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S. 788
STATUS INFORMATION
General Bill
Sponsors: Senator Thomas
Document Path: l:\council\bills\ggs\22113htc05.doc
Companion/Similar bill(s): 783, 794, 880, 4359
Introduced in the Senate on April 26, 2005
Currently residing in the Senate Committee on Finance
Summary: State sales, use, and casual excise tax
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 4/26/2005 Senate Introduced and read first time SJ-5 4/26/2005 Senate Referred to Committee on Finance SJ-5
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 11, CHAPTER 36 OF TITLE 12 SO AS TO IMPOSE AN ADDITIONAL TWO PERCENT STATEWIDE SALES, USE AND CASUAL EXCISE TAX EQUAL TO TWO PERCENT GROSS PROCEEDS OF SALES, EXEMPTING FROM THIS ADDITIONAL TAX ITEMS OF PREPARED FOOD WHICH MAY BE PURCHASED WITH UNITED STATES DEPARTMENT OF AGRICULTURE FOOD COUPONS; BY ADDING SECTION 11-11-155 SO AS TO ESTABLISH A SEPARATE FUND IN THE STATE TREASURY STYLED THE SCHOOL TAX MILLAGE EXEMPTION TRUST FUND TO RECEIVE THE REVENUES OF THE SALES TAX ADDED BY THIS ACT; BY ADDING 12-37-253 SO AS TO EXEMPT OWNER-OCCUPIED RESIDENTIAL PROPERTY FROM PROPERTY TAXES IMPOSED FOR SCHOOL OPERATIONS AND TO REIMBURSE SCHOOL DISTRICTS FOR THE TAXES NOT COLLECTED BECAUSE OF THIS EXEMPTION FROM THE SCHOOL TAX MILLAGE TRUST FUND AND TO ALLOW A CREDIT AGAINST SCHOOL OPERATING TAXES FOR ALL OTHER REAL PROPERTY FROM REVENUES IN THE TRUST FUND IN EXCESS OF THE AMOUNT NECESSARY TO PAY THE EXEMPTION REIMBURSEMENT; BY ADDING SECTION 12-37-223 SO AS TO EXEMPT A SUFFICIENT AMOUNT OF FAIR MARKET VALUE OF ALL REAL PROPERTY IN A COUNTY SUFFICIENT TO LIMIT TO ONE PERCENT ANY ANNUAL INCREASE IN PROPERTY TAXES AND TO PROVIDE THOSE CIRCUMSTANCES IN WHICH THIS EXEMPTION DOES NOT APPLY; BY REPEALING SECTION 12-27-223A, RELATING TO A LOCAL OPTION PROPERTY TAX EXEMPTION; AND BY AMENDING SECTION 11-27-110, AS AMENDED, RELATING TO THE APPLICATION OF THE CONSTITUTIONAL LIMIT ON THE ISSUE OF BONDED INDEBTEDNESS WITHOUT A REFERENDUM, SO AS TO IMPUTE TO A SCHOOL DISTRICT DEBT INCURRED BY A PRIVATE ENTITY IN CONNECTION WITH THE DISTRICT ACQUIRING NEW OR RENOVATED FACILITIES BY MEANS OF A BEST PLAN.
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 12-36-1110. An additional sales, use, and casual excise tax equal to two percent is imposed on amounts taxable pursuant to this chapter, but this tax does not apply to unprepared food which lawfully may be purchased with United States Department of Agriculture food coupons."
SECTION 2. Chapter 11, Title 11 of the 1976 Code is amended by adding:
"Section 11-11-155. (A) For each fiscal year, the revenue from the tax imposed pursuant to Section 12-36-1110 is automatically credited to a fund separate and distinct from the state general fund known as the 'School Tax Millage Exemption Trust Fund' (the School Trust Fund). The Board of Economic Advisors shall account for the School Trust Fund revenue separately from general fund revenues in reports to the Governor and the General Assembly. No portion of these revenues is credited to the Education Improvement Act (EIA) Fund.
(B) An unexpended balance in the School Trust Fund at the end of a fiscal year must remain in the School Trust Fund.
(C) Earnings on the School Trust Fund must be credited to the School Trust Fund.
(D) Nothing in this section prohibits appropriations by the General Assembly of additional revenues to the School Trust Fund."
SECTION 3. Chapter 37 of Title 12 of the 1976 Code is amended by adding:
"Section 12-37-253. (A) After the exemption allowed pursuant to Section 12-37-250 and Section 12-37-251, for property classified for property tax purposes pursuant to Section 12-43-220(c), any remaining fair market value otherwise subject to tax is exempt from all school taxes except taxes:
(1) levied for bonded indebtedness for capital construction for schools; and
(2) levied to make payments pursuant to a lease purchase agreement or other financing instrument for capital construction for schools.
(B) School districts must be paid monthly from revenues credited to the School Trust Fund for a fiscal year in an amount equal to the taxes not collected because of the exemption allowed by this section. These reimbursements and the payments made to school districts pursuant to subsection (E) of this section are under the administration of the Comptroller General.
(C) Notwithstanding any other provision of law, property exempted from property taxation in the manner provided in this section is considered taxable property for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State.
(D) The exemption provided by this section applies for property taxes imposed by any property taxing entity if the revenues of taxes imposed by the entity are used directly or indirectly for school operations.
(E) Amounts in the School Trust Fund in excess of the amounts necessary to pay the reimbursements required pursuant to subsection (B) of this section must be distributed to school districts in the proportions that the assessed value of real property in the school district is of the total of such assessed value statewide. All real property not exempt from property tax millage pursuant to subsection (A) of this section is allowed a credit against those property taxes to which the exemption allowed pursuant to subsection (A) of this section calculated in the manner provided in Section 4-10-40(B), mutatis mutandis."
SECTION 4. A. Article 3, Chapter 37, Title 12 of the 1976 Code is amended by adding:
"Section 12-37-223. (A) For purposes of this section, 'real property' means all real property, however classified for purposes of the property tax.
(B) There is exempted annually from property tax an amount of fair market value of each parcel of real property located in the county sufficient to limit to one percent the increase in the total property tax due on that parcel of real property for the property tax year over the total property tax on that parcel for the prior property tax year. The exemption allowed by this section does not apply to:
(1) a tax increase resulting from value attributable to property or improvements not previously taxed, such as new construction, and for renovation of existing structures and tax increase resulting from a change in classification or use of the real property; and
(2) taxes on real property transferred after the year in which the most recent countywide equalization program was implemented pursuant to Section 12-43-217.
(C) Notwithstanding subsection (B)(2), the exemption provided in subsection (B) applies to real property which has been transferred in a transfer not subject to income tax pursuant to Sections 102 (Gifts and Inheritances), limited to transfers to a spouse or surviving spouse, 1033 (Conversions--Fire and Insurance Proceeds to Rebuild), 1041 (Transfers of Property Between Spouses or Incident to Divorce), 351 (Transfer to a Corporation Controlled by Transferor), 355 (Distribution by a Controlled Corporation), 368 (Corporate Reorganizations), or 721 (Nonrecognition of Gain or Loss on a Contribution to a Partnership) of the Internal Revenue Code, as defined in Section 12-6-40. The exemption provided in subsection (B) also continues to apply to real property which has been transferred if the transferor retains a life estate in the real property and the transferor continues to occupy the real property as his legal residence and to real property which has been transferred to a trust if the transferor is a life beneficiary of the trust and continues to occupy the real property as his legal residence.
(D) When real property is transferred such that the real property is no longer eligible for the exemption provided for in subsection (B), the real property is subject to being taxed in the tax year following the transfer at its value, as determined under Section 12-37-930, at current fair market value as determined by the county assessor.
(E) The closing attorney involved in a real estate transfer shall provide the following notice to the buyer or buyers:
REAL PROPERTY TRANSFERRED AS A RESULT OF THIS TRANSACTION MAY BE SUBJECT TO PROPERTY TAXATION DURING THE NEXT TAX YEAR AT A VALUE THAT REFLECTS ITS FAIR MARKET VALUE.
(F) In a county area in which is imposed the local option sales tax (LOST) pursuant to Article 1, Chapter 10 of Title 4 on or after July 1, 2005, where the credits allowed pursuant to that article exceed the property tax to which the credit applies, then the excess credit is deemed a distribution from the LOST County/Municipal Revenue Fund."
B. Section 12-27-223A of the 1976 Code is repealed.
C. Notwithstanding the general effective date of this act, this section takes effect upon approval of this act by the Governor and applies for values resulting from countywide assessment and equalization programs or otherwise implemented after 2004.
SECTION 5. Section 11-27-110 of the 1976 Code, as last amended by Act 89 of 1999, is further amended by adding a new subsection at the end to read:
"(E) When a school district acquires an asset using what is commonly referred to as a BEST plan, all debt incurred by the private entity in connection with the BEST Plan for that school district is imputed to the school district and must be added to the school district's limited bonded indebtedness for purposes of calculating the school district's total bonded indebtedness and the applicable referendum requirements."
SECTION 6. This act takes effect July 1, 2005, and for purposes of the tax exemption and tax credit allowed applies, for property tax years beginning after 2004.
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