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H. 4261
STATUS INFORMATION
General Bill
Sponsors: Reps. Toole, Bingham, E.H. Pitts and Haley
Document Path: l:\council\bills\ggs\22249htc05.doc
Introduced in the House on June 1, 2005
Currently residing in the House Committee on Ways and Means
Summary: Sales and use tax
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
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6/1/2005 House Introduced and read first time HJ-56
6/1/2005 House Referred to Committee on Ways and Means HJ-56
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 12 IN CHAPTER 36 OF TITLE 12 SO AS TO IMPOSE AN ADDITIONAL SALES AND USE TAX EQUAL TO ONE PERCENT AND TO REQUIRE THE REVENUE OF THIS TAX TO BE CREDITED TO A SEPARATE FUND IN THE STATE TREASURY THE PROCEEDS OF WHICH ARE USED TO REIMBURSE PROPERTY-TAXING ENTITIES FOR PROPERTY TAXES NOT COLLECTED AS A RESULT OF A PROPERTY TAX EXEMPTION FOR PRIVATE PASSENGER MOTOR VEHICLES AND MOTORCYCLES ALLOWED BY THIS ACT, TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO PROPERTY EXEMPT FROM PROPERTY TAX, SO AS TO EXEMPT PRIVATE PASSENGER MOTOR VEHICLES AND MOTORCYCLES FROM PROPERTY TAX, TO PROVIDE FOR THE REIMBURSEMENT OF PROPERTY-TAXING ENTITIES FOR THE PROPERTY TAX NOT COLLECTED BECAUSE OF THIS EXEMPTION; AND TO PROVIDE THAT THE FAIR MARKET VALUE OF PRIVATE PASSENGER MOTOR VEHICLES AND MOTORCYCLES IS NEVERTHELESS CONSIDERED TAXABLE FOR PURPOSES OF DETERMINING THE LIMIT ON BONDED INDEBTEDNESS AND THE INDEX OF TAXPAYING ABILITY, TO AMEND SECTIONS 4-10-520, 4-10-540, 4-10-550, AND 4-10-570, RELATING TO THE PURPOSE, IMPOSITION, REFERENDUM APPROVAL, AND REFERENDUM TO RESCIND WITH REGARD TO THE PERSONAL PROPERTY TAX EXEMPTION SALES TAX ACT, SO AS TO DELETE PROVISIONS FOR THE EXEMPTIONS FROM PROPERTY TAX FOR PRIVATE PASSENGER MOTOR VEHICLES AND MOTORCYCLES MADE OBSOLETE BY THE PROVISIONS OF THIS ACT AND TO REPEAL SECTION 12-37-2735, RELATING TO THE PERSONAL PROPERTY TAX RELIEF FUND.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 36, Title 12 of the 1976 Code is amended by adding:
Section 12-36-1210. An additional sales, use, and casual excise tax equal to one percent is imposed on amounts taxable pursuant to this chapter.
Section 12-36-1220. Notwithstanding any other provisions of law providing for the use of sales, use, and casual excise revenue, all revenue of the tax imposed pursuant to Section 12-36-1210 must be credited to a fund in the State Treasury separate and distinct from the general fund of the state and all other funds styled the Motor Vehicle Property Tax Relief Fund (MVPTRF). The Board of Economic Advisors shall account for the MVPTRF revenue separately from general fund revenues in reports to the Governor and the General Assembly. An undistributed balance in the MVPTRF at the end of a fiscal year must remain in the MVPTRF and earnings on the MVPTRF must be credited to it. Nothing in this section prohibits appropriations by the General Assembly of additional revenues to the MVPTRF."
SECTION 2. Section 12-37-220(B) of the 1976 Code is amended by adding an appropriately numbered item at the end to read:
"( )(a) To the extent not otherwise exempted pursuant to this section, one hundred percent of the fair market value of a private passenger motor vehicle assessed for property tax purposes pursuant to Article X, Section 1(8)(B)(1) of the Constitution of this State and one hundred percent of the fair market value of a motorcycle.
(b) Property taxing entities must be reimbursed for the property taxes not collected because of the exemption allowed by this item from the Motor Vehicle Property Tax Relief Fund established pursuant to Section 12-36-1220. The Comptroller General shall administer the payment of these reimbursements, which must be paid in advance and not less than monthly. If revenues in the Motor Vehicle Property Tax Relief Fund are insufficient to pay the full reimbursement, all reimbursements are proportionately decreased. If at the end of a fiscal year and following adjustments necessary to correct any misallocations of any balance remaining in the fund, that balance must be distributed proportionately to property-taxing entities.
(c) Notwithstanding any other provisions of law, property exempted from property tax pursuant to this item is considered taxable property for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State and for purposes of computing the 'index of taxpaying ability' pursuant to Section 59-20-20(3)."
SECTION 3. A. Section 4-10-520 of the 1976 Code, as added by Act 387 of 2000, is amended to read:
"Section 4-10-520. This article provides the only method in which the governing body of a county by ordinance may exempt private passenger motor vehicles, motorcycles, general aviation aircraft, boats, and boat motors from property taxes levied in the county as provided in Section 3, Article X of the Constitution of this State."
B. Section 4-10-540 of the 1976 Code, as added by Act 387 of 2000, is amended to read:
"Section 4-10-540. (A) Subject to the requirements of this article, the county council by ordinance may impose a sales and use tax in increments of one-tenth of one percent, not to exceed two percent, subject to referendum approval. The rate of the tax must be set at an amount expressed in tenths of one percent estimated to be sufficient to produce revenues that do not exceed those necessary to replace private passenger motor vehicle, motorcycle, general aviation aircraft, boat, and boat motor property tax revenue in the county in the most recently completed fiscal year, but in no case more than two percent. The county council must obtain from the Board of Economic Advisors the board's certified estimate of the rate of sales and use tax necessary in the county to equal property tax revenues derived from private passenger motor vehicles, motorcycles, general aviation aircraft, boats, and boat motors in the latest completed fiscal year. If this rate exceeds two percent, the maximum rate the board may certify is two percent. This certified rate is the rate of tax that must appear in the referendum question. If the revenue of a two percent tax does not at least equal the revenue not collected, then for the first year of implementation, the shortfall must be made up by a distribution to the county from the Trust Fund for Tax Relief, and this distribution is considered additional sales tax revenue pursuant to this article. Thereafter, this distribution must be adjusted by an amount equal to any increase in the consumer price index in the most recently completed calendar year, but in no case may this distribution result in a reimbursement to a county that exceeds the personal property tax revenue not collected because of the exemption allowed by this article.
(B) If the property tax assessment ratio applicable to private passenger motor vehicles and motorcycles is reduced, then for a county where the tax allowed by this article is imposed, the board shall certify a new tax rate applying the reduced assessment ratio to the assessed value of vehicles in the county in the most recently completed fiscal year, using the millage applicable for that fiscal year, and calculate a tax rate sufficient to produce that revenue in a fiscal year plus the revenue not collected because of the exemption for general aviation aircraft, boats, and boat motors from the original calculation, not to exceed two percent. This new rate applies effective beginning with the month the assessment ratio changes and continues to apply while that assessment ratio applies or until the tax is rescinded."
C. Subsections (C) and (D) of Section 4-10-550 of the 1976 Code, as added by Act 387 of 2000, are amended to read:
"(C) The referendum question to be on the ballot must read substantially as follows:
"Must a (rate) sales and use tax be imposed in (county) to replace property tax revenues not collected because of a one hundred percent property tax exemption for private passenger motor vehicles, motorcycles, general aviation aircraft, boats, and boat motors otherwise taxable in the county?
(D) All qualified electors desiring to vote in favor of imposing the tax shall vote "Yes" and all qualified electors opposed to imposing the tax shall vote "No". If a majority of the votes cast are in favor of imposing the tax, then the tax is imposed as provided in this article and beginning for motor vehicle tax years beginning on and after that date, and all other property tax years beginning after the year in which the referendum is held, all private passenger motor vehicles as defined in Section 56-3-630, motorcycles, general aviation aircraft, boats, and boat motors otherwise taxable in the county are exempt from property taxes levied in the county. The election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the result no later than December thirty-first to the county governing body and to the Department of Revenue."
D. Subsections (B) and (C) of Section 4-10-570 of the 1976 Code, as added by Act 387 of 2000, are amended to read:
"(B) The referendum question to be on the ballot must read substantially as follows:
"Must the (rate) sales and use tax imposed in (county) be rescinded with the revenue not collected replaced by extending the property tax to private passenger motor vehicles, motorcycles, general aviation aircraft, boats, and boat motors previously not subject to property tax in this county?
(C)(1) All qualified electors desiring to vote in favor of rescinding the tax shall vote "Yes" and all qualified electors opposed to rescinding the tax shall vote "No". If a majority of the votes cast are in favor of rescinding the tax, then the tax is rescinded effective July first following the referendum and property taxes apply to all private passenger motor vehicles, motorcycles, general aviation aircraft, boats, and boat motors taxable in the county for motor vehicle tax years beginning after June 30 following the referendum and other property tax years beginning after the year in which the referendum is held. The election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the result no later than December thirty-first to the county council. If a majority "Yes" vote is certified, it must be certified to the Department of Revenue by the same date.
(2) Upon receipt of the return of the referendum, the county council shall declare the results thereof by resolution. The results of the referendum may not be questioned except by a suit or proceeding instituted within thirty days from the date the resolution is adopted."
SECTION 4. Section 12-37-2735 of the 1976 Code is repealed.
SECTION 5. This act takes effect July 1, 2006, and the exemption allowed pursuant to the amendment to Section 12-37-220(B) of the 1976 Code contained in this act applies for vehicle property tax years beginning after June 30, 2006.
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