Download This Version in Microsoft Word format

Bill 589

Indicates Matter Stricken
Indicates New Matter

Indicates Matter Stricken

Indicates New Matter

AMENDED

May 25, 2005

S. 589

Introduced by Senators McConnell, Drummond, Rankin, Land, McGill, Thomas, Moore, Fair, Ryberg, Setzler, Peeler, Reese and Verdin

S. Printed 5/25/05--H.

Read the first time April 6, 2005.

TO AMEND ARTICLE 3, CHAPTER 43, TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO COUNTY EQUALIZATION AND REASSESSMENT, BY ADDING SECTION 12-43-365, SO AS TO PROVIDE THAT THE VALUE OF TANGIBLE AND INTANGIBLE PERSONAL PROPERTY AND ANY INCOME DERIVED THEREFROM, WHETHER DIRECTLY OR INDIRECTLY, SHALL NOT BE INCLUDED IN THE DETERMINATION OF FAIR MARKET VALUE OF GOLF COURSE REAL PROPERTY FOR AD VALOREM TAX PURPOSES.

Amend Title To Conform

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.        The General Assembly finds that:

(1)    The golf industry contributes significantly to the economic well-being of this State, particularly in the tourism sector of its economy, and brings with it a much needed infusion of capital and employment, as well as property tax revenues into local governments.

(2)    Real and personal property for golf courses is taxable as provided in Article X, Section 1 of the Constitution of South Carolina, 1895.

(3)    Pursuant to Article X, Section 2 of the South Carolina Constitution, the General Assembly may prescribe the methods of assessment of property for ad valorem taxation.

(4)    Section 12-37-220(A)(10) of the 1976 Code provides that pursuant to Article X, Section 3 of the State Constitution, and subject to Section 12-4-720, "intangible personal property" is exempt from ad valorem taxation.

(5)    In arriving at a fair market value determination for golf course real property, the Administrative Law Court in Sea Pines Plantation Co., Inc v. Beaufort Co., 01-ALJ-17-0018-CC, S.C. A.L.J.D. 2002, and The Ocean Course v. Charleston County Assessor, 03-ALJ17-0471-CC, S.C. A.L.C. 2005, clearly states that personal property and the income derived therefrom must be excluded from real estate valuation for ad valorem tax purposes, as in the case of Minnetonka Country Club Ass'n v. County of Hennepin, 1989 Minn. Tax LEXIS 44 (Minn. Tax Ct. April 7, 1989).

(6)    The inclusion of personal property and any income derived therefrom in the valuation of golf course real property for ad valorem tax purposes results in double taxation.

(7)    Current valuation methods utilized by some assessing entities in South Carolina result in the inclusion of personal property and the income derived therefrom in the valuation of golf course real property for ad valorem tax purposes.

(8)    The inclusion of personal property and the income derived therefrom in the valuation of golf course real property for ad valorem tax purposes has been a recurring matter of dispute between golf course owners and assessing entities and has resulted in numerous appeals and increased litigation costs for both the public and private sector.

(9)    It is desirable to promote uniformity among the counties and within the industry in the valuation of golf course real property for ad valorem tax purposes.

(10)    It is desirable to prevent double taxation in the valuation of personal property.

(11)    It is desirable to prevent duplicative litigation.

(12)    In order to address these concerns, it is necessary to enact this legislation to clearly state that it is the law of South Carolina that the value of certain personal property, and the income derived therefrom, whether directly or indirectly, is to be excluded from the valuation of golf course real property.

SECTION    2.    Article 3, Chapter 43, Title 12 of the 1976 Code is amended by adding:

"Section 12-43-365.    (A)    The value of tangible personal property and intangible personal property and any income or expense derived from such property, whether directly or indirectly, must not be included in the determination of fair market value of golf course real property for ad valorem tax purposes.

(B)    For purposes of this section 'intangible personal property' has the same meaning as 'intangible personal property' as contained in Article X, Section 3(j) of the Constitution of this State.

(C)    If the fair market value of golf course real property for ad valorem tax purposes is determined pursuant to the capitalized income approach, the taxpayer shall provide income and expense data for the entire golf course operation, golf cart rentals, food and beverage services, and pro shop sales on a form designed by the county assessors and golf course owners and approved by the South Carolina Department of Revenue. Any data provided by the taxpayer for this purpose is not public data and may not be disclosed except in the process of a formal appeal involving the subject real property."

SECTION    3.    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    4.    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    5.    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    6.    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    7.    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    8.    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    9.    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    10.    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    11.    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    12.    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    13.    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    14.    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    15.    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    16.    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    17.    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    18.    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    19.    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    20.    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    21.    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    22.    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    23.    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    24.    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, 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 K-12 public education for use in the manner the General Assembly provides by law, 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    25.    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.

B.     This SECTION takes effect upon approval by the Governor and applies to taxable years beginning after 2005.

SECTION    26.    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    27.    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 certified 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    28.    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    29.    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    30.    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    31.    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."

SECTION    32.    Section 12-36-2110(A)(5) of the 1976 Code is amended to read:

"(5)    trailer or semitrailer, pulled by a truck tractor, as defined in Section 56-3-20, and horse trailers, but not including house trailers or campers as defined in Section 56-3-710 or a fire safety education trailer;"

SECTION    33.    A.    Chapter 36 of Title 12 of the 1976 Code is amended by adding:

Section 12-36-1910.    For purposes of this article:

(1)    'Air-to-ground radiotelephone service' means a radio service, as that term is defined in 47 CFR 22.99, in which common carriers are authorized to offer and provide radio telecommunications service for hire to subscribers in aircraft.

(2)    'Call-by-call basis' means any method of charging for telecommunications services in which the price is measured by individual calls.

(3)    'Communications channel' means a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points.

(4)    'Customer' means the person or entity that contracts with the seller of telecommunications services. If the end user of telecommunications services is not the contracting party, the end user of the telecommunications service is the customer of the telecommunication service, but this provision applies only for the purpose of sourcing sales of telecommunications services pursuant to Section 12-36-1920. 'Customer' does not include a reseller of telecommunications service or a mobile telecommunications service of a serving carrier under an agreement to serve the customer outside the home service provider's licensed service area.

(5)    'Customer channel termination point' means the location where the customer either inputs or receives the communications.

(6)    'End user' means the person who utilizes the telecommunication service. In the case of an entity, 'end user' means the individual who utilizes the telecommunication service. In the case of an entity, 'end user' means the individual who utilizes the service on behalf of the entity.

(7)    'Home service provider' means the same as that term is defined in Section 124(5) of Public Law 106-252 (Mobile Telecommunications Sourcing Act).

(8)    'Mobile telecommunications service' means the same as that term is defined in Section 124(7) of Public Law 106-252 (Mobile Telecommunications Sourcing Act).

(9)    'Place of primary use' means the street address representative of the customer's primary use of the telecommunications service, which must be the residential street address or the primary business street address of the customer. In the case of mobile telecommunications services, 'place of primary use' must be within the licensed service area of the home service provider.

(10)    'Post-paid calling service' means the telecommunications service obtained by making a payment on a call-by-call basis either through the use of a credit card or payment mechanism like a bank card, travel card, credit card, or debit card, or by charge made to a telephone number which is not associated with the origination or termination of the telecommunications. A post-paid calling service includes a telecommunications service that would be a prepaid calling service except it is not exclusively a telecommunication service.

(11)    'Prepaid calling service' means the right to access exclusively telecommunications services, which must be paid for in advance and which enables the origination of calls using an access number or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars, of which the number declines with use in a known amount.

(12)    'Private communication service' means a telecommunication service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which the channel or channels are connected, and includes switching capacity, extension lines, stations, and other associated services provided in connection with the use of the channel or channels.

(13)    'Service address' means:

(a)    the location of the telecommunications equipment to which a customer's call is charged and from which the call originates or terminates, regardless of where the call is billed or paid;

(b)    if the location in item (a) is not known, service address means the origination point of the signal of the telecommunications services first identified by either the seller's telecommunications system or in information received by the seller from its service provider, where the system used to transport the signals is not that of the seller;

(c)    if the location in item (a) and item (b) is not known, the service address means the location of the customer's place of primary use.

Section 12-36-1920.    For the purposes of telecommunications sourcing:

(1)    Except for the defined telecommunication services in item (3), the sale of telecommunication service sold on a call-by-call basis must be sourced to (i) each level of taxing jurisdiction where the call originates and terminates in that jurisdiction or (ii) each level of taxing jurisdiction where the call either originates or terminates and in which the service address is also located.

(2)    Except for the defined telecommunication services in item (3), a sale of telecommunications services on a basis other than a call-by-call basis, is sourced to the customer's place of primary use.

(3)    The sale of the following telecommunication services must be sourced to each level of taxing jurisdiction:

(a)    A sale of mobile telecommunications services, other than air-to-ground radiotelephone service and prepaid calling service, is sourced to the customer's place of primary use as required by the Mobile Telecommunications Sourcing Act.

(b)    A sale of post-paid calling service is sourced to the origination point of the telecommunications signal as first identified by either (i) the seller's telecommunications system, or (ii) information received by the seller from its service provider, where the system used to transport the signals is not that of the seller.

(c)    A sale of a private communication service is sourced as follows:

(i)        Service for a separate charge related to a customer channel termination point is sourced to each level of jurisdiction in which the customer channel termination point is located.

(ii)    Service in which all customer termination points are located entirely within one jurisdiction or levels of jurisdiction is sourced in the jurisdiction in which the customer channel termination points are located.

(iii)    Service for segments of a channel between two customer channel termination points located in different jurisdictions and the segments of channel are separately charged is sourced fifty percent in each level of jurisdiction in which the customer channel termination points are located.

(iv)    Service for segments of a channel located in more than one jurisdiction or levels of jurisdiction and the segments are not separately billed is sourced in each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in the jurisdiction by the total number of customer channel termination points.

Section 12-36-1930.    Notwithstanding another provision of law, this article applies to local sales and use taxes on telecommunication services collected and administered by the Department of Revenue on behalf of the local jurisdictions."

B.     Section 12-36-910(B)(3)(a) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:

"(3)(a)    gross proceeds accruing or proceeding from the charges for the ways or means for the transmission of the voice or messages, including the charges for use of equipment furnished by the seller or supplier of the ways or means for the transmission of the voice or messages. Gross proceeds from the sale of prepaid wireless calling arrangements subject to tax at retail pursuant to item (5) of this subsection are not subject to tax pursuant to this item. Effective for bills rendered after August 1, 2002, charges for mobile telecommunications services subject to the tax under this item must be sourced in accordance with the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code. The term 'charges for mobile telecommunications services' is defined for purposes of this section the same as it is defined in the Mobile Telecommunications Sourcing Act. All other definitions and provisions of the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code are adopted. Telecommunications services are sourced in accordance with Section 12-36-1920;"

C.     Section 12-36-1310(B)(3) of the 1976 Code, as last amended by Act 334 of 2002, is further amended to read:

"(3)(a)    gross proceeds accruing or proceeding from the charges for the ways or means for the transmission of the voice or messages, including the charges for use of equipment furnished by the seller or supplier of the ways or means for the transmission of the voice or messages. Gross proceeds from the sale of prepaid wireless calling arrangements subject to tax at retail pursuant to item (5) of this subsection are not subject to tax pursuant to this item. Effective for bills rendered after August 1, 2002, charges for mobile telecommunications services subject to the tax under this item must be sourced in accordance with the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code. The term 'charges for mobile telecommunications services' is defined for purposes of this section the same as it is defined in the Mobile Telecommunications Sourcing Act. All other definitions and provisions of the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code are adopted. Telecommunications services are sourced in accordance with Section 12-36-1920;

(b)(i)    for purposes of this item, a 'bundled transaction' means a transaction consisting of distinct and identifiable properties or services, which are sold for one nonitemized price but which are treated differently for tax purposes;

(ii)    for bills rendered on or after January 1, 2004, that include telecommunications services in a bundled transaction, if the nonitemized price is attributable to properties or services that are taxable and nontaxable, the portion of the price attributable to any nontaxable property or service is subject to tax unless the provider can reasonably identify that portion from its books and records kept in the regular course of business for purposes other than sales taxes;"

D.     Section 12-36-1310(B), as last amended by Act 69 of 2003, is further amended by adding:

"(5)    gross proceeds accruing or proceeding from the sale or recharge at retail for prepaid wireless calling arrangements.

(a)    'Prepaid wireless calling arrangements' means communication services that:

(i)    are used exclusively to purchase wireless telecommunications;

(ii)    are purchased in advance;

(iii)    allow the purchaser to originate telephone calls by using an access number, authorization code, or other means entered manually or electronically; and

(iv)    are sold in units or dollars which decline with use in a known amount.

(b)    All charges for prepaid wireless calling arrangements must be sourced to the:

(i)    location in this State where the over-the-counter sale took place;

(ii)    shipping address if the sale did not take place at the seller's location and an item is shipped; or

(iii)    either the billing address or location associated with the mobile telephone number if the sale did not take place at the seller's location and no item is shipped."

E.     This SECTION takes effect the first calendar day of the third full month after its approval by the Governor.

SECTION    34.    Notwithstanding the provisions of Section 12-43-217 of the 1976 Code, a county which conducted a countywide property tax equalization and reassessment program after 2000 which has not yet been implemented, may by ordinance postpone the implementation for one additional property tax year.

SECTION    35.    A.        Section 12-36-140(C)(3), as added by Act 387 of 2000, is amended to read:

"(3)    for the purpose of being distributed as (i) cooperative direct mail promotional advertising materials, or (ii) promotional maps, brochures, pamphlets, or discount coupons by nonprofit chambers of commerce or convention and visitor bureaus who are exempt from income taxation pursuant to Internal Revenue Code Section 501(c) by means of interstate carrier, a mailing house, or a United States Post Office to residents of this State from locations both inside and outside the State. For purposes of this item, 'cooperative direct mail promotional advertising materials' means discount coupons, advertising leaflets, and similar printed advertising, including any accompanying envelopes and labels which are distributed with promotional advertising materials of more than one business in a single package to potential customers, at no charge to the potential customer, of the businesses paying for the delivery of the material."

B.     Section 12-36-2120(58) of the 1976 Code, as added by Act 387 of 2000, is amended to read:

"(58)    cooperative direct mail promotional advertising materials and promotional maps, brochures, pamphlets, or discount coupons by nonprofit chambers of commerce or convention and visitor bureaus who are exempt from income taxation pursuant to Internal Revenue Code Section 501(c) delivered at no charge by means of interstate carrier, a mailing house, or a United States Post Office to residents of this State from locations both inside and outside the State. For purposes of this item, 'cooperative direct mail promotional advertising materials' means discount coupons, advertising leaflets, and similar printed advertising, including any accompanying envelopes and labels which are distributed with promotional advertising materials of more than one business in a single package to potential customers, at no charge to the potential customer, of the businesses paying for the delivery of the material."

C.     This section takes effect for tax years beginning after 2005, but does not authorize or permit refunds of taxes paid.

SECTION    36.    Article 13, Chapter 28, Title 12 of the 1976 Code is amended by adding:

"Section 12-28-1400.    (A)    All information required to be reported in this chapter must be used in the tracking of petroleum products and must be submitted in the manner provided by the department. The requirements may include, but not be limited to, the data elements, the format of the data elements, and the method and medium of transmission to the department.

(B)    A person liable for reporting under this chapter who fails to meet the requirements of this section within three months after notification of the failure by the department, in addition to all other penalties prescribed by this chapter, is subject to an additional penalty of five thousand dollars for each month the failure continues."

SECTION    37.    A.        Chapter 54, Title 12 of the 1976 Code is amended by adding:

"Section 12-54-123.    A person in possession of property upon which a levy has been made who, upon demand by the department, surrenders the property to the department must not be held personally liable for any obligation or liability to the taxpayer and any other person with respect to the property that arises from the surrender or payment. If a person brings an action not allowed pursuant to this section in any court of this State, the court shall dismiss the case."

B.     This section takes effect July 1, 2005.

SECTION    38.    A.        Title 12 of the 1976 Code is amended by adding:

Section 12-55-10.    This chapter may be cited as the 'Overdue Tax Debt Collection Act'.

Section 12-55-20.    The General Assembly finds that the Department of Revenue has documented that the state's cost of collecting overdue tax debts exceeds twenty percent of the cost of collecting overdue debts. The General Assembly further finds that the cost of collecting overdue tax debts is currently borne by taxpayers who pay their taxes on time. It is the intent of the General Assembly by enacting the 'Overdue Tax Debt Collection Act' to ship this cost to the delinquent taxpayers who owe overdue tax debts.

Section 12-55-30.    (A)    As used in this chapter:

(1)    'Overdue tax debt' means any part of a tax debt that remains unpaid one hundred twenty days or more after the taxpayer receives notice as defined in Section 12-55-30(A)(2).

(2)    'Notice' means a notice of assessment issued by the department to the taxpayer pursuant to the South Carolina Revenue Procedures Act.

(3)    'Tax debt' means the total amount of tax, fees, penalties, interest, and costs for which notice has been issued by the department to the taxpayer.

(B)    Except when the context clearly indicates a different meaning, the definitions in Section 12-60-30 also apply to this chapter.

Section 12-55-40.    A collection assistance fee may be imposed on an overdue tax debt. To impose a collection assistance fee on a tax debt, the department shall notify the taxpayer that the collection assistance fee may be imposed if the tax debt becomes overdue tax debt.

Section 12-55-50.    The collection assistance fee is collectible as part of the debt. The department may waive the fee to the same extent as if it were a penalty.

Section 12-55-60.    The amount of the collection assistance fee is twenty percent of the amount of the overdue tax.

Section 12-55-70.    The proceeds of the collection assistance fee must be credited to a special account within the department and must be used to fund the South Carolina Business One Stop (SCBOS) program within the department. Any excess proceeds of the collection assistance fee above the amount required to fund the SCBOS program must be credited to the department to be retained and expended for use in budgeted operations.

Section 12-55-80.    The department may bring suits in the courts of other states to collect taxes legally due this State. The officials of other states are empowered to sue for the collection of taxes in the courts of this State. Whenever the department considers it expedient to employ local counsel to assist in bringing suit in an out-of-state court, the department may employ local counsel.

Section 12-55-90.    Collection agencies with which the department contracts under Sections 12-4-340 and 12-54-227 are also authorized to collect on behalf of the department overdue tax debts and the collection fee imposed by this chapter."

B.     The 'Overdue Tax Debt Collection Act' as added by this section applies for all tax debts incurred before which remain outstanding on December 1, 2002, and to all tax debts incurred on or after December 1, 2002.

SECTION    39.    A.        Article 7, Chapter 4, Title 61 of the 1976 Code is amended by adding:

"Section 61-4-725.    Notwithstanding any other provision of law, a licensed winery located in a county or municipality that has conducted a favorable referendum under the provisions of Section 61-6-2010, during those same hours authorized by permits issued under Section 61-6-2010, may sell, possess, and permit the consumption of wine on the premises."

B.     This section takes effect July 1, 2005.

SECTION    40.    Section 6-1-320(A) of the 1976 Code is amended to read:

"(A)    Notwithstanding Section 12-37-251(E), a local governing body may increase the millage rate imposed for general operating purposes above the rate imposed for such purposes for the preceding tax year only to the extent of the increase in the consumer price index for the in the average of the twelve monthly consumer price indexes for the most recent twelve-month period consisting of January through December of the preceding calendar year. However, in the year in which a reassessment program is implemented, the rollback millage, as calculated pursuant to Section 12-37-251(E), must be used in lieu of the previous year's millage rate."

SECTION    41.    Section 12-6-40(A)(1) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:

"(1)(a)    Except as otherwise provided, 'Internal Revenue Code' means the Internal Revenue Code of 1986, as amended through December 31, 2002 2004, and includes the effective date provisions contained in it.

(b)    For purposes of sections 63 and 179 of the Internal Revenue Code, the amendments made by sections 103 and 202 of the Jobs and Growth Tax Relief Reconciliation Act of 2003, P.L. 108-27 (May 28, 2003) are effective only for taxable years beginning after December 31, 2003."

SECTION    42.    Section 12-6-50 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:

"Section 12-6-50.    For purposes of this chapter title and all other titles which provide for taxes administered by the department, except as otherwise specifically provided, the following Internal Revenue Code Sections are specifically not adopted by this State:

(1)    Sections 1(a) through 1(e), 3, 11, and 1201 relating to federal tax rates;

(2)    Sections 22 through 53, 515, 853, 901 through 908, and 960 relating to tax credits;

(3)    Sections 55 through 59 relating to minimum taxes;

(4)    Sections 78, 86, 87, 168(k), 196, and 280C relating to dividends received from certain foreign corporations by domestic corporations, taxation of social security and certain railroad retirement benefits, the alcohol fuel credit, bonus depreciation, deductions for certain unused business credits, and certain expenses for which credits are allowable;

(5)    Sections 72(m)(5)(B), 72(f), 72(o), 72(q), and 72(t), relating to penalty taxes on certain retirement plan distributions;

(6)    Section 172(b)(1) relating to net operating loss carrybacks;

(7)    Section 199 relating to the deduction attributable to domestic production activities;

(8)    Sections 531 through 564 relating to certain special taxes on corporations;

(8)(9)    Sections 581, 582, and 585 through 596 relating to the taxation of banking institutions;

(9)(10)    Sections 665 through 668 relating to taxation of certain accumulation distributions from trusts;

(10)(11)    Sections 801 through 845 relating to taxation of insurance companies;

(11)(12)    Sections 861 through 908, 912, 931 through 940, and 944 through 989 relating to the taxation of foreign income;

(13)    Sections 1352 through 1359 relating to an alternative tax on qualifying shipping activities;

(12)(14)    Sections 1401 through 1494;

(13)(15)    Sections 1501 through 1505 relating to consolidated tax returns; and

(14)(16)    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."

SECTION    43.    Section 12-6-1110 of the 1976 Code is amended to read:

"Section 12-6-1110.    (A)    For South Carolina income tax purposes, gross income, adjusted gross income, and taxable income as calculated under the Internal Revenue Code are modified as provided in this article and subject to allocation and apportionment as provided in Article 17 of this chapter.

(B)    If a taxpayer has made an election pursuant to Internal Revenue Code Section 1354 to be taxed under the provisions of Section 1352-1359 of the Internal Revenue Code, Election to Determine Taxable Income from Certain International Shipping Activities, the election is not effective for South Carolina income tax purposes, and the taxpayer is taxed in accordance with this chapter as though no federal Section 1354 election has been made."

SECTION    44.    A.        Section 12-6-1130(2) of the 1976 Code is amended to read:

"(2)    The deduction for taxes permitted by Internal Revenue Code Section 164 is computed in the same manner as provided in Section 164 except there is no deduction for state and local income taxes, or state and local franchise taxes measured by net income, or any other income taxes, or any taxes measured by or with respect to net income, or state or local sales or use taxes."

B.     Section 12-6-1130 of the 1976 Code, as amended by Act 363 of 2002, is further amended by adding an appropriately numbered item at the end to read:

"( )    Adjusted gross income and taxable income are computed without the deduction allowed pursuant to Internal Revenue Code Section 199 relating to domestic production activities."

SECTION    45.    Section 12-6-1140(8) of the 1976 Code is amended to read:

"(8)    RESERVED.    the portion of premiums not deductible pursuant to Internal Revenue Code Section 162(l) because the "applicable percentage" as defined in that section is less than one hundred percent."

SECTION    46.    A.        Section 12-6-2220(2) of the 1976 Code is amended to read:

"(2)    Dividends received from corporate stocks owned not connected with the taxpayer's business, less all related expenses, are allocated to the state of the corporation's principal place of business as defined in Section 12-6-30(9) or the domicile of an individual taxpayer."

B.     Section 12-6-2220(2) of the 1976 Code, as amended by this section, applies for taxable years beginning after 2004.

SECTION    47.    The ultimate undesignated paragraph of Section 12-6-3360(M)(3) of the 1976 Code, as last amended by Act 168 of 2004, is further amended to read:

"Notwithstanding any other another provision of law, 'new job' includes jobs created by a taxpayer when the taxpayer hires more than five hundred full-time individuals:

(a)    at a manufacturing facility located in a county classified as least developed distressed;

(b)    immediately before their employment by the taxpayer, the individuals were employed by a company operating, as of the effective date of this paragraph, under Chapter 11 of the United States Bankruptcy Code; and

(c)    the taxpayer, as an unrelated entity, acquires as of July 10, 2002 March 12, 2004, substantially all of the assets of the company operating under Chapter 11 of the United States Bankruptcy Code."

SECTION    48.    A.        Section 12-6-3365(A) of the 1976 Code, as last amended by Act 172 of 2004, is further amended to read:

"(A)    A taxpayer creating and maintaining at least one hundred full-time new jobs, as defined in Section 12-6-3360(M), at a facility of a type identified in Section 12-6-3360(M) may petition, utilizing the procedure in Section 12-6-2320(B), for a moratorium on state corporate income or insurance premium taxes imposed pursuant to Section 12-6-530 or insurance premium taxes imposed pursuant to Title 38 for the ten taxable years beginning the first full taxable year after the taxpayer qualifies and ending either ten years from that year or the year when the taxpayer's number of full-time new jobs falls below one hundred, whichever is earlier. For purposes of insurance premium taxes, the petition pursuant to Section 12-6-2320(B) must be made to and approved by the director of the Department of Insurance."

B.     The amendment to Section 12-6-3365 of the 1976 Code in this section does not affect its repeal as provided in Section 3 of Act 277 of 2000.

SECTION    49.    A.        Section 12-6-3480 of the 1976 Code is amended to read:

"Section 12-6-3480.    (A)    Notwithstanding any other provision of law:

(1)    Any credits under Title 38 may be applied against any taxes imposed under this chapter or license fees imposed under Chapter 20 of this title.

(2)    Any credits under this chapter or Chapter 14 of this title which are earned by one member of a controlled group of corporations a corporation included in a consolidated corporate income tax return under Section 12-6-5020 may must be used and applied against the consolidated tax, unless otherwise specifically provided by that member and by any other members of the controlled group of corporations.

(3)    Any limitations upon the total amount of liability for taxes or license fees that can be reduced by the use of a credit must be computed one credit at a time before any other another credit is used to reduce any remaining tax or license fee liability under this chapter or Chapter 20 of this title. Subject to item (4), The taxpayer may apply any credits arising under this chapter or Chapter 14 of this title in any order the taxpayer elects, and may apply a credit that is allowed for use against both taxes and license fees in any order, unless otherwise specifically provided, and against either one or both taxes and license fees in any given year, subject to specific limitations in the applicable credit statute and this item.

(4)    No credit amount may be used more than once, and all credits must be used, to the extent possible in any given year, first by the company that earned them, and second against the tax which generated them. Unless otherwise provided by law, a tax credit administered by the department must be used to the extent possible in the year it is generated and cannot be refunded.

(5)    As used in this section:,

(a)    the term "controlled group of corporations" has the same meaning as provided under Section 1563 of the Internal Revenue Code without regard to Section 1563(a)(4), (b)(2)(A), only with respect to corporations which are in existence for less than one-half the number of days in the tax year referred to therein, and (b)(2)(C) and (D);

(b)    the term 'tax credit' or 'credit' means a statutorily directed or authorized reduction in the tax liability made after any applicable tax rates are applied."

B.     Section 12-6-3480 of the 1976 Code, as amended by this section, applies for taxable years beginning after 2004.

SECTION    50.    A.        Section 12-6-4910(1)(d) of the 1976 Code is amended to read:

"(d)    a nonresident individual with South Carolina gross income greater than the personal exemption amount provided in Internal Revenue Code Section 151(d)."

B.     Section 12-6-4910(1)(d) of the 1976 Code, as amended by this section, applies for taxable years beginning after 2005.

SECTION    51.    A.        Section 12-6-5020(F) of the 1976 Code is amended to read:

"(F)    If a corporation which files or is required to file a consolidated return is entitled to one or more income tax credits, including the carryover of unused credits from prior years, the income tax credits may must be determined on a consolidated basis. Limitations on credits which refer to the income or the income tax liability of a corporation are deemed to refer to the income or income tax liability of the consolidated group, and credits shall reduce the consolidated group's tax liability regardless of whether or not the corporation entitled to the credit contributed to the tax liability or of the consolidated group."

B.     Section 12-6-5020(F), as amended by this section, applies for taxable years beginning after 2004.

SECTION    52.    A.        Section 12-6-5030 of the 1976 Code is amended to read:

"Section 12-6-5030.    (A)    A partnership or 'S' Corporation may file a composite individual income tax return on behalf of the nonresident partners or shareholders that are individuals, or trusts, and or estates in which the income is taxed to the trust or estate, or the department may require that a partnership or 'S' Corporation file a composite individual income tax return on behalf of the nonresident partners or shareholders that are individuals, or trusts and estates in which the income is taxed to the trust or estate, provided that a nonresident partner or 'S' Corporation shareholder having taxable income within the jurisdiction of this State from sources other than the partnership or 'S' Corporation may not file as part of the composite return.

(B)(1)    A composite return is one which combines the separate South Carolina tax liabilities of the nonresident partners or shareholders and a single return for two or more taxpayers having the same tax year in which each participant's share of the partnerships or 'S' Corporation's taxable income or loss is separately computed and added together to arrive at the total tax due on the composite return. The partnership or 'S' Corporation may elect to determine each participant's tax due by one of the following methods:

(a)    compute the pro rata share of the standard deduction or itemized deductions, and personal exemption amount for each participant pursuant to Section 12-6-1720(2) in the same manner as if it was being separately reported; or

(b)    compute each participant's share of South Carolina income without regard to any deductions or exemptions.

(2)    The composite return is signed by a general partner or an authorized officer of the 'S' Corporation.

(C)    If there is not sufficient information to determine the separate liability or the state of residence, then no deduction is allowed for personal exemptions, individual itemized deductions, or standard deductions.

(D)(1)    A composite return may be filed even if some of the nonresident fiduciary and individual shareholders and partners eligible to participate in filing a composite return choose not to participate. Corporate taxpayers may not participate in a composite return.

(2)    A nonresident participating in the composite return that has South Carolina income from sources other than the entity filing the composite return is required to file appropriate returns and make payment of all South Carolina taxes required by law. Taxes paid for the nonresident with the composite return shall reduce taxes due at the time the nonresident subject to this subitem files a separate return for the tax year reporting South Carolina income from all sources. The entity shall furnish to each nonresident a written statement as required by Section 12-8-1540(A) as proof of the amount that has been paid by the partnership or 'S' corporation as estimated payments for the nonresident and the amount paid for the nonresident with the composite return.

(E)(D)    The department may establish procedures or promulgate rules and promulgate regulations necessary to carry out the provisions of this section."

B.     Section 12-6-5030 of the 1976 Code, as amended by this section, applies for taxable years beginning after 2004.

SECTION    53.    A.        Subsections (A) and (D)(3) of Section 12-8-520 of the 1976 Code are amended to read:

"(A)    An employer paying wages at the rate of eight hundred dollars or more a year to an employee shall withhold income tax for that employee if at the time of payment the wages are expected to equal one thousand dollars or more during the year, except as provided in (C), using the tables and rules promulgated by the department.

(3)    for personal services performed on occasional, sporadic, or casual visits to in this State by nonresident employees in connection with their regular employment outside of this State; when the gross South Carolina wages are equal to or less than the personal exemption amount provided in Internal Revenue Code Section 151(d) as defined in Section 12-6-40. However, this item does not apply to employees performing construction, installation, engineering, or similar services are considered to have earned wages in this State if where the situs of the job is in this State;"

B.     Subsections (A) and (D)(3) of Section 12-8-520 of the 1976 Code, as amended by this section, apply for taxable years beginning after 2005.

SECTION    54.    A.        Section 12-8-1520(A)(2) of the 1976 Code is amended to read:

"(2)    If a resident withholding agent is required under the Internal Revenue Code to deposit withheld funds at a financial institution, then the withholding agent shall deposit the funds required to be withheld under this chapter at a financial institution selected by the State Treasurer, unless otherwise instructed by the department."

B.     Section 12-8-1520 of the 1976 Code is amended by adding at the end:

"(D)    Any withholding agent making at least twenty-four payments in a year must do so as provided in Section 12-54-250."

C.     Section 12-8-1520(A)(2) of the 1976 Code, as amended in subsection A of this section, takes effect July 1, 2005. The amendment to Section 12-8-1520 in the 1976 Code in subsection (B) of this section applies for payments due after January 1, 2006.

SECTION    55.    Section 12-10-105 of the 1976 Code, as added by Act 334 of 2002, is amended to read:

"Section 12-10-105.    In addition to the application fee provided in Section 12-10-100, an additional annual fee of one thousand dollars must be remitted by those qualifying businesses receiving claiming in excess of ten thousand dollars of job development credits or in excess of ten thousand dollars in job retraining credits in one calendar year . to the department The fee is due for each project that is subject to a revitalization or retraining agreement that exceeds ten thousand dollars in one calendar year and must be remitted to the Department of Revenue to be used to reimburse the department of Revenue for costs incurred auditing reports required pursuant to Section 12-10-80(A). The fee becomes due at the time the single project's claims for job development credits or job retraining credits exceeds ten thousand dollars for that calendar year."

SECTION    56.    A.        Subsections (B)(1) and (C) of Section 12-20-105 of the 1976 Code, as last amended by Act 69 of 2003, are further amended to read:

"(1)    To be considered an eligible project for purposes of this section, the project must qualify for income tax credits under Chapter 6 of Title 12, withholding tax credit under Chapter 10 of Title 12, income tax credits under Chapter 14 of Title 12, or fees in lieu of property taxes under either Chapter 12 of Title 4, Chapter 29 of Title 4, Chapter 37 of Title 12, or Chapter 44 of Title 12.

(C)    For the purpose of this section, 'infrastructure' means improvements for water, sewer, gas, steam, electric energy, and communication services made to a building or land that are considered necessary, suitable, or useful to an eligible project. These improvements include, but are not limited to:

(1)    improvements to both public or private water and sewer systems;

(2)    improvements to both public or private electric, natural gas, and telecommunications systems including, but not limited to, ones owned or leased by an electric cooperative, electric utility, or electric supplier, as defined in Chapter 27, Title 58;

(3)    fixed transportation facilities including highway, road, rail, water, and air;

(4)    for a qualifying project under subsection (B)(2), infrastructure improvements include industrial shell buildings and the purchase of land for an office, business, commercial, or industrial park which is owned or constructed by a county or political subdivision of this State."

B.     Subsections (B)(1) and (C) of Section 12-20-105 of the 1976 Code, as amended by this section, apply for taxable years beginning after 2004.

SECTION    57.    Section 12-21-1090 of the 1976 Code is amended to read:

"Section 12-21-1090.    The department shall may promulgate rules and regulations for the payment and collection of the taxes levied by this article. The administrative provisions of Section 12-21-2870, wherever applicable, are hereby adopted for the administration and enforcement of the provisions of this article."

SECTION    58.    A.        Section 12-21-6550 of the 1976 Code is amended to read:

"Section 12-21-6550.    In order to obtain the amounts provided in Sections 12-21-6530 and 12-21-6540:

(A)    The county or municipality in which the major tourism or recreation facility or major tourism or recreation area is located must file with the Department of Parks, Recreation and Tourism a certification application. The Department of Parks, Recreation and Tourism shall review the application for completeness and accuracy and if necessary contact the county or municipality for additional information. A separate certification application must be filed for each tourism or recreation facility located in a tourism or recreation area. The certification application must be filed within one year of the end of the investment period.

(B)    When the application is complete, the Department of Parks, Recreation and Tourism shall forward the application on to the department. The department must shall notify the county or the municipality, in writing, if the certification application has been approved.

(B)(C)    A tourism or recreation facility for which a certification application has been filed must request a determination from the council as to the status of the tourism or recreation facility. The council must classify each tourism or recreation facility as a new tourism or recreation facility or an expansion to an existing tourism or recreation facility. If a tourism or recreation facility is classified as an expansion to an existing tourism or recreation facility, Section 12-21-6580 applies. The request for determination of classification must be included in the certification application. The department must forward a copy of the request to the council for its determination."

B.     This section takes effect July 1, 2005.

SECTION    59.    Section 12-28-740(3)(b) of the 1976 Code is amended to read:

"(b)    by application for a refund or credit against its liabilities otherwise arising under this chapter, if the purchase is charged to a credit card issued to an eligible government entity, the issuer of the card elects to be the ultimate vendor, and the federal agency is billed without the user fee;"

SECTION    60.    Subsections (C) and (F) of Section 12-28-1730 of the 1976 Code are amended to read:

"(C)    Reserved.    The department shall impose a civil penalty on the operator of a vehicle of two hundred dollars for the initial occurrence in each calendar year of a violation of the prohibition of use of dyed motor fuel subject to the user fee on the public highways of this State. Each subsequent offense in a calendar year is subject to a civil penalty of five thousand dollars.

(F)    The department shall impose a civil penalty in an amount equivalent to that imposed by Section 6715 of the Internal Revenue Code on the operator of a vehicle who knowingly violates the prohibition on the sale or use of dyed fuel upon public highways of this State. The department shall impose a civil penalty in the amount of one thousand dollars or ten dollars for each gallon of dyed fuel involved, whichever is greater, on the operator of a vehicle that is used on the highways of this State, or is authorized or otherwise allowed to be used on the highways of this State, and who uses dyed fuel for the propulsion of that vehicle or who stores dyed fuel to be used for the propulsion of a vehicle on the highways of this State, regardless of whether any of such dyed fuel is used for a nontaxable purpose, unless permitted to do so under federal law.

For purposes of this section, the operator is the person responsible for the management and operation of the vehicle, whether as owner, lessee, or other party."

SECTION    61.    Section 12-36-530 of the 1976 Code is amended to read:

"Section 12-36-530.    Retailers, after closing or selling a business, must return the retail license to the department for cancellation and remit any unpaid or accrued taxes. The department may refuse to issue a new retail license to any person who has failed to comply with the provisions of this section.

In the case of sale of any business the tax is considered to be due at the time of the sale of the fixtures and equipment incident to the business and constitutes a lien against the stock of goods and the fixtures and equipment in the hands of the purchaser, or any other third party, until the tax is paid. The department may not issue a retail license to continue or conduct the business to the purchaser until all taxes due the State have been settled and paid."

SECTION    62.    Section 12-36-1310(B) of the 1976 Code, as last amended by Act 334 of 2002, is further amended to read:

"(B)    The use tax imposed by this article also applies to the:

(1)    gross proceeds accruing or proceeding from the business of providing or furnishing any a laundering, dry cleaning, dyeing, or pressing service, but does not apply to the gross proceeds derived from coin operated laundromats and dry cleaning machines;

(2)    gross proceeds accruing or proceeding from the sale of electricity;

(3)(a)    gross proceeds accruing or proceeding from the charges for the ways or means for the transmission of the voice or messages, including the charges for use of equipment furnished by the seller or supplier of the ways or means for the transmission of the voice or messages. Gross proceeds from the sale of prepaid wireless calling arrangements subject to tax at retail pursuant to item (5) of this subsection are not subject to tax pursuant to this item. Effective for bills rendered after August 1, 2002, charges for mobile telecommunications services subject to the tax under this item must be sourced in accordance with the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code. The term 'charges for mobile telecommunications services' is defined for purposes of this section the same as it is defined in the Mobile Telecommunications Sourcing Act. All other definitions and provisions of the Mobile Telecommunications Sourcing Act as provided in Title 4 of the United States Code are adopted;

(b)(i)    for purposes of this item, a 'bundled transaction' means a transaction consisting of distinct and identifiable properties or services, which are sold for one nonitemized price but which are treated differently for tax purposes:

(ii)    for bills rendered on or after January 1, 2004, that include telecommunications services in a bundled transaction, if the nonitemized price is attributable to properties or services that are taxable and nontaxable, the portion of the price attributable to any nontaxable property or service is subject to tax unless the provider can reasonably identify that portion from its books and records kept in the regular course of business for purposes other than sales taxes.

(4)    fair market value of tangible personal property brought into this State, by the manufacturer thereof, for storage, use, or consumption in this State by the manufacturer.

(5)    gross proceeds accruing or proceeding from the sale or recharge at retail for prepaid wireless calling arrangements.

(a)    'Prepaid wireless calling arrangements' means communication services that:

(i)        are used exclusively to purchase wireless telecommunications;

(ii)    are purchased in advance;

(iii)    allow the purchaser to originate telephone calls by using an access number, authorization code, or other means entered manually or electronically; and

(iv)    are sold in units or dollars which decline with use in a known amount.

(b)    All charges for prepaid wireless calling arrangements must be sourced to the:

(i)        location in this State where the over-the-counter sale took place;

(ii)    shipping address if the sale did not take place at the seller's location and an item is shipped; or

(iii)    either the billing address or location associated with the mobile telephone number if the sale did not take place at the seller's location and no item is shipped."

SECTION    63.    Section 12-36-2120 of the 1976 Code, as amended by Act 69 of 2003, is further amended by adding an appropriately numbered item at the end to read:

"( )    prescription and over-the-counter medicines and medical supplies, including diabetic supplies, diabetic diagnostic equipment, and diabetic testing equipment, sold to a health care clinic that provides medical and dental care without charge to all of its patients."

SECTION    64.    A.        Section 12-36-2510 of the 1976 Code is amended to read:

"Section 12-36-2510.    (A)(1)    Notwithstanding other provisions of this chapter, when, in the opinion of the department, the nature of a taxpayers business renders it impracticable for the taxpayer to account for the sales or use taxes, as imposed by this chapter, at the time of purchase, the department may issue its certificate to the taxpayer authorizing the purchase at wholesale and the taxpayer is liable for the taxes imposed by this chapter with respect to the gross proceeds of sale, or sales price, of the property withdrawn, used or consumed by the taxpayer within this State. at its discretion, may issue or authorize for the efficient administration of the sales and use tax law any type of certificate allowing a taxpayer to purchase tangible personal property tax free and be liable for any taxes.

(2)    In addition to any other type of certificate the department considers necessary to issue, the department may issue at its discretion:

(a)    Direct Pay Certificate: a direct pay certificate allows its holder to make all purchases tax free and to report and pay directly to the department any taxes due. The holder of a direct pay certificate is liable for any taxes due. If an exemption or exclusion is not applicable, the tax is due upon the withdrawal, use, or consumption of the tangible personal property purchased with the certificate.

(b)    Exemption Certificate: an exemption certificate, as opposed to allowing its holder to make all purchases tax free, allows its holder to make only certain purchases tax free such as machinery, electricity, or raw materials. The holder of an exemption certificate is liable for any taxes due. If an exemption or exclusion is not applicable, the tax is due upon purchase, or upon the withdrawal, use, or consumption of the tangible personal property purchased with the certificate if the application of the exemption or exclusion cannot be determined at the time of purchase.

(B)    To reduce the complexity and administrative burden of transactions exempt from sales or use tax, the following provisions must be followed when a purchaser claims an exemption by use of an exemption certificate:

(1)    the seller shall obtain at the time of the purchase any information determined necessary by the department, including the reason the purchaser is claiming a tax exemption or exclusion;

(2)    the department, at its discretion, may utilize a system where the purchaser exempt from the payment of the tax is issued an identification number which must be presented to the seller at the time of the sale;

(3)    the seller shall maintain proper records of exempt or excluded transactions and provide them to the department when requested and in the form requested by the department.

(C)    A seller that complies with the provisions of this section is relieved from any tax otherwise applicable if it is determined that the purchaser improperly claimed an exemption or exclusion by use of a certificate, provided the seller fraudulently did not fail to collect or remit the tax, or both, or solicit a purchaser to participate in an unlawful claim of an exemption. The liability for any tax shifts to the purchaser who improperly claimed the exemption or exclusion by use of the certificate."

B.        This section takes effect October 1, 2005.

SECTION    65.    Items (5) and (8) of Section 12-37-220(B) of the 1976 Code are amended to read:

"(5)    All property of the American Legion, the Veterans of Foreign Wars, the Spanish American War Veterans, the Disabled American Veterans, and Fleet Reserve Association or any similar Veterans Organization chartered by the Congress of the United States, whether belonging to the department or to any of the Posts in this State when used exclusively for the purpose of such organization and not used for any purpose other than club rooms, offices, meeting places or other activities directly in keeping with the policy stated in the National Constitution of such organization, and such property is devoted entirely to its own uses and not held for 'pecuniary profit'. For the purposes of this item 'pecuniary profit' refers to income received from the sale of alcoholic beverages to persons other than bona fide members and their bona fide guests, or any income, any part of which inures to the benefit of any private individual. Where any structure or parcel of land is used partly for the purposes of such organization and partly for such pecuniary profits, the area for pecuniary profits shall be assessed separately and that portion shall be taxed.

(8)    Properties of whatever nature or kind owned within the State and used or occupied by the Palmetto Junior Homemakers Association, the New Homemakers of South Carolina, the South Carolina Association of Future Farmers of America and the New Farmers of South Carolina, so long as such properties are used exclusively to promote vocational education or agriculture, better business methods and more effective organization for farming or to encourage thrift or provide recreation for persons studying agriculture or home economics in the public schools."

SECTION    66.    A.        Subsections (a) and (b) of Section 12-54-42 of the 1976 Code are amended to read:

"(a)    An employer A person who fails to comply with the provisions of Section 12-8-1540, requiring the furnishing of a withholding statement to employees is subject to a penalty of not less than one hundred dollars nor more than one thousand dollars for each violation.

(b)    An employer A person who fails to comply with the provisions of Section 12-8-540(A)(1) 12-8-1550, requiring the filing of withholding statements with the department is subject to a penalty of not less than one hundred dollars nor more than two thousand dollars for each violation."

B.     This section takes effect July 1, 2005.

SECTION    67.    A.        Section 12-54-43(I) of the 1976 Code is amended to read:

"(I)    A person:

(1)(a)    who files what purports to be a return of the tax imposed by a provision of law administered by the department but which:

(a)(i)    does not contain information on which the substantial correctness of the tax liability may be judged; or

(b)(ii)    contains information that on its face indicates the liability is substantially incorrect; and or

(b)    who files a claim, a protest, or document, other than a return, that contains information that on its face indicates its position is substantially incorrect; and

(2)    whose conduct is due to:

(a)    a position which is frivolous or groundless; or

(b)    a desire, which appears on the purported return, claim, protest, or document, to delay or impede the administration of state tax laws;

(3) is liable to a penalty of five hundred dollars for the first filing, twenty-five hundred dollars for the second filing, and five thousand dollars for each subsequent filing. This penalty is These penalties are in addition to all other penalties provided by law."

B.     Section 12-54-43 of the 1976 Code, as last amended by Act 89 of 2001, is further amended by adding an appropriately lettered subsection at the end to read:

"( )    If a purchaser uses a resale, wholesale, or an exemption certificate issued or authorized by the department to purchase tangible personal property tax free which the purchaser knows is not excluded or exempt from the tax under the provisions of Chapter 36 of this title, then the purchaser, in addition to any other penalties due under this title, is liable for a penalty of five percent of the amount of the tax if the failure is for not more than one month, with an additional five percent for each additional month or fraction of the month during which the failure continues, not exceeding fifty percent in the aggregate. The provisions of this section do not apply to direct pay certificates."

C.     Section 12-54-43(I) of the 1976 Code, as amended by subsection A. of this section, takes effect October 1, 2005. Section 12-54-43 of the 1976 Code, as amended by subsection B. of this section, takes effect July 1, 2005.

SECTION    68.    Section 12-54-90(A) of the 1976 Code is amended to read:

"(A)    When a person fails, neglects, violates, or refuses to comply with a provision of law or regulation administered by the department, the department, in its discretion, may refuse to issue a license to a taxpayer and may revoke one or more licenses held by the taxpayer. within ten days of notification in writing of the taxpayer's failure to comply. The notification may be served by certified mail or personally."

SECTION    69.    A.        Section 12-54-210(A) of the 1976 Code is amended to read:

"(A)    A person liable for a tax, license, fee, or surcharge administered by the department or for the filing of a return with the department, including information returns, required by this title shall keep books, papers, memoranda, records, render statements, make returns, and comply with regulations as the department prescribes. Persons failing to comply with the provisions of this section must be penalized in an amount to be assessed by the department not to exceed five hundred dollars for the period covered by the return in addition to other penalties provided by law."

B.     This section takes effect July 1, 2005.

SECTION    70.    A.    Items (11) and (12) of Section 12-54-240(B) of the 1976 Code are amended to read:

"(11)    disclosure of information contained on a return to the South Carolina Employment Security department Commission, Department of Revenue, or to the Department of the Treasury, Alcohol, and Tobacco Tax and Firearms Division Trade Bureau;

(12)(a)    disclosure to any state agency, county auditor, or county assessor of whether a resident or nonresident tax return was filed by any particular taxpayer.;

(b)    disclosure to any county auditor or county assessor of whether the four percent assessment pursuant to Section 12-43-220(c)(1) has been claimed by a taxpayer in any county."

B.     Section 12-54-240(B)(24) of the 1976 Code, as added by Act 69 of 2003, is further amended to read:

"(24)    disclosure of information pursuant to a subpoena issued by a federal grand jury or the State Grand Jury of South Carolina."

SECTION    71.    Section 12-58-185(A) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:

"(A)    The department, in its discretion, may accept installment payment payments for amounts due it for a period not to exceed one year from the date the payment was due originally. Interest accrues during the installment period, pursuant to Section 12-54-25. In addition, the department may extend the time for payment of an amount due it. An extension pursuant to this section may be granted only beyond one year if it is shown to the satisfaction of the department that the payment of the amount due it upon the date originally fixed for the payment will result in undue hardship to the taxpayer."

SECTION    72.    A.        Section 12-60-420 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:

"Section 12-60-420.    (A)    If a division of the department makes a division decision or determines there is a deficiency in a state or local tax administered by the department, it may send by first class mail or deliver the division decision or the proposed assessment to the taxpayer. The division decision or the proposed assessment must explain the basis for the division decision or the proposed assessment and state that assessment will be made or the decision will become final unless the taxpayer protests the division decision or the proposed assessment as provided in Section 12-60-450.

(B)    If the taxpayer fails to file a protest, the division decision or proposed assessment will become final and, if applicable, an assessment will be made for the amount of a proposed assessment. The department shall make available forms which taxpayers may use to protest the division decision or the proposed assessments. The division decision or the proposed assessment is effective if mailed to the taxpayer's last known address even if the taxpayer refuses or fails to take delivery, is deceased, or is under a legal disability, or, if a corporation, has terminated its existence. For a joint tax return or liability, one division decision or the proposed assessment may be mailed to both taxpayers unless the department has notice that the taxpayers have separate addresses in which event a duplicate original of the division decision or the proposed assessment must be sent to each taxpayer at his last known address."

B.     This section takes effect January 1, 2005.

SECTION    73.    Section 12-60-490 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:

"Section 12-60-490.    If a taxpayer is due a refund, the refund must be applied first against any amount of that same tax that is assessed and is currently due from the taxpayer. The remaining refund, if any, must then be applied against any other state taxes that have been assessed against the taxpayer and that are currently due, or offset as provided in Article 3, Chapter 54 Chapter 56 of this title, or offset to collect a debt pursuant to Section 12-4-580, or both. If any excess remains, the taxpayer must be refunded the amount plus interest as determined in Section 12-54-25, or, at the taxpayer's request, it may be credited to future tax liabilities."

SECTION    74.    A.        Section 61-4-747(C)(4) of the 1976 Code, as added by Act 40 of 2003, is amended to read:

"(4)    annually, by August thirty-first January twentieth of each year, pay to the department all sales taxes and excise taxes due on sales to residents of this State in the preceding calendar year, the amount of the taxes to be calculated as if the sale were in this State at the location where delivery is made;"

B.     Section 61-4-747(C)(4) of the 1976 Code, as amended by this section, applies for reports due after 2005.

SECTION    75.    A.        Article 4, Chapter 14, Title 33 of the 1976 Code is amended by adding:

"Section 33-14-420.    Notwithstanding another provision of this title, a claimant may not commence a suit or other proceeding against a former shareholder of a dissolved corporation for any known or unknown claim arising from the liabilities of the corporation, acts or omissions of the corporation, or acts committed in its name if the corporation filed its articles of dissolution with the Secretary of State before January 1, 1989, or was otherwise judicially or administratively dissolved before January 1, 1989. Further, a claimant may not satisfy a judgment rendered against a dissolved corporation by proceeding against or joining an individual shareholder if the corporation filed its articles of dissolution with the Secretary of State before January 1, 1989, or was otherwise judicially or administratively dissolved before January 1, 1989."

B.     This section takes effect upon approval of the Governor, and applies to corporations dissolved before, on, or after the effective date of this section.

SECTION    76.    If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

SECTION    77.    This act takes effect upon approval by the Governor and the provisions of Section 12-43-365 of the 1976 Code as added by this act apply for the valuation of golf courses for purposes of property tax as golf courses are valued in countywide assessment and equalization programs implemented after 2005.

This web page was last updated on Tuesday, June 23, 2009 at 2:49 P.M.