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Indicates Matter Stricken
Indicates New Matter
Indicates Matter Stricken
Indicates New Matter
COMMITTEE REPORT
May 17, 2006
H. 4491
S. Printed 5/17/06--S.
Read the first time February 16, 2006.
To whom was referred a Bill (H. 4491) to amend Section 12-6-3360, as amended, Code of Laws of South Carolina, 1976, relating to the targeted jobs tax credit, so as to revise, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
HUGH K. LEATHERMAN, SR. for Committee.
REVENUE IMPACT 1/
This bill would have no impact on general fund income tax revenue in FY2006-07.
Explanation
This bill would amend Section 12-6-3360(M)(13)(b) by revising the per capita income threshold for service-related job tax credits. Under current law, average compensation levels of service-related businesses must exceed "county" per capita income levels by up to two and one-half times to qualify for the job tax credits. This bill would give the option of using "state" per capita income levels, if lower than "county" per capita income levels, as the qualifying threshold for the job tax credits. This would provide greater flexibility for service-related businesses establishing operations in South Carolina to qualify for the jobs tax credit. According to the South Carolina Department of Commerce, in the past four years, eleven service-related businesses creating 3,173 jobs have been approved for the job tax credits, or an average of three businesses per year each creating an average of 288 jobs per year or 864 total jobs per year. Assuming that one service-related business establishes operations in South Carolina, creates the average 288 jobs, and qualifies for the average job tax credit of $2,500 per job, the total amount of the job tax credit equals $720,000. This bill is expected to reduce general fund income tax revenue by an estimated $720,000 in FY2006-07.
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 12-6-3360, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE TARGETED JOBS TAX CREDIT, SO AS TO REVISE THE DEFINITION OF "QUALIFYING SERVICE-RELATED FACILITY" WITH RESPECT TO COMPENSATION REQUIREMENTS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-6-3360(M)(13)(b) of the 1976 Code is amended to read:
"(b) a business, other than a business engaged in legal, accounting, or investment services or retail sales, which has a net increase of at least:
(i) two hundred fifty jobs at a single location;
(ii) one hundred twenty-five jobs at a single location and the jobs have an average cash compensation level of more than one and one-half times the lower of state per capita income or per capita income in the county where the jobs are located;
(iii) seventy-five jobs at a single location and the jobs have an average cash compensation level of more than twice the lower of state per capita income or per capita income in the county where the jobs are located; or
(iv) thirty jobs at a single location and the jobs have an average cash compensation level of more than two and one-half times the lower of state per capita income or per capita income in the county where the jobs are located.
A taxpayer shall use the most recent per capita income data available as of the end of the taxable year in which the jobs are filled. Determination of the required number of jobs is in accordance with the monthly average described in subsection (F)."
SECTION 2. This act takes effect upon approval by the Governor.
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