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COMMITTEE REPORT
April 13, 2005
H. 3767
S. Printed 4/13/05--H.
Read the first time March 15, 2005.
To whom was referred a Bill (H. 3767) to amend Section 12-2-75, as amended, Code of Laws of South Carolina, 1976, relating to signatories to tax returns, so as to authorize a, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass with amendment:
Amend the bill, as and if amended, by adding appropriately numbered SECTIONS to read:
/ SECTION __. A. Chapter 58 of Title 12 of the 1976 Code is amended by adding:
"Section 12-58-190. (A) An officer or employee of the department may not deny a refund or delay the issuance of the department's order to the State Treasurer to pay a refund that has been determined to be due because the department is auditing or planning an audit of the taxpayer for a different tax or different tax period. This subsection does not prevent the issuance of an assessment, including a jeopardy assessment, pursuant to the Revenue Procedures Act.
(B) A person violating subsection (A) is subject to disciplinary action in accordance with the department's procedure, including dismissal from office of discharge from employment."
B. Section 12-58-170 of the 1976 Code is repealed.
SECTION __. A. Section 12-54-43 of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding at the end:
"(L) If a taxpayer asserts a value for property used in, or owned by, a business for property tax purposes that is fifty percent or more below the property's property tax value, there must be added to the tax an amount equal to the fifty percent of the underpayment which would have resulted if the value asserted had been accepted."
B. This SECTION takes effect upon approval by the Governor and is applicable for tax years beginning after December 31, 2005.
SECTION __. A. Chapter 35, Title 11 of the 1976 Code is amended by adding:
Section 11-35-5510. (A) A governmental body or political subdivision may not contract to purchase tangible personal property, and a person may not contract to sell tangible personal property to a governmental body or political subdivision unless, before or upon entering into the contract, and during the term of the contract, the person contracting to sell the tangible personal property is licensed with the South Carolina Department of Revenue and agrees to remit sales and use tax pursuant to Chapter 36 of Title 12. The provisions of this section apply to all sellers, including nonresident sellers who may not be legally obligated to collect and remit the sales and use tax.
(B) The licensing requirement of subsection (A) does not apply:
(1) if all sales of tangible personal property by the person to governmental bodies, political subdivisions, or residents or businesses in this state are exempt from the sales and use tax pursuant to Section 12-36-2120; or,
(2) to an affiliate of the person contracting with a governmental body or political subdivision if that affiliate is not selling tangible personal property to a governmental body, political subdivision, or a resident or business in this state.
(C) The provisions of this section do not apply:
(1) if the State Budget and Control Board finds that it is in the best interest of the State not to enforce the provisions of this section with respect to a specific contract; or
(2) if the Governor, after declaring a state of emergency, finds that it is in the best interest of the State not to enforce the provisions of this section in order directly to provide timely assistance with respect to the declared emergency.
(D) As used in this section:
(1) 'person' has the meaning provided in Section 12-36-30 and includes every affiliate of the person contracting with a governmental body or political subdivision;
(2) 'affiliate' includes any person that bears a relationship, as set forth in Internal Revenue Code Section 267, to the person entering into a contract, or under contract, with the governmental body or political subdivision; and,
(3) 'tangible personal property' has the meaning provided in Section 12-36-60.
(E) The State Budget and Control Board shall enforce the provisions of this section and may require governmental bodies and political subdivisions to incorporate within all contracts to purchase tangible personal property penalties that must be imposed upon the person contracting with the governmental body or political subdivision for failure to comply with this section.
(F) Failure of the person contracting with a governmental body or political subdivision to comply with the provisions of this section allows the governmental body or political subdivision, at its discretion, immediately to void the contract, and impose any penalties established under this chapter or by contract for failure of the person to comply with the law. Any penalties imposed pursuant to this section must not be passed on to the governmental body or political subdivision."
B. This SECTION takes effect upon approval by the Governor and applies for procurements beginning on or after that date.
SECTION __. Section 6-32-40(C)(3) of the 1976 Code, as added by Act 227 of 2004, is amended to read:
"(3) The credit earned pursuant to this subsection by a general partnership, limited partnership, limited liability company, or any other entity taxed as a partnership pursuant to Subchapter K of the Internal Revenue Code must be passed through to its partners and may be allocated among any of its partners, including without limitation, an allocation of the entire credit to one partner, in a any manner agreed by the partners that is consistent with Subchapter K of the Internal Revenue Code. As used in this subsection, the term 'partner' means a partner, member, or owner of an interest in the pass through entity, as applicable."
SECTION __. Section 30-9-30(B)(1) and (2) of the 1976 Code, as added by Act 385 of 1998, are amended to read:
"(1) If a person presents a conveyance, mortgage, judgment, lien, contract, or other document to the clerk of court or the register of deeds for filing or recording, the clerk of court or the register of deeds may refuse to accept the document for filing or recording if he reasonably believes that the conveyance, mortgage, judgment, lien, contract, or other document is materially false or fraudulent or is a sham legal process. However, if the person presenting the conveyance, mortgage, judgment, lien, contract, or other document to the clerk of court or the register of deeds resubmits the document within ten business days after the refusal with a sworn, written affidavit asserting the validity of the document and establishing the identity, mailing address, and phone number of all parties connected to the document, the clerk of court or register of deeds must accept the document for filing. Within thirty days of a written notice of such refusal, the person presenting the document may commence a suit in a state court of competent jurisdiction requiring the clerk of court or the register of deeds to accept the document for filing.
(2) If the clerk of court or the register of deeds reasonably believes that a conveyance, mortgage, judgment, lien, contract, or other document is materially false or fraudulent, or is a sham legal process, or was not issued by a court of competent jurisdiction or appropriate government entity, the clerk of court or the register of deeds may remove the conveyance, mortgage, judgment, lien, contract, or other document from the public records after mailing giving thirty days written notice to the person on whose behalf the document was filed at the return address provided in the document and allowing at least ten business days for a response through the form of a sworn, written affidavit asserting the validity of the document and establishing the identity, mailing address, and phone number of all parties connected to the document. If a sworn, written affidavit is received by the clerk of court or register of deeds from the person on whose behalf the document was filed, the conveyance, mortgage, judgment, lien, contract, or other document must be accepted for filing. Within thirty days written notice of the proposed removal, the person providing the notice may commence a suit in a state court of competent jurisdiction preventing the clerk of court or the register of deeds from removing the document."
SECTION __. A. Section 12-36-90(1)(c)(iii) of the 1976 Code is amended to read:
"(iii) tangible personal property replacing defective parts under written warranty contracts if:
(A) the warranty, maintenance, service, or similar contract is given without charge, at the time of original purchase of the defective property, or the tax was paid on the sale or renewal of warranty, maintenance, or similar service contract for tangible personal property of which the defective part was a component, whether or not such contract was purchased in conjunction with the sale of tangible personal property,
(B) in the case of a warranty, maintenance, service, or similar contract that is given without charge at the time of original purchase of the defective property, the tax was paid on the sale of the defective part or on the sale of the property of which the defective part was a component, and
(C) the warrantee is not charged for any labor or materials,"
B. Section 12-36-910(B) of the 1976 Code, as last amended by Act 69 of 2003, is further amended by adding an appropriately numbered item at the end to read:
"( ) gross proceeds accruing or proceeding from the sale or renewal of warranty, maintenance, or similar service contracts for tangible property, whether or not such contracts are purchased in conjunction with the sale of tangible personal property."
C. Section 12-36-1310(B) of the 1976 Code, as last amended by Act 334 of 2002, is further amended by adding an appropriately numbered item at the end to read:
"( ) gross proceeds accruing or proceeding from the sale or renewal of warranty, maintenance, or similar service contracts for tangible personal property, whether or not such contracts are purchased in conjunction with the sale of tangible personal property."
D. This SECTION takes effect the first day of the fourth month after the approval of the Governor.
SECTION __. A. Section 12-54-250 of the 1976 Code, as last amended by Act 363 of 2002, is further amended by adding at the end:
"(F)(1) A tax return preparer who prepares one hundred or more returns for a tax period for the same tax year shall submit all returns and make all payments associated with those returns by electronic means where electronic means are available. Where electronic means are not available to file the return, but 2D barcode is available, the preparer must use 2D barcode. If a taxpayer submits a written request to the preparer that states a reason for his return to be filed by another means, the preparer may submit that return by another means. Preparers shall maintain these requests for the same period as they shall retain the return and submit copies to the department upon request.
(2) The department shall include a notice of this requirement in its form instructions and in the forms area of its website.
(3) For the purposes of this subsection, tax return preparer means the business entity and not the individual location or individual completing the return.
(4) If compliance with this section is a substantial financial hardship, a tax return preparer may apply in writing to the department to be exempted from these requirements. The department may grant an exemption for no more than one year at a time.
(5) A person who fails to comply with the provisions of this section must be penalized in an amount to be assessed by the department equal to fifty dollars for each return."
B. This SECTION takes effect upon approval by the Governor for tax years beginning on or after January 1, 2006.
SECTION __. A. Section 12-6-5060 of the 1976 Code, as last amended by Act 308 of 2004, is further amended to read:
"Section 12-6-5060. (A) Each taxpayer required to file a state individual income tax return may contribute to the War Between the States Heritage Trust Fund established pursuant to Section 51-18-115, the Nongame Wildlife and Natural Areas Program Fund, the Children's Trust Fund of South Carolina established pursuant to Section 20-7-5010, the Eldercare Trust Fund of South Carolina established pursuant to Section 43-21-160, the First Steps to School Readiness Fund established pursuant to Section 20-7-9740, or the South Carolina Military Family Relief Fund established pursuant to Article 3, Chapter 11 of Title 25, the Gift of Life Trust Fund of South Carolina established pursuant to Section 44-43-1310, the Veterans' Trust Fund of South Carolina established pursuant to Chapter 21 of Title 25, the South Carolina Litter Control Enforcement Program (SCLCEP) and used by the Governor's Task Force on Litter only for the SCLCEP program, the South Carolina Law Enforcement Assistance Program (SCLEAP) and used as provided in Section 23-3-65, or the South Carolina Department of Parks, Recreation, and Tourism for use in the South Carolina State Park Service in the manner the General Assembly provides, or the South Carolina Military Family Relief Fund established pursuant to Article 3, Chapter 11 of Title 12, by designating the contribution on the return. The contribution may be made by reducing the income tax refund or by remitting additional payment by the amount designated.
(B) All South Carolina individual income tax return forms must contain a designation for the above contributions. The instructions accompanying the income tax form must contain a description of the purposes for which the funds were established and the use of monies from the income tax contribution.
(C) The department shall determine and report at least annually to the appropriate agency administering the fund or in the case of the Children's Trust Fund to the fund the total amount of contributions designated to the above funds. The department shall transfer the appropriate amount to each fund at the earliest possible time. The incremental cost of administration of the contribution must be paid out of retained by the department from the contributions before any funds are expended as provided in this section.
(D) The Department of Natural Resources shall make a report to the General Assembly as early in January of each year as may be practicable, which must include the amount of revenue produced by the contributions and a detailed accounting of expenditures from the Nongame Wildlife and Natural Areas Fund.
(E) For purposes of this section, the South Carolina Department of Revenue is not subject to provisions of the South Carolina Solicitation of Charitable Funds Act as contained in Chapter 56, Title 33.
(F) Revenues from the South Carolina Litter Control Enforcement Program Fund and the South Carolina Law Enforcement Assistance Program Fund carry forward into succeeding fiscal years and earnings of the funds must be credited to them."
B. Sections 12-6-5065, 12-6-5070, 12-6-5080, 12-6-5085, and 12-6-5090 are repealed.
SECTION __. A. Section 12-6-1130 of the 1976 Code, as last amended by Act 363 of 2002, is further amended by adding appropriately numbered items at the end to read:
"( )(a) A deduction is not allowed a person for the accrual of an expense or interest if the payee is a related person and the payment is not made in the taxable year of accrual or before the payer's income tax return is due, without regard to extensions, for the taxable year of accrual. Except as provided in subitem (b), deductions disallowed pursuant to this section are allowed when the payment is made. The holder shall include the payment in income in the year the debtor is entitled to take the deduction. This section does not apply to payments deemed to be made by the application of South Carolina's adoption of Internal Revenue Code section 482, 7872, a similar provision of the Internal Revenue Code or state law.
(b) Notwithstanding subitem (a), an interest deduction is not allowed for the accrual or payment of interest on obligations issued as a dividend or paid instead of paying a dividend. This interest must be treated as a dividend to the debtor's shareholders when it is paid, and if the holder of the obligation is not a shareholder at that time, a payment from the shareholders to the holder at that time.
(c) For purposes of this item, a related person includes a person that bears a relationship to the taxpayer as described in Section 267 of the Internal Revenue Code.
( ) The dividend distribution deduction allowed pursuant to Internal Revenue Code Section 857 or otherwise deductible pursuant to IRC Section 858 or 860 is modified as follows:
(a) A dividend distribution deduction is allowed only for dividends paid by a publicly traded REIT. A qualified REIT subsidiary is allowed a dividend distribution deduction if its owner is a publicly traded REIT.
(b) Income generated from real estate contributed or sold to a REIT by a shareholder or related party may not give rise to a dividend distribution deduction, unless the shareholder or related party would have received the dividend distribution deduction pursuant to this chapter.
(c) A corporation receiving a dividend from a REIT is not allowed the dividends received deduction pursuant to Section 243 of the Internal Revenue Code.
(d) Any REIT not allowed the dividend distribution deduction pursuant to the federal Internal Revenue Code is not allowed a dividend distribution deduction pursuant to this chapter.
(e) For purposes of this item, a related party includes a person who bears a relationship to the taxpayer as provided in Section 267 of the Internal Revenue Code."
B. This SECTION takes effect upon approval by the Governor and applies to taxable years beginning after 2005.
SECTION __. A.1. Chapter 2, Title 61 of the 1976 Code is amended by adding:
"Section 61-2-136. Notwithstanding another provision of law, a currently licensed beer and wine wholesaler or currently licensed alcoholic liquor wholesaler who wishes to relocate the licensed business to a new location within the State must notify the department. This notice must be in writing, must precisely describe the premises to be licensed, must give the date of the move, and must be filed with the department at least thirty days prior to the move. Upon receipt of this notice, the department shall transfer the permit to the new premises effective on the date of the move."
2. This section takes effect on the first day of the third month following approval by the Governor.
B. Section 61-2-100 of the 1976 Code, as last amended by Act 442 of 1998, is further amended by adding appropriately numbered subsections at the end to read:
"(I) The department may not issue a wholesale beer and wine permit pursuant to this title unless the applicant is a legal resident of the United States, and has been a legal resident of this State and has maintained his principal place of abode in this State for at least thirty days before the date of the application.
(J) A misstatement or concealment of fact on an application for a license or permit pursuant to this title is sufficient grounds for the department to deny the application and to revoke a license or permit issued based on an application containing a misstatement or concealment of fact."
C. Section 61-2-160 of the 1976 Code, as last amended by Act 415 of 1996, is further amended to read:
"Section 61-2-160. No A license or permit under pursuant to the provisions of this title may must not be issued, renewed, or transferred unless the department and the Internal Revenue Service determine determines that the applicant does not owe the state or federal government State delinquent taxes, penalties, or interest. If the department or the Internal Revenue Service determine determines that delinquent taxes, penalties, or interest are due, the department must shall notify the applicant of the necessary requirements to comply with this section."
D. Section 61-4-10 of the 1976 Code, as added by Act 415 of 1996, is amended to read:
"Section 61-4-10. All beers, ales, porter, and other similar malt or fermented beverages containing not in excess of five fourteen percent of alcohol by weight and all wines containing not in excess of twenty-one percent of alcohol by volume are declared to be nonalcoholic and nonintoxicating beverages."
E. Section 61-4-520 of the 1976 Code is amended to read:
"Section 61-4-520. No A retail permit authorizing the sale of beer or wine may must not be issued unless:
(1) The applicant, any a partner, or co-shareholder of the applicant, and each agent, employee, and servant of the applicant to be employed on the licensed premises are of good moral character.
(2) The retail applicant is a legal resident of the United States, has been a legal resident of this State for at least thirty days before the date of application, and has maintained his principal place of abode in the State for at least thirty days before the date of application.
(3) The wholesale applicant is a legal resident of the United States and has been a legal resident of this State for at least thirty days before the date of application and has maintained his principal place of abode in the State for at least thirty days before the date of application or has been licensed previously under the laws of this State.
(4) The applicant, within two years before the date of application, has not had revoked a beer or a wine permit issued to him.
(5)(4) The applicant is twenty-one years of age or older.
(6)(5) The location of the proposed place of business of the applicant is in the opinion of the department a proper one.
(7)(6) The department may consider, among other factors, as indications of unsuitable location, the proximity to residences, schools, playgrounds, and churches. This item does not apply to locations licensed before April 21, 1986.
(8)(7)(a) Notice of application has appeared at least once a week for three consecutive weeks in a newspaper most likely to give notice to interested citizens of the county, city, or community in which the applicant proposes to engage in business. The department shall determine which newspapers meet the requirements of this section based on available circulation figures. However, if a newspaper is published in the county and historically has been the newspaper where the advertisements are published, the advertisements published in that newspaper meet the requirements of this section. The notice must:
(a)(i) be in the legal notices section of the newspaper or an equivalent section if the newspaper has no legal notices section;
(b)(ii) be in large type, covering a space of one column wide and at least two inches deep; and
(c)(iii) state the type license applied for and the exact location of the proposed business.
(b)An applicant for a beer or wine permit and an alcoholic liquor license may use the same advertisement for both if the advertisement is approved by the department.
(9)(8) Notice has been given by displaying a sign for fifteen days at the site of the proposed business. The sign must:
(a) state the type of permit sought;
(b) state where an interested person may protest the application;
(c) be in bold type;
(d) cover a space at least twelve inches high and eighteen inches wide;
(e) be posted and removed by an agent of the division."
F. Section 61-4-525 of the 1976 Code is amended to read:
"Section 61-4-525. (A) A person residing in the county in which a retail beer and wine permit is requested to be granted, or a person residing within five miles of the location for which a retail beer and wine permit is requested, may protest the issuance or renewal of the permit if he files a written protest setting forth:
(1) the name, address, and telephone number of the person filing the protest;
(2) the name of the applicant for the permit and the address of the premises sought to be licensed, or the name and address of the permit holder if the application is for renewal;
(3) the specific reasons why the application should be denied; and
(4) whether or not he wishes to attend a contested case hearing before the Administrative Law Judge Division Court.
(B) Upon receipt of a timely filed protest, the department shall determine the protestant's intent to attend a contested hearing before the Administrative Law Judge Division Court. If the protestant intends to attend a contested hearing, the department may not issue the permanent permit but shall forward the file to the Administrative Law Judge Division Court.
(C) If the protestant, during the investigation expresses no desire to attend a contested hearing and offer testimony, the protest is deemed considered invalid, and the department shall continue to process the application and shall issue the permit if all other statutory requirements are met.
(D) A person who files a protest and fails to appear at a hearing after affirming a desire to attend the hearing may be assessed a fine or penalty to include court costs."
G. Section 61-6-1540(B) of the 1976 Code is amended to read:
"(B) Retail dealers licensed under pursuant to the ABC Act may sell all wines in the stores or places of business covered by their respective licenses, whether declared alcoholic or nonalcoholic or nonintoxicating by the laws of this State. Wines containing more than fourteen sixteen percent of alcohol by volume may be sold only in licensed alcoholic liquor stores or in establishments licensed to sell and permit consumption of alcoholic liquors in minibottles. The provisions of this section must do not be construed to amend, alter, or modify the taxes imposed on wines or the collection and enforcement of these taxes."
H. Section 12-60-510 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-60-510. (A) Before a taxpayer may seek a contested case hearing before the Administrative Law Judge Division Court, he shall exhaust the prehearing remedy.
(1) If a taxpayer requests a contested case hearing before the Administrative Law Judge Division Court within ninety days of the date of the proposed assessment without exhausting his prehearing remedy because he failed to file a protest with the department, the administrative law judge shall dismiss the action without prejudice. If the taxpayer failed timely to provide the department with the facts, law, and other authority supporting his position, he shall provide them to the department with the facts, law, and other authority he failed to present to the department earlier. The administrative law judge shall then remand the case to the department for reconsideration in light of the new facts or issues unless the department elects to forego the remand.
(2) If a taxpayer fails to file a protest with the department within ninety days of the date of the proposed assessment, the taxpayer is in default, and the department must issue an assessment for the taxes. The assessment may be removed by the Administrative Law Court for good cause shown, and the matter may be remanded to the department.
(B) Upon remand the department has thirty days, or a longer period ordered by the administrative law judge, to consider the new facts and issues and amend its department determination. The department shall issue its amended department determination in the same manner as the original. The taxpayer has thirty days after the date the department's amended determination was sent by first class mail or delivered to the taxpayer to again request a contested case hearing. Requests for a hearing before the Administrative Law Judge Division Court must be made in accordance with its rules. If the department fails to issue its amended department determination within thirty days of the date of the remand, or a longer period ordered by the administrative law judge, the taxpayer can again may request again a contested case hearing. At the new hearing the facts, law, and other authority presented at the original hearing have been presented in a timely manner for purposes of exhausting the taxpayer's prehearing remedy. The statute of limitations remains suspended by Section 12-54-85(G) during this process."
I. Section 12-60-1330 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(A) Section 12-60-1330. Before a person may seek a determination by an administrative law judge under pursuant to Section 12-60-1320, he shall exhaust his prehearing remedy.
(1) If a person requests a contested case hearing before the Administrative Law Judge Division Court within ninety days of the date of the denial or proposed suspension, cancellation, or revocation without exhausting his prehearing remedy because he failed to file a protest with the department, the administrative law judge shall dismiss the action without prejudice.
(2) If the person failed to provide the department within the ninety day time period with the facts, law, and other authority supporting his position, he shall provide them to the department with the facts, law, and other authority he failed to present to the department earlier. The administrative law judge shall then remand the case to the department for reconsideration in light of the new facts or issues unless the department elects to forego the remand.
(3) If a person fails to file a protest with the department within ninety days of the date of the denial or proposed suspension, cancellation, or revocation, the person is in default, and the department shall deny, suspend, cancel, or revoke the license or permit appropriate. The denial, suspension, cancellation, or revocation of the license or permit may be lifted by the administrative law court for good cause shown, and remand the matter to the department.
(B) Upon remand the department has thirty days, or a longer period ordered by the administrative law judge, to consider the new facts and issues and amend its department determination. The department shall issue its amended department determination in the same manner as the original. The person has thirty days after the date the department's amended determination was sent by first class mail or delivered to the person to again request a contested case hearing. Requests for a hearing before the Administrative Law Judge Division Court must be made in accordance with its rules. If the department fails to issue its amended department determination within thirty days of the date of the remand, or a longer period ordered by the administrative law judge, the person can again may request again a contested case hearing. At the new hearing the facts, law, and other authority presented at the original hearing have been presented in a timely manner for purposes of exhausting the person's prehearing remedy. The statute of limitations remains suspended by Section 12-54-85(G) during this process."
J. Section 61-6-1520 of the 1976 Code is repealed.
K. Except as provided in subsection A.2., this SECTION takes effect upon approval by the Governor.
SECTION __. Article 23, Chapter 37 of Title 12 of the 1976 Code is amended by adding:
"Section 12-37-2890. (A) Upon request of the Department of Revenue, and after the time period for all appeals of any tax due is exhausted, the Department of Public Safety shall suspend the driver's license and vehicle registration of a person who fails to file and pay a motor carrier property tax on a vehicle, pursuant to this article. Before notification is sent to the Department of Public Safety, the Department of Revenue shall notify the delinquent taxpayer by letter of the pending suspension and of the steps necessary to prevent the suspension from being entered on the person's driving and registration records. The department shall allow thirty days for payment of taxes before notifying the Department of Public Safety to suspend the driver's license and vehicle registration.
(B) Notwithstanding the provisions of Section 56-1-460, a charge of driving under suspension when the suspension is solely for failure to file and pay a motor carrier property tax or the reinstatement fee required for the property tax does not require proof of financial responsibility. A person is not subject to a custodial arrest solely for being under suspension pursuant to this section."
SECTION __. A. Section 12-28-310 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-28-310. (A) Subject to the exemptions provided in this chapter, a user fee of sixteen cents a gallon is imposed on:
(1) all gasoline used or consumed for any purpose in this State; and
(2) upon all diesel fuel used or consumed in this State in producing or generating power for propelling motor vehicles.
(B) The user fee levied on motor fuel subject to the user fee pursuant to this chapter is a levy and assessment on the consumer, and the levy and assessment on other persons as specified in this chapter are as agents of the State for the collection of the user fee. This section does not affect the method of collecting the user fee as provided in this chapter. The user fee imposed by this section must be collected and paid at those times, in the manner, and by those the persons specified in this chapter.
(C) The license user fee imposed by this section shall be in lieu is instead of all sales, use, or other excise tax which that may otherwise be imposed otherwise by any municipality, county, or other local political subdivision of the State."
B. Section 12-28-330 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-28-330. The department shall consider considers it a rebuttable presumption, subject to proof of exemption under pursuant to Article 7 of this chapter, that all motor fuel subject to the user fee removed from a terminal in this State, or imported into this State other than by a bulk transfer within the bulk transfer terminal system or delivered into an end user's storage tank, is to be used or consumed in this State, in the case of gasoline, and is to be used or consumed on the highways in South Carolina this State in producing or generating power for propelling motor vehicles in the case of all other taxable motor fuel."
SECTION __. A. Chapter 54 of Title 12 of the 1976 Code is amended by adding:
"Section 12-54-270. A tax refund check that is returned to the Department of Revenue for an unknown, undeliverable, or insufficient address is unclaimed property pursuant to the provisions of Chapter 18 of Title 27, the Uniform Unclaimed Property Act."
B. Section 27-18-20(10), of the 1976 Code, as last amended by Act 43 of 2001, is further amended to read:
"(10) 'Intangible property' includes:
(a) monies, checks, drafts, deposits, interest, dividends, and income;
(b) credit balances, customer overpayments, security deposits, refunds, credit memos, unpaid wages, unused airline tickets, and unidentified remittances except that intangible property does not include trading stamps and electronic entries representing trading stamps which that are awarded to retail customers incident to the purchase of goods;
(c) stocks and other intangible ownership interests in business associations;
(d) monies deposited to redeem stocks, bonds, coupons, and other securities, or to make distributions;
(e) amounts due and payable under the terms of insurance policies;
(f) amounts distributable from a trust or custodial fund established under a plan to provide health, welfare, pension, vacation, severance, retirement, death, stock purchase, profit sharing, employee savings, supplemental unemployment insurance, or similar benefits; and
(g) tax refund checks issued by this State and returned to the Department of Revenue by the Post Office for an unknown, undeliverable, or insufficient address."
C. Section 27-18-140 of the 1976 Code, as last amended by Act 264 of 1992, is further amended to read:
"Section 27-18-140. (A) Intangible property held for the owner by a court, state, or other government, governmental subdivision or agency, public corporation, or public authority which remains unclaimed by the owner for more than five years after becoming payable or distributable is presumed abandoned.
(B) Notwithstanding the provisions of subsection (A), tax refund checks as defined in Chapter 54 of Title 12 are presumed abandoned if unclaimed for a period of three months from the date the tax refund check was issued by the Department of Revenue.
(C) This chapter does not apply to tax refund checks mailed to an owner, and not presented for payment, but not returned to the Department of Revenue by the Post Office for an unknown, undeliverable, or insufficient address."
D. Section 27-18-180(A) of the 1976 Code is amended to read:
"(A) A person holding property tangible or intangible property, that is presumed abandoned and subject to custody as unclaimed property under pursuant to this chapter, shall report to the administrator concerning the property as provided in this section. The action taken to report an unclaimed tax refund check to the administrator is not a violation of disclosure prohibitions described in Section 12-54-240."
E. Section 12-6-5560 of the 1976 Code is repealed.
SECTION __. Section 12-54-46 of the 1976 Code is amended to read:
"Section 12-54-46. (A) An individual subject to withholding and required to supply information to his employer under pursuant to Chapter 8 of Title 12 who supplies a withholding exemption certificate which exceeds the number of exemptions to which he is entitled is liable for a penalty of not less than fifty five hundred dollars for each exemption claimed that exceeds the number to which he is entitled. The penalty is assessed and collected in the same manner as income tax penalties of the following violations:
(1) refusing or failing to provide a withholding exemption certificate;
(2) providing a withholding exemption certificate that claims he is exempt from withholding;
(3) providing exemptions on a withholding exemption certificate exceeding the number of exemptions to which he is entitled; or
(4) requesting a waiver from withholding to which he is not entitled.
(B) An additional five hundred dollar penalty is imposed each January first that a violation is not corrected.
(C) The penalty does not apply to an individual described in subsection (A) who has a change in family circumstances that makes his withholding exemption certificate inaccurate unless his employer or the department has informed him to revise his withholding exemption certificate."
SECTION __. Section 12-36-2610 of the 1976 Code, as last amended by Act 363 of 2002, is further amended to read:
"Section 12-36-2610. When a sales or use tax return required by Section 12-36-2570 and Chapter 10 of Title 4 a local sales and use tax law administered and collected by the department on behalf of a local jurisdiction is filed and the taxes due on it are paid in full on or before the final due date, including any date to which the time for making the return and paying the tax has been extended pursuant to the provisions of Section 12-54-70, the taxpayer is allowed a discount as follows:
(1) on taxes shown to be due by the return of less than one hundred dollars, three percent;
(2) on taxes shown to be due by the return of one hundred dollars or more, two percent.
In no case is a discount allowed if the return, or the tax on it is received after the due date, pursuant to Section 12-36-2570, or after the expiration of any extension granted by the department. The discount permitted a taxpayer under this section may not exceed three thousand dollars during any one state fiscal year. However, for taxpayers filing electronically, the discount may not exceed three thousand one hundred dollars. A person making sales into this State who cannot be required to register for sales and use tax under applicable law but who nevertheless voluntarily registers to collect and remit use tax on items of tangible personal property sold to customers in this State is entitled to a discount on returns filed as otherwise provided in this section not to exceed ten thousand dollars during any one state fiscal year." /
Renumber sections to conform.
Amend title to conform.
Amend the amendment, Section 12-6-1130 as found on pages 8 and 9, by deleting the section in its entirety.
Renumber sections to conform.
Amend title to conform.
ROBERT W. HARRELL, JR. for Committee.
TO AMEND SECTION 12-2-75, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SIGNATORIES TO TAX RETURNS, SO AS TO AUTHORIZE A QUALIFIED TAX PREPARER TO SIGN ELECTRONICALLY; TO AMEND SECTION 12-4-30, RELATING TO COMPOSITION OF THE DEPARTMENT OF REVENUE, SO AS TO DELETE OUT-DATED LANGUAGE; TO AMEND SECTION 12-4-540, RELATING TO APPRAISAL, ASSESSMENT, AND EQUALIZATION OF TAXABLE VALUES OF CORPORATE PROPERTY, SO AS TO MAKE A GRAMMATICAL CHANGE; TO AMEND SECTION 12-6-50, AS AMENDED, RELATING TO SECTIONS OF THE INTERNAL REVENUE CODE NOT ADOPTED BY SOUTH CAROLINA, SO AS TO ADD A CROSS REFERENCE; TO AMEND SECTION 12-6-1170, RELATING TO INCOME DEDUCTION FROM TAXABLE RETIREMENT INCOME, SO AS TO ADD CLARIFYING LANGUAGE; TO AMEND SECTION 12-6-1720, RELATING TO TAXABLE INCOME REPORTABLE BY A NONRESIDENT, SO AS TO INCLUDE LOTTERY AND BINGO WINNINGS; TO AMEND SECTION 12-6-3360, AS AMENDED, RELATING TO THE JOB TAX CREDIT, SO AS TO CORRECT A CROSS REFERENCE; TO AMEND SECTION 12-6-3570, AS AMENDED, RELATING TO TAX CREDITS FOR A MOTION PICTURE PRODUCTION COMPANY, SO AS TO CORRECT A CROSS REFERENCE; TO AMEND SECTION 12-10-80, AS AMENDED, RELATING TO JOB DEVELOPMENT CREDITS, SO AS TO PROVIDE THAT THE COUNTY DESIGNATION IS EFFECTIVE AS OF THE DATE THE APPLICATION FOR CREDITS IS RECEIVED; TO AMEND SECTION 12-54-55, AS AMENDED, RELATING TO INTEREST ON THE UNDERPAYMENT OF ESTIMATED TAX, SO AS TO INCLUDE SMALL AMOUNT PROVISIONS; TO AMEND SECTION 12-54-70, RELATING TO THE EXTENSION OF TIME FOR FILING TAX RETURNS, SO AS TO CLARIFY A CROSS REFERENCE; TO AMEND SECTION 12-54-110, AS AMENDED, RELATING TO THE POWER OF THE DEPARTMENT OF REVENUE TO SUMMON A PERSON, SO AS TO PROVIDE THAT AN ADMINISTRATIVE LAW JUDGE HOLD A CONTEMPT HEARING ON FAILURE TO COMPLY WITH A SUMMONS; AND TO AMEND SECTION 12-60-90, AS AMENDED, RELATING TO SANCTIONS AGAINST A PERSON AUTHORIZED TO REPRESENT A TAXPAYER ADMINISTRATIVELY, SO AS TO INCLUDE A MONETARY PENALTY AND MAKE A CLARIFICATION.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-2-75(B) of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:
"(B) In the instructions to a return, or otherwise, the department may authorize taxpayers to sign returns by other means, including electronically, and may authorize the signature to be filed or deposited with and be kept or forwarded by a third party. To the extent that a tax return preparer, as that term is defined in Internal Revenue Code Section 7701(a)(36), is required or permitted to sign a return, the department in the instructions to a return, or otherwise, may authorize the tax return preparer to sign the return by other means, including electronically."
SECTION 2. Section 12-4-30 of the 1976 Code is amended to read:
"Section 12-4-30. (A) Until February 1, 1995, the department consists of three commissioners, their officers, agents, and employees. The commissioners are appointed by the Governor with the advice and consent of the Senate. Commissioners shall possess sound moral character, superior knowledge in taxation, and proven administrative ability. The Governor shall designate one of the commissioners as chairman, giving consideration to prior service as a commissioner or employee of the commission.
(B) If a vacancy on the commission occurs when the General Assembly is not in session, it must be filled by the Governor's appointment for the unexpired term, subject to confirmation by the Senate at the next session of the General Assembly. Commissioners may be removed by the Governor for cause as provided in Section 1-3-240.
(C) After February 1, 1995, the (A) The department will be is governed in matters of policy and administration by a director appointed by the Governor with the advice and consent of the Senate. The director may be removed from office pursuant to the provisions of Section 1-3-240.
(D)(B) After February 1, 1995, all All contested cases, as defined by Section 1-23-310 and as previously considered by the three commissioners, shall must be heard by an administrative law judge under pursuant to the provisions of Chapter 23 of Title 1."
SECTION 3. Section 12-4-540(A) of the 1976 Code is amended to read:
"(A)(1) The department has the sole responsibility for the appraisal, assessment, and equalization of the taxable values of corporate headquarters, corporate office facilities, and distribution facilities and of the real and personal property owned, used, by or leased by to the following businesses and used in the conduct of their business:
(1)(a) manufacturing;
(2)(b) railway;
(3)(c) private carline;
(4)(d) airline;
(5)(e) water, heat, light and power;
(6)(f) telephone;
(7)(g) cable television;
(8)(h) sewer;
(9) (i) pipeline;
(10)(j) mining.
(2) In addition, the department has the sole responsibility for the appraisal, assessment, and equalization of the taxable values of the personal property of merchants."
SECTION 4. Section 12-6-50(14) of the 1976 Code is amended to read:
"(14) Sections 2001 through 7655, 7801 through 7871, and 8001 through 9602, except for Section 6015, and except for Sections 6654 and 6655 which are adopted as provided in Section 12-6-3910 and Section 12-54-55."
SECTION 5. Section 12-6-1170(A)(1) of the 1976 Code is amended to read:
"(1) An individual taxpayer who is the original owner of a qualified retirement account is allowed an annual deduction from South Carolina taxable income of not more than three thousand dollars of retirement income received. Beginning in the year in which the taxpayer reaches age sixty-five, the taxpayer may deduct not more than ten thousand dollars of retirement income that is included in South Carolina taxable income."
SECTION 6. Section 12-6-1720(1) of the 1976 Code is amended by adding an appropriately numbered item at the end to read:
"(1) South Carolina taxable income, gains, losses, or deductions include only amounts attributable to:
(a) the ownership of any interest in real or tangible personal property located in this State;
(b) a business, trade, profession, or occupation carried on in this State or compensation for services performed in this State. If a business, trade, profession, or occupation is carried on or compensation is for services performed partly within and partly without this State, the amount allocable or apportionable to this State under Article 17 of this chapter must be included in South Carolina income;
(c) income from intangible personal property, including annuities, dividends, interest, and gains that is derived from property employed in a trade, business, profession, or occupation carried on in this State. For purposes of this item, a taxpayer, other than a dealer holding property primarily for sale to customers in the ordinary course of the nonresident's trade or business, is not considered to carry on a business, trade, profession, or occupation in South Carolina solely by reason of the purchase and sale of property for the nonresident's own account;
(d) the distributive share of the South Carolina portion of partnership, 'S' Corporation, estate, and trust income, gains, losses, and deductions.;
(e) lottery or bingo winnings."
SECTION 7. Section 12-6-3360(N), as last amended by Act 332 of 2002, is further amended to read:
"(N) Except for employees employed in distressed counties, the maximum aggregate credit that may be claimed in any tax year for a single employee under pursuant to this section and Section 12-6-34(A)(1) 12-6-3470(A) is five thousand five hundred dollars."
SECTION 8. Section 12-6-3570(E) of the 1976 Code, as added by Act 299 of 2004, is amended to read:
"(E) All documentation provided by investors and their agents to the Department of Revenue in connection with claiming the credits allowed by this section is considered a tax return and subject to the penalty provisions of Section 12-54-40(f) in Chapter 54 of Title 12."
SECTION 9. Section 12-10-80(D)(3) of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:
"(3) The county designation of the county in which the project is located at the time on the date the qualifying business enters into a preliminary revitalization agreement with the council application for job development credit incentives is received in the Office of the Coordinating Council remains in effect for the entire period of the revitalization agreement, except as to additional jobs created pursuant to an amendment to a revitalization agreement entered into before June 1, 1997, as provided in Section 12-10-60. In that case the county designation on the date of the amendment remains in effect for the remaining period of the revitalization agreement as to any additional jobs created after the effective date of the amendment. This item does not apply to a business whose application for job development fees or credits pursuant to Section 12-10-81 has been approved by council before the effective date of this act."
SECTION 10. Section 12-54-55(1) of the 1976 Code is amended to read:
"(1) in the case of an individual taxpayer, estate, or trust in the same manner as prescribed by the provisions of Internal Revenue Code Section 6654 and applicable regulations except that the small amount provisions are one hundred dollars. No interest or penalty is due under this item for underpayments attributable to personal service income earned in another state on which income tax due the other state was withheld;"
SECTION 11. Section 12-54-70(b) of the 1976 Code is amended to read:
"(b) If the amount remitted with the tentative return fails to reflect at least ninety percent of the tax to be paid for the period granted by the extension, a penalty as provided in Section 12-54-43(D) must be imposed from the date the tax was originally due on the difference between the amount remitted and the tax to be paid for the period."
SECTION 12. Section 12-54-110(D) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(D) If a person summoned pursuant to this section neglects or refuses to obey the summons, the department may apply to a circuit judge the Administrative Law Court for an attachment against him for contempt. Any judge Administrative Law Judge may hear the application and, if satisfactory proof is made, shall issue an attachment directed to the sheriff of the county in which the person resides for his arrest. When the person is brought before him, the judge shall proceed to a hearing of the case and may enforce obedience to the requirements of the summons by making an order consistent with existing laws for the punishment of contempt."
SECTION 13. Section 12-60-90(D) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(D) The department may suspend or disbar from practice in the administrative tax process or censure, any person authorized by these rules to represent taxpayers, if the person is shown to be incompetent, disreputable, or fails or refuses to comply with the rules in subsection (E), or in any manner, with intent to defraud, wilfully and knowingly deceives, misleads, or threatens any claimant person or prospective claimant person to be represented, by word, circular, letter, or by advertisement. The department may impose a monetary penalty on the representative, and if the representative was acting on behalf of an employer or any firm or other entity in connection with the conduct giving rise to the penalty, the department may impose a monetary penalty on the employer, firm, or entity if it knew, or reasonably should have known, of the conduct. The penalty may not exceed the gross income derived, or to be derived, from the conduct giving rise to the penalty and may be in addition to, or instead of, suspension, disbarment, or censure of the representative. For the purposes of this section, incompetence and disreputable conduct is defined in Section 10.51 of United States Treasury Department Circular No. 230. The department may review a petition for reinstatement as provided in Section 10.81."
SECTION 14. Section 12-60-90(F)(4) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(4) references to federal tax obligations mean include all South Carolina taxes, including property taxes and property tax assessments, where administered by the department."
SECTION 15. This act takes effect upon approval by the Governor.
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