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March 15, 2007
S. Printed 3/15/07--S.
Read the first time February 13, 2007.
To whom was referred a Bill (S. 422) to amend Section 12-43-220, as amended, Code of Laws of South Carolina, 1976, relating to valuation and classification of property for purposes of the property tax, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass with amendment:
Amend the bill, as and if amended, SECTION 1, page 2, by striking line 3 and inserting:
/ (C) not rented for more than ninety days in a calendar year.
The assessor may require a copy of Schedule E from the applicant's federal return for the applicable tax year." /
Amend the bill further, as and if amended, by adding an appropriately numbered SECTION to read:
/ SECTION ___. Section 12-54-240(B) of the 1976 Code is amended by adding an appropriately numbered item at the end to read:
/ ( ) verification that the federal Schedule E filed with the department is the same as the Schedule E required by the assessor pursuant to Section 12-43-220(C). /
Renumber sections to conform.
Amend title to conform.
HUGH K. LEATHERMAN, SR. for Committee.
REVENUE IMPACT 1/
This bill is not expected to impact state revenues. Local property taxes would be reduced by an estimated $230,000 as a result of homes currently receiving a 6.0% assessment ratio getting the 4.0% owner-occupied assessment ratio. Expenditures from the Homestead Exemption Fund will be increased by $370,000 in FY 2007-08 to reimburse these additional homes that will qualify for the 4.0% assessment ratio.
Under current law, owner occupied homes are assessed at 4.0% for property tax purposes. All other homes are assessed at 6.0% for property tax purposes. Also, under current law, an owner-occupied home can be rented out for less than fifteen days and still get the 4.0% assessment ratio. This bill would allow the home to keep the 4.0% assessment ratio if it is not rented for more than ninety days in a calendar year. This bill applies to property tax years beginning after 2004. Homes that will now qualify for the 4.0% assessment ratio because of this bill will be eligible for refunds or credits for property taxes paid in 2005 and 2006. Based on conversations with the Charleston County Assessor's Office and other county offices, we estimate local property taxes will be reduced by $230,000 as a result of homes currently receiving a 6.0% assessment ratio getting the 4.0% owner-occupied assessment ratio. Expenditures from the Homestead Exemption Fund will be increased by $370,000 in FY 2007-08 to reimburse these additional homes that will qualify for the 4.0% assessment ratio.
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact by the BEA, or Section 2-7-76 for a local revenue impact or Section 6-1-85(B) for an estimate of the shift in local property tax incidence by the Office of Economic Research.
TO AMEND SECTION 12-43-220, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO VALUATION AND CLASSIFICATION OF PROPERTY FOR PURPOSES OF THE PROPERTY TAX, SO AS TO PROVIDE THAT THE OWNER-OCCUPANT OF RESIDENTIAL PROPERTY QUALIFIES FOR THE SPECIAL FOUR PERCENT ASSESSMENT RATIO ALLOWED OWNER-OCCUPIED RESIDENTIAL PROPERTY IF THE OWNER HAS MADE THE PROPER CERTIFICATE TO THE COUNTY ASSESSOR AND THE RESIDENCE IS THE OWNER'S ADDRESS ON THE OWNER'S SOUTH CAROLINA DRIVER'S LICENSE OR VOTER REGISTRATION CARD, IS THE ADDRESS ON THE OWNER'S PERSONAL PROPERTY TAX NOTICES, AND THE RESIDENCE IS NOT RENTED FOR MORE THAN NINETY DAYS A YEAR, AND TO DELETE OTHER REFERENCES TO RENTAL OF THESE RESIDENCES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. A. Section 12-43-220(c)(2)(iv) of the 1976 Code is amended by adding a new paragraph before the last undesignated paragraph to read:
"If the owner or the owner's agent has made a proper certificate as required pursuant to this subitem and the owner is otherwise eligible, the owner is deemed to have met the burden of the proof and is allowed the four percent assessment ratio allowed by this item if the residence that is the subject of the application is:
(A) listed as the owner's address on either the owner's South Carolina voter registration card or South Carolina driver's license;
(B) the address listed for the owner's personal property tax notices; and
(C) not rented for more than ninety days in a calendar year."
B. Section 12-43-220(c) of the 1976 Code, as last amended by Act 145 of 2005, is further amended by deleting subitem (7) which reads:
"(7) Notwithstanding any other provision of law, the owner-occupant of a legal residence is not disqualified from receiving the four percent assessment ratio allowed by this item if the taxpayer's residence meets the requirements of Internal Revenue Code Section 280A(g) as defined in Section 12-6-40(A) and the taxpayer otherwise is eligible to receive the four percent assessment ratio."
C. The amendments to Section 12-43-220(c)(2) and (7) contained in this section apply for property tax years beginning after 2004.
D. A taxpayer allowed the special four percent assessment ratio for property tax year 2005 or 2006, or both of these years because of the amendments to Section 12-43-220(c) of the 1976 Code as contained in this section, in lieu of other provisions of law applicable for refunds of overpayments of property taxes, and upon application to the county assessor must either:
(1) receive a refund of the overpayment, together with applicable interest or, at the taxpayer's election;
(2) be allowed a credit in the same amount as the refund pursuant to item (1) against future property taxes due on the residence.
A claim for refund made pursuant to this subsection before July 1, 2009, is deemed timely filed.
SECTION 2. Except where otherwise stated, this act takes effect upon approval by the Governor.
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