section."
B. Section 12-6-5030 of the 1976 Code, as amended by this section, applies for taxable years beginning after 2003.
SECTION 12. A. Subsections (A) and (D)(3) of Section 12-8-520 of the 1976 Code are amended to read:
"(A) An employer paying wages
at the rate of eight hundred dollars or more a year to an employee shall withhold income tax for that employee if at the time of payment the wages are expected to equal one thousand dollars or more during the year, except as provided in (C), using the tables and rules promulgated by the department.
(3) for personal services performed
on occasional, sporadic, or casual visits to in this State by nonresident employees in connection with their regular employment outside of this State ; when the gross South Carolina wages are equal to or less than the personal exemption amount provided in Internal Revenue Code Section 151(d) as defined in Section 12-6-40. However, this item does not apply to employees performing construction, installation, engineering, or similar services are considered to have earned wages in this State if where the situs of the job is in this State;"
B. Subsections (A) and (D)(3) of Section 12-8-520 of the 1976 Code, as amended by this section, apply for taxable years beginning after 2004.
SECTION 13. A. Section 12-8-1520(A)(2) of the 1976 Code is amended to read:
"(2) If a resident withholding agent is required under the Internal Revenue Code to deposit withheld funds at a financial institution, then the withholding agent shall deposit the funds required to be withheld under this chapter at a financial institution selected by the State Treasurer, unless otherwise instructed by the department."
B. Section 12-8-1520 of the 1976 Code is amended by adding at the end:
"(D) Any withholding agent making at least twenty-four payments in a year must do so as provided in Section 12-54-250."
C. Section 12-8-1520(A)(2) of the 1976 Code, as amended in subsection A of this section, takes effect July 1, 2004. The amendment to Section 12-8-1520 in the 1976 Code in subsection (B) of this section applies for payments due after January 1, 2005.
SECTION 14. Section 12-10-105 of the 1976 Code, as added by Act 334 of 2002, is amended to read:
"Section 12-10-105. In addition to the application fee provided in Section 12-10-100, an additional annual fee of one thousand dollars must be remitted by those qualifying businesses receiving in excess of ten thousand dollars of job development credits or in excess of ten thousand dollars in job retraining credits in one calendar year.
to the department The fee is due for each project that is subject to a revitalization or retraining agreement and must be remitted to the Department of Revenue to be used to reimburse the department of Revenue for costs incurred auditing reports required pursuant to Section 12-10-80(A)."
SECTION 15. A. Subsections (B)(1) and (C) of Section 12-20-105 of the 1976 Code, as last amended by Act 69 of 2003, are further amended to read:
"(1) To be considered an eligible project for purposes of this section, the project must qualify for income tax credits under Chapter 6 of Title 12, withholding tax credit under Chapter 10 of Title 12, income tax credits under Chapter 14 of Title 12, or fees in lieu of property taxes under either Chapter 12 of Title 4, Chapter 29 of Title 4,
Chapter 37 of Title 12, or Chapter 44 of Title 12.
(C) For the purpose of this section, 'infrastructure' means improvements for water, sewer, gas, steam, electric energy, and communication services made to a building or land that are considered necessary, suitable, or useful to an eligible project. These improvements include, but are not limited to:
(1) improvements to
both public or private water and sewer systems;
(2) improvements to
both public or private electric, natural gas, and telecommunications systems including, but not limited to, ones owned or leased by an electric cooperative, electric utility, or electric supplier, as defined in Chapter 27, Title 58;
(3) fixed transportation facilities including highway, road, rail, water, and air;
(4) for a qualifying project under subsection (B)(2), infrastructure improvements include industrial shell buildings and the purchase of land for an office, business, commercial, or industrial park which is owned or constructed by a county or political subdivision of this State."
B. Subsections (B)(1) and (C) of Section 12-20-105 of the 1976 Code, as amended by this section, apply for taxable years beginning after 2003.
SECTION 16. Section 12-21-1090 of the 1976 Code is amended to read:
"Section 12-21-1090. The department
shall may promulgate rules and regulations for the payment and collection of the taxes levied by this article. The administrative provisions of Section 12-21-2870, wherever applicable, are hereby adopted for the administration and enforcement of the provisions of this article."
SECTION 17. A. Section 12-21-6550 of the 1976 Code is amended to read:
"Section 12-21-6550. In order to obtain the amounts provided in Sections 12-21-6530 and 12-21-6540:
(A) The county or municipality in which the major tourism or recreation facility or major tourism or recreation area is located must file with the Department of Parks, Recreation and Tourism a certification application. The Department of Parks, Recreation and Tourism shall review the application for completeness and accuracy and if necessary contact the county or municipality for additional information. A separate certification application must be filed for each tourism or recreation facility located in a tourism or recreation area. The certification application must be filed within one year of the end of the investment period.
(B) When the application is complete, the Department of Parks, Recreation and Tourism shall forward the application on to the department. The department
must shall notify the county or the municipality, in writing, if the certification application has been approved.
(B)(C) A tourism or recreation facility for which a certification application has been filed must request a determination from the council as to the status of the tourism or recreation facility. The council must classify each tourism or recreation facility as a new tourism or recreation facility or an expansion to an existing tourism or recreation facility. If a tourism or recreation facility is classified as an expansion to an existing tourism or recreation facility, Section 12-21-6580 applies. The request for determination of classification must be included in the certification application. The department must forward a copy of the request to the council for its determination."
B. This section takes effect July 1, 2004.
SECTION 18. Subsections (C) and (F) of Section 12-28-1730 of the 1976 Code are amended to read:
The department shall impose a civil penalty on the operator of a vehicle of two hundred dollars for the initial occurrence in each calendar year of a violation of the prohibition of use of dyed motor fuel subject to the user fee on the public highways of this State. Each subsequent offense in a calendar year is subject to a civil penalty of five thousand dollars.
The department shall impose a civil penalty in an amount equivalent to that imposed by Section 6715 of the Internal Revenue Code on the operator of a vehicle who knowingly violates the prohibition on the sale or use of dyed fuel upon public highways of this State. The department shall impose a civil penalty in the amount of one thousand dollars or ten dollars for each gallon of dyed fuel involved, whichever is greater, on the operator of a highway vehicle that is licensed or required to be licensed pursuant to Section 56-3-110 who uses dyed fuel for the propulsion of that vehicle or who stores dyed fuel to be used for the propulsion of a highway vehicle, regardless of whether any of the dyed fuel is used for a nontaxable purpose, unless permitted to do so under federal law. For purposes of this penalty, operator means the registered owner of the highway vehicle."
SECTION 19. Section 12-36-530 of the 1976 Code is repealed.
SECTION 20. Section 12-36-1310(B) of the 1976 Code, as last amended by Act 334 of 2002, is further amended to read:
"(B) The use tax imposed by this article also applies to the:
(1) gross proceeds accruing or proceeding from the business of providing or furnishing
any a laundering, dry cleaning, dyeing, or pressing service, but does not apply to the gross proceeds derived from coin operated laundromats and dry cleaning machines;
(2) gross proceeds accruing or proceeding from the sale of electricity;
(3)(a) 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. Gross proceeds from the sale of prepaid wireless calling arrangements subject to tax at retail pursuant to item (5) of this subsection are not subject to tax pursuant to this item. Effective for bills rendered after August 1, 2002, 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;
(b)(i) for purposes of this item, a 'bundled transaction' means a transaction consisting of distinct and identifiable properties or services, which are sold for one nonitemized price but which are treated differently for tax purposes:
(ii) for bills rendered on or after January 1, 2004, that include telecommunications services in a bundled transaction, if the nonitemized price is attributable to properties or services that are taxable and nontaxable, the portion of the price attributable to any nontaxable property or service is subject to tax unless the provider can reasonably identify that portion from its books and records kept in the regular course of business for purposes other than sales taxes.
(4) fair market value of tangible personal property brought into this State, by the manufacturer thereof, for storage, use, or consumption in this State by the manufacturer.
(5) gross proceeds accruing or proceeding from the sale or recharge at retail for 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 21. A. Section 12-36-2510 of the 1976 Code is amended to read:
"Section 12-36-2510. (A)(1) Notwithstanding other provisions of this chapter,
when, in the opinion of the department, the nature of a taxpayers business renders it impracticable for the taxpayer to account for the sales or use taxes, as imposed by this chapter, at the time of purchase, the department may issue its certificate to the taxpayer authorizing the purchase at wholesale and the taxpayer is liable for the taxes imposed by this chapter with respect to the gross proceeds of sale, or sales price, of the property withdrawn, used or consumed by the taxpayer within this State. at its discretion, may issue or authorize for the efficient administration of the sales and use tax law any type of certificate allowing a taxpayer to purchase tangible personal property tax free and be liable for any taxes.
(2) In addition to any other type of certificate the department considers necessary to issue, the department may issue at its discretion:
(a) Direct Pay Certificate: a direct pay certificate allows its holder to make all purchases tax free and to report and pay directly to the department any taxes due. The holder of a direct pay certificate is liable for any taxes due. If an exemption or exclusion is not applicable, the tax is due upon the withdrawal, use, or consumption of the tangible personal property purchased with the certificate.
(b) Exemption Certificate: an exemption certificate, as opposed to allowing its holder to make all purchases tax free, allows its holder to make only certain purchases tax free such as machinery, electricity, or raw materials. The holder of an exemption certificate is liable for any taxes due. If an exemption or exclusion is not applicable, the tax is due upon purchase, or upon the withdrawal, use, or consumption of the tangible personal property purchased with the certificate if the application of the exemption or exclusion cannot be determined at the time of purchase.
(B) To reduce the complexity and administrative burden of transactions exempt from sales or use tax, the following provisions must be followed when a purchaser claims an exemption by use of an exemption certificate:
(1) the seller shall obtain at the time of the purchase any information determined necessary by the department, including the reason the purchaser is claiming a tax exemption or exclusion;
(2) the department, at its discretion, may utilize a system where the purchaser exempt from the payment of the tax is issued an identification number which must be presented to the seller at the time of the sale;
(3) the seller shall maintain proper records of exempt or excluded transactions and provide them to the department when requested and in the form requested by the department.
(C) A seller that complies with the provisions of this section is relieved from any tax otherwise applicable if it is determined that the purchaser improperly claimed an exemption or exclusion by use of a certificate, provided the seller fraudulently did not fail to collect or remit the tax, or both, or solicit a purchaser to participate in an unlawful claim of an exemption. The liability for any tax shifts to the purchaser who improperly claimed the exemption or exclusion by use of the certificate."
B. This section takes effect October 1, 2004.
SECTION 22. Items (5) and (8) of Section 12-37-220(B) of the 1976 Code are amended to read:
"(5) All property of the American Legion, the Veterans of Foreign Wars,
the Spanish American War Veterans, the Disabled American Veterans, and Fleet Reserve Association or any similar Veterans Organization chartered by the Congress of the United States, whether belonging to the department or to any of the Posts in this State when used exclusively for the purpose of such organization and not used for any purpose other than club rooms, offices, meeting places or other activities directly in keeping with the policy stated in the National Constitution of such organization, and such property is devoted entirely to its own uses and not held for 'pecuniary profit'. For the purposes of this item 'pecuniary profit' refers to income received from the sale of alcoholic beverages to persons other than bona fide members and their bona fide guests, or any income, any part of which inures to the benefit of any private individual. Where any structure or parcel of land is used partly for the purposes of such organization and partly for such pecuniary profits, the area for pecuniary profits shall be assessed separately and that portion shall be taxed.
(8) Properties of whatever nature or kind owned within the State and used or occupied by
the Palmetto Junior Homemakers Association, the New Homemakers of South Carolina, the South Carolina Association of Future Farmers of America and the New Farmers of South Carolina, so long as such properties are used exclusively to promote vocational education or agriculture, better business methods and more effective organization for farming or to encourage thrift or provide recreation for persons studying agriculture or home economics in the public schools."
SECTION 23. Section 12-37-290 of the 1976 Code is repealed.
SECTION 24. A. Section 12-54-25(C)(3) of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:
"(3) Interest on an overpayment is not allowed pursuant to this subsection if it is refunded:
(a) within seventy-five days after the last day prescribed for filing the tax return, without regard to an extension of time for filing, or within seventy-five days after the last day prescribed for paying the tax if no return is required;
(b) within seventy-five days after the return is filed, in the case of a return filed after the last date;
(c) within seventy-five days after the taxpayer files a claim for a credit or refund for the overpayment of tax for the period between the filing of the claim to the payment of the refund
. ; or
(d) from three years after the original due date of the return, or the last day prescribed for paying the tax if no return is required, until seventy-five days after:
(i) the taxpayer files a claim for refund which contains all of the information required by Chapter 60 of this title, including the amount of the refund, and
(ii) the right of the taxpayer to the refund is not contingent on any future events. The provision of this subitem does not extend the time limitations for filing a claim for refund in Section 12-54-85."
B. Section 12-54-25 (c)(3) of the 1976 Code, as amended by this section, is effective for claims for refund filed after 2004.
SECTION 25. A. Subsections (a) and (b) of Section 12-54-42 of the 1976 Code are amended to read:
An employer A person who fails to comply with the provisions of Section 12-8-1540, requiring the furnishing of a withholding statement to employees is subject to a penalty of not less than one hundred dollars nor more than one thousand dollars for each violation.
An employer A person who fails to comply with the provisions of Section 12-8-540(A)(1), requiring the filing of withholding statements with the department is subject to a penalty of not less than one hundred dollars nor more than two thousand dollars for each violation."
B. This section takes effect July 1, 2004.
SECTION 26. A. Section 12-54-43(I) of the 1976 Code is amended to read:
"(I) A person:
(1)(a) who files what purports to be a return of the tax imposed by a provision of law administered by the department but which:
(a)(i) does not contain information on which the substantial correctness of the tax liability may be judged; or
(b)(ii) contains information that on its face indicates the liability is substantially incorrect; and or
(b) who files a claim, a protest, or document, other than a return, that contains information that on its face indicates its position is substantially incorrect; and
(2) whose conduct is due to:
(a) a position which is frivolous or groundless; or
(b) a desire, which appears on the purported return, claim, protest, or document, to delay or impede the administration of state tax laws;
(3) is liable to a penalty of five hundred dollars for the first filing, twenty-five hundred dollars for the second filing, and five thousand dollars for each subsequent filing.
This penalty is These penalties are in addition to all other penalties provided by law."
B. Section 12-54-43 of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding an appropriately lettered subsection at the end to read:
"( ) If a purchaser uses a resale, wholesale, or an exemption certificate issued or authorized by the department to purchase tangible personal property tax free which the purchaser knows is not excluded or exempt from the tax under the provisions of Chapter 36 of this title, then the purchaser, in addition to any other penalties due under this title, is liable for a penalty of five percent of the amount of the tax if the failure is for not more than one month, with an additional five percent for each additional month or fraction of the month during which the failure continues, not exceeding fifty percent in the aggregate. The provisions of this section do not apply to direct pay certificates."
C. Section 12-54-43(I) of the 1976 Code, as amended by subsection A. of this section, takes effect October 1, 2004. Section 12-54-43 of the 1976 Code, as amended by subsection B. of this section, takes effect July 1, 2004.
SECTION 27. Section 12-54-90(A) of the 1976 Code is amended to read:
"(A) When a person fails, neglects, violates, or refuses to comply with a provision of law or regulation administered by the department, the department, in its discretion, may refuse to issue a license to a taxpayer and may revoke one or more licenses held by the taxpayer.
within ten days of notification in writing of the taxpayer's failure to comply. The notification may be served by certified mail or personally."
SECTION 28. A. Chapter 54, Title 12 of the 1976 Code is amended by adding:
"Section 12-54-123. A person in possession of property upon which a levy has been made who, upon demand by the department, surrenders the property to the department must not be held personally liable for any obligation or liability to the taxpayer and any other person with respect to the property that arises from the surrender or payment. If a person brings an action not allowed pursuant to this section in any court of this State, the court shall dismiss the case."
B. This section takes effect July 1, 2004.
SECTION 29. A. Section 12-54-210(A) of the 1976 Code is amended to read:
"(A) A person liable for a tax, license, fee, or surcharge administered by the department or for the filing of a return with the department, including information returns
, required by this title shall keep books, papers, memoranda, records, render statements, make returns, and comply with regulations as the department prescribes. Persons failing to comply with the provisions of this section must be penalized in an amount to be assessed by the department not to exceed five hundred one thousand dollars for the period covered by the return in addition to other penalties provided by law."
B. This section takes effect July 1, 2004.
SECTION 30. A. Items (11) and (12) of Section 12-54-240(B) of the 1976 Code are amended to read:
"(11) disclosure of information contained on a return to the South Carolina Employment Security
department Commission, Department of Revenue, or to the Department of the Treasury, Alcohol , and Tobacco Tax and Firearms Division Trade Bureau;
(12)(a) disclosure to any state agency, county auditor, or county assessor of whether a resident or nonresident tax return was filed by any particular taxpayer
(b) disclosure to any county auditor or county assessor of whether the four percent assessment pursuant to Section 12-43-220(c)(1) has been claimed by a taxpayer in any county."
B. Section 12-54-240(B) of the 1976 Code, as last amended by Act 69 of 2003, is further amended by deleting item (24) which reads:
"(24) disclosure of information pursuant to a subpoena issued by a federal grand jury or the State Grand Jury of South Carolina."
SECTION 31. Section 12-58-185(A) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(A) The department, in its discretion, may accept installment
payment payments for amounts due it 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. An extension pursuant to this section may be granted only beyond one year 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 32. A. Section 12-60-420 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-60-420. (A) If a division of the department makes a division decision or determines there is a deficiency in a state or local tax administered by the department, it may send by first class mail or deliver the division decision or the proposed assessment to the taxpayer. The division decision or the proposed assessment must explain the basis for the division decision or the proposed assessment and state that assessment will be made or the decision will become final unless the taxpayer protests the division decision or the proposed assessment as provided in Section 12-60-450.
(B) If the taxpayer fails to file a protest, the division decision or proposed assessment will become final and, if applicable, an assessment will be made for the amount of a proposed assessment. The department shall make available forms which taxpayers may use to protest the division decision or the proposed assessments. The division decision or the proposed assessment is effective if mailed to the taxpayer's last known address even if the taxpayer refuses or fails to take delivery, is deceased, or is under a legal disability, or, if a corporation, has terminated its existence. For a joint tax return or liability, one division decision or the proposed assessment may be mailed to both taxpayers unless the department has notice that the taxpayers have separate addresses in which event a duplicate original of the division decision or the proposed assessment must be sent to each taxpayer at his last known address."
B. This section takes effect January 1, 2004.
SECTION 33. Section 12-60-490 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-60-490. If a taxpayer is due a refund, the refund must be applied first against any amount of that same tax that is assessed and is currently due from the taxpayer. The remaining refund, if any, must then be applied against any other state taxes that have been assessed against the taxpayer and that are currently due, or offset as provided in
Article 3, Chapter 54 Chapter 56 of this title, or offset to collect a debt pursuant to Section 12-4-580, or both. If any excess remains, the taxpayer must be refunded the amount plus interest as determined in Section 12-54-25, or, at the taxpayer's request, it may be credited to future tax liabilities."
SECTION 34. A. Section 61-4-720 of the 1976 Code, as last amended by Act 76 of 2001, is further amended to read:
"Section 61-4-720. Notwithstanding any other provision of law, a licensed winery located in this State
which produces and sells only domestic wine as defined in Section 12-21-1010 is authorized to sell the domestic wine produced on its premises with an alcoholic content of sixteen percent or less on the winery premises and deliver or ship this wine to consumer homes in or outside the State. These domestic wineries are authorized to provide, with or without cost, wine taste samples to prospective customers."
B. This section takes effect July 1, 2004.
SECTION 35. A. Article 7, Chapter 4, Title 61 of the 1976 Code is amended by adding:
"Section 61-4-725. Notwithstanding any other provision of law, a licensed winery located in a county or municipality that has conducted a favorable referendum under the provisions of Section 61-6-2010, during those same hours authorized by permits issued under Section 61-6-2010, may sell, deliver, and permit the consumption of wine on the premises."
B. This section takes effect July 1, 2004.
SECTION 36. A. Section 61-4-730 of the 1976 Code, as added by Act 415 of 1996, is amended to read:
"Section 61-4-730. Permitted wineries
which produce and sell only domestic wine as defined in Section 12-21-1010 located in this State may sell the wine at retail, wholesale, or both, and deliver or ship the wine from the winery location to the purchaser in the State. Domestic Wine must be delivered between 7:00 a.m. and 7:00 p.m."
B. This section takes effect July 1, 2004.
SECTION 37. A. Section 61-4-747(C)(4) of the 1976 Code, as added by Act 40 of 2003, is amended to read:
"(4) annually, by
August thirty-first January twentieth of each year, pay to the department all sales taxes and excise taxes due on sales to residents of this State in the preceding calendar year, the amount of the taxes to be calculated as if the sale were in this State at the location where delivery is made;"
B. Section 61-4-747(C)(4) of the 1976 Code, as amended by this section, applies for reports due after 2004.
SECTION 38. Except where otherwise provided, this act takes effect upon approval by the Governor.
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