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Indicates New Matter
Sponsors: Senator Thomas
Document Path: l:\council\bills\ggs\22123htc05.doc
Companion/Similar bill(s): 783, 788, 880, 4359
Introduced in the Senate on April 27, 2005
Currently residing in the Senate Committee on Finance
Summary: Family Home and Business Protection Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 4/27/2005 Senate Introduced and read first time SJ-6 4/27/2005 Senate Referred to Committee on Finance SJ-6
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, TO ENACT THE SOUTH CAROLINA FAMILY HOME AND BUSINESS PROTECTION ACT BY ADDING ARTICLE 11 TO CHAPTER 36 OF TITLE 12 SO AS TO IMPOSE AN ADDITIONAL STATE SALES, USE, AND CASUAL EXCISE TAX EQUAL TO THREE PERCENT OF AMOUNTS SUBJECT TO THESE TAXES; TO AMEND SECTION 12-36-910, AS AMENDED, BY PROVIDING A SEPARATE STATE SALES AND USE TAX RATE EQUAL TO TWO PERCENT ON UNPREPARED FOOD WHICH LAWFULLY MAY BE PURCHASED WITH UNITED STATES DEPARTMENT OF AGRICULTURE FOOD COUPONS; BY ADDING SECTION 11-11-155 ESTABLISHING THE SCHOOL TAX MILLAGE EXEMPTION TRUST FUND IN THE STATE TREASURY TO RECEIVE THE REVENUES OF THE ADDITIONAL THREE PERCENT STATE SALES TAX AND BY ADDING SECTION 12-37-253 SO AS TO EXEMPT ALL FAIR MARKET VALUE OF OWNER-OCCUPIED RESIDENTIAL PROPERTY NOT ALREADY EXEMPTED FROM PROPERTY TAX FROM ALL REMAINING PROPERTY TAX IMPOSED FOR SCHOOLS, TO EXEMPT TWENTY PERCENT OF THE FAIR MARKET VALUE OF COMMERCIAL REAL PROPERTY FROM PROPERTY TAXES IMPOSED FOR SCHOOLS, TO PROVIDE FOR THE REIMBURSEMENT OF POLITICAL SUBDIVISIONS OF THE STATE AND SCHOOL DISTRICT FROM THE SCHOOL TAX MILLAGE EXEMPTION TRUST FUND FOR THE TAXES NOT COLLECTED BECAUSE OF THE EXEMPTIONS ADDED BY THIS SECTION, TO PROVIDE THAT ASSESSED VALUE OF PROPERTY EXEMPTED FROM TAX BY THIS SECTION IS CONSIDERED TAXABLE FOR PURPOSES OF COMPUTING BONDED INDEBTEDNESS AND THE INDEX OF TAXPAYING ABILITY, TO PROVIDE THAT PROPERTY TAX CREDITS ATTRIBUTABLE TO THE LOCAL OPTION SALES TAX IN EXCESS OF MUNICIPAL AND COUNTY PROPERTY TAX DUE ON COMMERCIAL REAL PROPERTY IS CONSIDERED A DISTRIBUTION TO THE MUNICIPALITY OR COUNTY AS APPLICABLE FROM THE COUNTY/MUNICIPAL REVENUE FUND, 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; AND BY REPEALING SECTION 12-37-223A, RELATING TO A LOCAL OPTION PROPERTY TAX EXEMPTION.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. This act may be cited as the South Carolina Family Home and Business Protection Act.
SECTION 2. 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 three percent is imposed on amounts taxable pursuant to this chapter, but this tax does not apply to amounts taxed pursuant to Section 12-36-920, the tax on accommodations for transients."
SECTION 3. Section 12-36-910 of the 1976 Code, as last amended by Act 69 of 2003, is further amended by adding a new subsection at the end to read:
"(D)(1) Notwithstanding the rate of the tax imposed pursuant to subsection (A) of this section or the rate of any other sales tax imposed pursuant to this chapter and the rate of any use tax imposed pursuant to this chapter, the sales and use tax on the gross proceeds of sales or sales price of unprepared food which lawfully can be purchased with United States Department of Agriculture food coupons is two percent.
(2) Notwithstanding any other provision of law providing for the use of sales and use tax revenues, an amount equal to twenty percent of the revenue of the sales and use tax imposed pursuant to this subsection; as estimated by the Board of Economic Advisors, must be credited to the Education Improvement Act Fund as provided in Section 59-21-1010(B)."
SECTION 4. 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 Millage Fund). The Board of Economic Advisors shall account for the School Millage 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 Millage Fund at the end of a fiscal year must remain in the School Millage Fund.
(C) Earnings on the School Millage Fund must be credited to the School Millage Fund.
(D) Nothing in this section prohibits appropriations by the General Assembly of additional revenues to the School Millage Fund."
SECTION 5. 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, in the case of real property classified pursuant to Section 12-43-220(c), any remaining fair market value otherwise subject to property tax is exempt from all property taxes imposed for schools, both operating millage and debt service millage.
(B) Twenty percent of the fair market value of real property classified pursuant to Section 12-43-220(e) is exempt from all property taxes imposed for schools, both operating millage and debt service millage.
(C) Political subdivisions and school districts must be reimbursed monthly from revenues credited to the School Millage Fund for a fiscal year for the taxes not collected because of the exemptions allowed by this section. Reimbursements must be paid in the manner that the Comptroller General determines appropriate, but such reimbursements must be paid not less than monthly.
(D) 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 and for purposes of computing the 'index of taxpaying ability' pursuant to Section 59-20-20(3).
(E) 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.
(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."
SECTION 6. 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 classified for purposes of the property tax pursuant to items (c) and (e) of Section 12-43-220.
(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 increases resulting from a change in classification or use of the real property; and
(2) taxes on real property transferred in the preceding property tax year.
(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."
B. Section 12-37-223A 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 property taxes for property tax years beginning after 2005.
SECTION 7. This act takes effect July 1, 2005, and the exemptions allowed pursuant to Section 12-37-253 as added by this act apply for property tax years beginning after 2004.
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