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COMMITTEE REPORT
April 19, 2005
H. 3301
Introduced by Reps. Vaughn, Cotty, Leach, Clyburn, Whipper, Pinson, Phillips, E.H. Pitts, Davenport, Chellis, Tripp, Townsend, Harrison, Viers, Haskins, Frye, Hamilton, Hardwick, Herbkersman, Loftis, M.A. Pitts, Sandifer, Sinclair, D.C. Smith, J.R. Smith, Stewart, Toole and Witherspoon
S. Printed 4/19/05--H.
Read the first time January 12, 2005.
To whom was referred a Bill (H. 3301) to amend Section 12-37-250, as amended, Code of Laws of South Carolina, 1976, relating to the fifty thousand dollar homestead exemption for the person over, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
ROBERT W. HARRELL, JR. for Committee.
REVENUE IMPACT 1/
This bill would increase state expenditures for the homestead exemption currently given to taxpayers 65 and over or those totally and permanently disabled or legally blind by $3,400,000 in FY 2006.
Explanation
Under current law taxpayers sixty-five and over or those totally and permanently disabled or legally blind receive an exemption of $50,000 of the fair market value of their home for property tax purposes. The state currently allocates approximately $172.4 million to fund this exemption. This bill will annually raise the homestead exemption amount in the same manner and by the same percentage that federal income tax brackets are adjusted to reflect increases in the consumer price index. We estimate this amount to be 2.5% a year. Raising the homestead exemption by 2.5% would increase the exemption amount from $50,000 to $51,250 in the first year. Raising the exemption from $50,000 to $51,250 would increase state expenditures for the homestead exemption currently given to taxpayers 65 and over or those totally and permanently disabled or legally blind by $3,400,000 in FY 2006.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact by the BEA, or Section 2-7-76 for a local revenue impact or Section 6-1-85(B) for an estimate of the shift in local property tax incidence by the Office of Economic Research.
TO AMEND SECTION 12-37-250, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE FIFTY THOUSAND DOLLAR HOMESTEAD EXEMPTION FOR THE PERSON OVER SIXTY-FIVE YEARS OF AGE AND DISABLED PERSONS, SO AS TO INDEX THE EXEMPTION AMOUNT TO INFLATION IN THE SAME MANNER AND BY THE SAME PERCENTAGE THAT FEDERAL INCOME TAX BRACKETS ARE ADJUSTED TO REFLECT INCREASES IN THE CONSUMER PRICE INDEX.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-37-250 of the 1976 Code, as last amended by Act 18 of 2001, is amended by adding a new paragraph at the end to read:
"( ) The exemption amount provided in this section must be cumulatively adjusted in the manner and by the percentage provided for the adjustment of income tax brackets, including the rounding amount, provided in Internal Revenue Code Section (1)(f) as that code is defined in Section 12-6-40(A). The Department of Revenue shall calculate the adjusted exemption amount and certify the amount to the Comptroller General and county auditors, and that amount, as adjusted, applies in lieu of the original or previously adjusted exemption amount for the succeeding property tax year."
SECTION 2. This act takes effect upon approval by the Governor, and the adjustment required by this act first applies for the homestead exemption amount applicable for property tax year 2005.
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