South Carolina General Assembly
115th Session, 2003-2004

Download This Version in Microsoft Word format

Bill 487


Indicates Matter Stricken
Indicates New Matter


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

A BILL

TO AMEND SECTION 12-36-90, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE SALES AND USE TAX ACT, SO AS TO EXCLUDE THE ENVIRONMENTAL SURCHARGE IMPOSED PURSUANT TO SECTION 44-56-430 FROM THE DEFINITION OF "GROSS PROCEEDS OF SALES"; TO AMEND SECTION 44-56-430, RELATING TO THE DRYCLEANING FACILITY RESTORATION TRUST FUND, SO AS TO PROVIDE FOR THE CALCULATION, ADMINISTRATION, COLLECTION, AND ENFORCEMENT OF THE ENVIRONMENTAL SURCHARGE; TO AMEND SECTION 44-56-470, RELATING TO THE ANNUAL REGISTRATION AND FEES FOR DRYCLEANING FACILITIES, SO AS TO PROVIDE FOR THE DEPARTMENT OF REVENUE'S RETENTION OF FUNDS FOR COSTS INCURRED TO COLLECT AND ENFORCE THE DRYCLEANING FACILITY RESTORATION TRUST FUND; TO AMEND SECTION 44-56-480, RELATING TO THE SURCHARGE ON PERCHLOROETHYLENE (TETRACHLOROETHYLENE) AND STODDARD SOLVENT, SO AS TO PROVIDE THAT THE DEPARTMENT OF REVENUE MUST ADMINISTER, COLLECT, AND ENFORCE THE SURCHARGE IN THE MANNER THAT SALES AND USE TAXES ARE ADMINISTERED, COLLECTED, AND ENFORCED UNDER CHAPTER 36 OF TITLE 12; AND TO AMEND SECTION 44-56-485, RELATING TO THE ELECTION TO PLACE A DRYCLEANING FACILITY UNDER THE PROVISIONS OF ARTICLE 4, CHAPTER 56 OF TITLE 44, SO AS TO ADD PROVISIONS PERTAINING TO THE EFFECT OF VOLUNTARY REGISTRATION ON A DRYCLEANING FACILITY'S LIABILITY FOR THE PAYMENT OF CERTAIN TAXES, FEES, PENALTIES, AND INTEREST.

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

SECTION    1.    Section 12-36-90(2) of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding a new subitem at the end to read:

"(j)    the environmental surcharge imposed pursuant to Section 44-56-430."

SECTION    2.    Section 44-56-430 of the 1976 Code is amended to read:

"Section 44-56-430.    (A)    If the State Treasurer determines that the fund is insolvent, an environmental surcharge equal to one-half percent of the gross proceeds of sales of dry cleaning must be levied on every owner, operator, or person participating in the fund at a rate of one-half percent on all gross sales engaged in the business of providing dry cleaning. The term gross proceeds of sales of dry cleaning is the gross proceeds of sales as defined in Section 12-36-90 if a dry cleaning solvent is used, but does not include any state or local sales and use taxes imposed on the sale. For purposes of this surcharge, sales of dry cleaning considered sales for resale under Chapter 36 of Title 12 are subject to the surcharge as provided in this section. Charges between related parties for sales of dry cleaning must be reasonable and supported by the books and records of both taxpayers. The surcharge is imposed for a minimum of one year. and is suspended when the State Treasurer determines that the fund is solvent. the one-half percent surcharge must be suspended.

(B)(1)    The initial surcharge imposed by this section is due and payable on the first twentieth day of the third month succeeding the month in which the charge is imposed. and must be paid Subsequent charges are due and payable on or before the twenty-first twentieth day of each month for the preceding month. The Department of Revenue may authorize the quarterly, semiannual, or annual payment of this surcharge. The surcharge must be reported on forms and in the manner prescribed in regulation determined by the Department of Revenue.

(2)    The Department of Revenue must administer, collect, and enforce the surcharge in the manner that the sales and use taxes are administered, collected, and enforced under Chapter 36 of Title 12, except that no timely payment discount or exemptions or exclusions are allowed. The provisions of Title 12 apply to the collection and enforcement of the surcharge by the Department of Revenue.

(3)    The Department of Revenue shall retain funds for the costs incurred to collect and enforce the fund. The proceeds of the surcharge, after deducting the administrative costs incurred by the Department of Revenue in administering, auditing, collecting, distributing, and enforcing the surcharge, must be remitted to the State Treasurer and credited to the fund and must be used as provided in Section 44-56-420. For the purposes of this section, the proceeds of the surcharge include all funds collected and received by the Department of Revenue including interest and penalties on delinquent surcharges.

(C) The Department of Revenue shall administer, collect, and enforce the surcharge imposed under this section pursuant to the procedures for administration, collection, and enforcement of the general stated sales tax imposed under Title 12, except as provided in this subsection. These procedures include, but are not limited to, those regarding the filing of consolidated returns, the granting of sale for resale exemptions, and the interest and penalties on delinquent taxes. The surcharge must not be included in the computation of estimated taxes, and the dealer's credit for collecting taxes or fees does not apply."

SECTION    3.    Section 44-56-470 of the 1976 Code is amended to read:

"Section 44-56-470.    (A)    For each drycleaning facility owned and in operation, the owner or operator of the facility or person shall register with and pay initial registration fees to the Department of Revenue by October 1, 1995, and pay annual or quarterly renewal registration fees as established by the department in regulation. The fee must be accompanied by a notarized certification from the owner, or operator, on a form provided by the department, certifying the number of employees employed by the owner, or operator, for the twelve-month period preceding payment of the fee.

(B)    An initial and annual registration fee for each drycleaning facility with:

(1)    up to four employees is seven hundred fifty dollars;

(2)    five to ten employees is one thousand five hundred dollars;

(3)    eleven or more employees is two thousand two hundred fifty dollars.

The fee must be paid within thirty days after receipt of billing by the department.

(C)    The provisions of Title 12 apply to the collection and enforcement of the fees by the Department of Revenue.

(D)    The Department of Revenue must retain funds for the costs incurred to collect and enforce the fund. The proceeds of the registration fee, after deducting the costs incurred by the Department of Revenue in auditing, collecting, distributing, and enforcing the registration fee, must be remitted to the State Treasurer and credited to the fund and must be used as provided in Section 44-56-420. For the purposes of this section, the proceeds of the registration fee include all funds collected and received by the Department of Revenue including interest and penalties on delinquent fees.

(C)(E)    Revenue derived from the registration fees must be submitted to the State Treasurer and credited to the Drycleaning Facility Restoration Trust Fund.

(D)(F)    Before July 1, 2002, an owner or operator of a drycleaning facility or person shall receive certification from the International Fabricare Institute, the Neighborhood Cleaners Association, or some other comparable nationally recognized drycleaning industry association certifying that the operator has demonstrated a level of competency to operate a drycleaning facility in accordance with the highest standards of the drycleaning industry.

(E)(G)    Before January 1, 2002, an owner or operator of a drycleaning facility in operation before July 1, 2000, shall install dikes or other containment structures around each machine or item of equipment in which drycleaning solvents are used and around an area in which solvents or waste containing solvents are stored. The containment must meet the following criteria:

(1)    the dikes or containment structures must be capable of containing one-third of the capacity of the total tank capacity of each machine;

(2)    dikes or containment structures around areas used for storage of solvents or waste containing solvents must be capable of containing one hundred percent of the volume of the largest container stored or retained in the containment structure;

(3)    all diked containment areas must be sealed or otherwise made impervious to the drycleaning solvents in use at the facility, including floor surfaces, floor drains, floor joints, and inner dike walls;

(4)    to the extent practicable, an owner of a drycleaning facility or person shall seal or otherwise render impervious those portions of all floor surfaces upon which any drycleaning solvents may leak, spill, or otherwise be released;

(5)    containment devices must provide for the temporary containment of accidental spills or leaks until appropriate response actions are taken by the owner/operator to abate the source of the spill and remove the product from all areas on which the product has accumulated; and

(6)    materials used in constructing the containment structure or sealing the floors must be capable of withstanding permeation by drycleaning solvents in use at the facility for not less than seventy-two hours.

(F)(H)    For drycleaning facilities that commence operating on or after July 1, 2000, the owners or operators of these facilities or persons, before the commencement of operations, shall install beneath each machine or item of equipment in which drycleaning solvents are used a rigid and impermeable containment vessel capable of containing one hundred percent of the volume of the largest single tank in the machine or piece of equipment or one-third of the total tank capacity of each machine, whichever is greater. Dikes or containment structures must be installed before delivery of any drycleaning solvents to the facility. All dikes or containment structures shall meet all criteria of Section 44-56-470(E)(G).

(G)(I)    A person or the owner or operator of a drycleaning facility or wholesale supply facility at which there is a spill of more than the federally mandated reportable quantity of drycleaning solvent outside of a containment structure, after July 1, 1995, shall report the spill to the department immediately upon the discovery of the spill and comply with existing emergency response regulations.

(H)(J)    Failure to comply with the requirements of this section constitutes gross negligence with regard to determining site eligibility."

SECTION    4.    Section 44-56-480 of the 1976 Code is amended to read:

"Section 44-56-480.    (A)    Beginning July 1, 1995, an environmental surcharge is assessed on the privilege of producing in, importing into, or causing to be imported into the State perchloroethylene (tetrachloroethylene) and Stoddard solvent. A surcharge of ten dollars per gallon on perchloroethylene and two dollars per gallon on Stoddard solvent is levied on each gallon to be used for drycleaning purposes when first imported into or produced in the State. A drycleaning facility not subject to this article pursuant to Section 44-56-485 may request a statement of nonparticipation from the department so as to demonstrate its status under this article and its exemption from the surcharge provided for in this subsection.

(B)    A person producing in, importing into, or causing to be imported into this State perchloroethylene and Stoddard solvent for sale, use, or otherwise must register with the Department of Revenue and become licensed for the purposes of remitting the surcharge pursuant to this section. The person must register as a producer or importer of perchloroethylene or Stoddard solvent. Persons operating at more than one location only are required to have a single registration. The fee for registration is thirty dollars. Failure to timely register is a misdemeanor and, upon conviction, the person must be fined up to one thousand dollars or imprisoned up to thirty days.

(C)    The surcharge imposed by this section is due and payable on the first or before the twentieth day of the month succeeding the month of production, importation, or removal from a storage facility and must be paid on or before the twentieth day of the month. The surcharge must be reported on forms and in the manner prescribed determined by the Department of Revenue by regulation.

(D)    An owner, operator, or person subject to the surcharge under this section or a person who sells surcharge-paid perchloroethylene or Stoddard solvent, other than a retail dealer, must separately state the amount of the surcharge paid on a charge ticket, sales slip, invoice, or other tangible evidence of the sale or must certify on the sales document that the surcharge required pursuant to this section has been paid.

(E)    All perchloroethylene and Stoddard solvent to be used for drycleaning purposes which are imported, produced, or sold in this State are presumed to be subject to the surcharge imposed by this section. An owner, operator, or person, except the final retail consumer, who has purchased perchloroethylene or Stoddard solvent for use in drycleaning for sale, use, consumption, or distribution in this State must document that the surcharge imposed by this section has been paid or must register and pay the surcharge directly to the Department of Revenue in accordance with subsection (C).

(F)    The surcharge imposed by this section must be remitted to the Department of Revenue. The payment must be accompanied by the forms as the Department of Revenue prescribes. The proceeds of the surcharge, after deducting the administrative costs incurred by the Department of Revenue in administering, auditing, collecting, distributing, and enforcing the surcharge, must be remitted by the Department of Revenue to the State Treasurer to be credited to the Drycleaning Facility Restoration Trust Fund and must be used as provided in Section 44-56-420. For the purposes of this section, the proceeds of the surcharge include all funds collected and received by the Department of Revenue, including interest and penalties on delinquent surcharges.

(G)    The Department of Revenue shall administer, collect, and enforce the surcharge authorized under this section pursuant to the same procedures used in the administration, collection, and enforcement of the general state sales tax imposed under Title 12 except as provided in this section in the manner that sales and use taxes are administered, collected, and enforced under Chapter 36 of Title 12, except no timely payment discount or exemptions or exclusions are allowed. Provisions of Title 12 regarding the department's Department of Revenue's authority to audit and make assessments, the keeping of books and records, and interest and penalties on delinquent taxes apply. The surcharge may not be included in the computation of estimated taxes nor does the dealer's credit for collecting taxes or fees apply to the surcharge.

(H)    The Department of Revenue shall retain funds for the incremental cost to administer the program. The Department of Revenue may promulgate regulations and may prescribe and publish forms as may be necessary to effectuate the purposes of this section. The Department of Revenue must retain funds for the costs incurred to administer, collect, and enforce the program. The proceeds of the surcharge, after deducting the costs incurred by the Department of Revenue in administering, auditing, collecting, distributing, and enforcing the surcharge, must be remitted to the State Treasurer and credited to the fund and must be used as provided in Section 44-56-420. For the purposes of this section, the proceeds of the surcharge include interest and penalties collected by the Department of Revenue.

(I)    The Department of Revenue may establish audit procedures and assess delinquent surcharges.

(J)    Perchloroethylene and Stoddard solvent used for drycleaning exported from the first storage facility at which it is held in this State by the producer or importer is exempt from the surcharge pursuant to this section. .Anyone exporting perchloroethylene or Stoddard solvent on which the surcharge has been paid may apply for a refund or credit. The Department of Revenue may require information as it considers necessary in order to approve the refund or credit.

(K)    The Department of Revenue may authorize:

(1)    a quarterly return and payment when the surcharge remitted by the licensee for the preceding quarter did not exceed one hundred dollars;

(2)    a semiannual return and payment when the surcharge remitted by the licensee for the preceding six months did not exceed two hundred dollars;

(3)    an annual return and payment when the surcharge remitted by the licensee for the preceding twelve months did not exceed four hundred dollars."

SECTION    5.    Section 44-56-485 of the 1976 Code is amended by adding new subsections at the end to read:

"(C)    Notwithstanding subsections (A) and (B) of this section, if a person or an owner or operator of a drycleaning facility in existence on July 1, 1995, has made an election not to place a facility under the provisions of this article as allowed in subsection (A) or (B) above, then the person, owner, or operator may affirmatively and irrevocably elect to place the drycleaning facility under the provisions of this article. This election must be made by registering with the Department of Revenue on or before July 1, 2004 and paying the fees and taxes provided under this article. An electing drycleaning facility is liable for payment of all taxes and fees from the later of July 1, 1995, or the date the drycleaning facility began operating, but is not liable for any penalties or interest.

(D)    Notwithstanding any other provision of this article, any person or owner or operator of a drycleaning facility that has not registered with the Department of Revenue and complied with the provisions of this article may voluntarily register with the Department of Revenue on or before July 1, 2004, without incurring any penalties or interest. Payment of all taxes and fees due pursuant to this article is required to be made from the later of July 1, 1995, or the date the drycleaning facility began operating. Any person or owner or operator of a drycleaning facility that does not voluntarily register under this provision is subject to interest, penalties, and payment of all taxes and fees from the later of July 1, 1995, or the date the drycleaning facility began operating. No fees will be prorated or refunded for a business in operation for less than twelve months.

(E)    Notwithstanding any other provisions in this article, the department may direct the Department of Revenue to allow a person or owner or operator of a drycleaning facility, who elected not to place the facility under this article pursuant to subsection (A) or (B) of this section to register, provided the department finds that the person or owner or operator of the drycleaning facility requesting to register did not have notice of this article for more than ninety days prior to requesting registration. The person or owner or operator of a drycleaning facility registering pursuant to this subsection is liable for payment of all taxes or fees, including interest, from the later of July 1, 1995, or the date the drycleaning facility began operating; however, the registering person, owner or operator is not liable for penalties. No fees will be prorated or refunded for a business in operation for less than twelve months."

SECTION    6.    This act takes effect upon approval by the Governor. The repeal or amendment of a code section by this act does not release or extinguish any tax, fee, interest, penalty, forfeiture, or liability for any period prior to the repeal or amendment. The repealed or amended code section or act must be treated as remaining in force for the purpose of sustaining any proper action or prosecution for the enforcement of the tax, fee, interest, penalty, forfeiture, or liability.

----XX----

This web page was last updated on Thursday, June 25, 2009 at 9:58 A.M.