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TO AMEND SECTION 12-6-3535, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE STATE INCOME TAX CREDIT ALLOWED A TAXPAYER MAKING QUALIFIED REHABILITATION EXPENDITURES FOR A CERTIFIED HISTORIC STRUCTURE IN THIS STATE, SO AS TO ADD TECHNICAL REFERENCES AND TO DEFINE "PARTNER" FOR PURPOSES OF THE APPLICATION OF THE CREDIT TO PASS-THROUGH ENTITIES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-6-3535(A) of the 1976 Code, as last amended by Act 138 of 2005, is amended to read:
"(A) A taxpayer who is allowed a federal income tax credit under pursuant to Section 47 of the Internal Revenue Code for making qualified rehabilitation expenditures for a certified historic structure located in this State is allowed to claim a credit against income or license tax imposed pursuant to this title taxes imposed by Sections 12-6-510 and 12-6-530 and license fees imposed by Chapter 20 of Title 12. For the purposes of this section, 'qualified rehabilitation expenditures' and 'certified historic structure' are defined as provided in the Internal Revenue Code Section 47 and the applicable treasury regulations. The amount of the credit is ten percent of the expenditures that qualify for the federal credit. To claim the credit allowed by this subsection, the taxpayer must attach to the return a copy of the section of the federal income tax return showing the credit claimed, along with any other information that the Department of Revenue determines is necessary for the calculation of the credit provided by this subsection."
SECTION 2. Section 12-6-3535(C)(2) of the 1976 Code, as last amended by Act 138 of 2005, is amended to read:
"(2) The credit earned pursuant to this section by an 'S' corporation owing corporate level income tax must be used first at the entity level. Any Remaining credit passes through to each shareholder in a percentage equal to each shareholder's percentage of stock ownership. The credit earned pursuant to this section 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 any a manner agreed by the partners that is consistent with Subchapter K of the Internal Revenue Code. As used in this item the term 'partner' means a partner, member, or owner of an interest in the pass-through entity, as applicable."
SECTION 3. This act takes effect upon approval by the Governor and applies to tax years beginning in 2006.
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