South Carolina General Assembly
117th Session, 2007-2008

Download This Version in Microsoft Word format

Bill 91

Indicates Matter Stricken
Indicates New Matter


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

Indicates Matter Stricken

Indicates New Matter

AMENDED

May 16, 2007

S. 91

Introduced by Senators Campsen, Ritchie and Knotts

S. Printed 5/16/07--H.

Read the first time March 21, 2007.

            

A BILL

TO ENACT THE RESEARCH AND DEVELOPMENT TAX CREDIT REFORM ACT BY AMENDING SECTION 12-6-3415, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE CORPORATE INCOME TAX AND CORPORATE LICENSE TAX CREDIT ALLOWED TAXPAYERS CLAIMING A FEDERAL INCOME TAX CREDIT FOR RESEARCH ACTIVITY, SO AS TO ALLOW THE CREDIT AGAINST ANY INCOME TAX IMPOSED PURSUANT TO THE SOUTH CAROLINA INCOME TAX ACT.

Amend Title To Conform

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

SECTION    1.    A.        This section may be cited as the "Research and Development Tax Reform Act".

B.        Section 12-6-3415(A) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:

"(A)    A taxpayer that claims a federal income tax credit pursuant to Section 41 of the Internal Revenue Code for increasing research activities for the taxable year is allowed a credit against any tax due pursuant to Section 12-6-530 this chapter or Section 12-20-50 equal to five percent of the taxpayer's qualified research expenses made in South Carolina. For the purposes of this credit, qualified research expenses has the same meaning as provided for in Section 41 of the Internal Revenue Code."

C.        This section takes effect upon approval of this act by the Governor and applies for taxable years beginning after 2006.

SECTION    2.    A.    Chapter 14, Title 12 of the 1976 Code is amended by adding:

"Section 12-14-80.    (A)    There is allowed an economic impact zone tax credit pursuant to Section 12-14-60 for qualifying investments made by a manufacturer which:

(1)    is engaged in this State in at least one economic impact zone, as defined in Section 12-14-30(1), in an activity or activities listed under the North American Industry Classification System Manual (NAICS) Section 326;

(2)    is employing five thousand or more full-time workers in this State and having a total capital investment in this State of not less than eight hundred fifty million dollars; and

(3)    invests an additional three hundred fifty million dollars in this State before July 1, 2011.

(B)    A taxpayer that qualifies for the tax credit allowed by this section may claim the credit earned pursuant to this section and credits earned pursuant to Section 12-6-3360 in the manner provided pursuant to Sections 12-6-3360 and 12-14-60, or as a credit in an amount equal to not more than fifty percent of the employee's withholding on the taxpayer's quarterly withholding tax returns. To claim the credit against the employee's withholding, the taxpayer must be in compliance with its withholding tax and other taxes due to the State."

B.        This section takes effect July 1, 2007, and applies for capital investments placed in service outside of an economic impact zone after June 30, 2007, and for quarterly state withholding returns due on and after that date.

SECTION    3.    A.    Section 12-36-2120 of the 1976 Code, as last amended by Act 386 of 2006, is further amended by adding an appropriately numbered item at the end to read:

"( )    an amusement park ride and any parts, machinery, and equipment used to assemble, operate, and make up an amusement park ride or performance venue facility located in a qualifying amusement park or theme park and any related or required machinery, equipment, and fixtures located in the same qualifying amusement park or theme park.

(a)    To qualify for the exemption, the taxpayer shall meet the investment and job requirements provided in subsubitem (i) of subitem (b) over a five-year period beginning on the date of the taxpayer's first use of this exemption. The taxpayer shall notify the Department of Revenue of its intent to qualify and use this exemption and upon receipt of the notification, the department shall issue an appropriate exemption certificate to the taxpayer to be used for qualifying purposes under this item. Within six months after the fifth anniversary of the taxpayer's first use of this exemption, the taxpayer shall notify the department, in writing, that it has or has not met the investment and job requirements of this item. If the taxpayer fails to meet the investment and job requirements, the taxpayer shall pay to the State the amount of the tax that would have been paid but for this exemption. The running of the periods of limitations for assessment of taxes provided in Section 12-54-85 is suspended for this time period beginning with the taxpayer's first use of this exemption and ending with notice to the department that the taxpayer has or has not met the investment and job requirements of this item.

(b)    For purposes of this item:

(i)        'Qualifying amusement park or theme park' means a park that is constructed and operated by a taxpayer who makes a capital investment of at least two hundred fifty million dollars at a single site and creates at least two hundred fifty full-time jobs and five hundred part-time or seasonal jobs.

(ii)    'Related or required machinery, equipment, and fixtures' means an ancillary apparatus used for or in conjunction with an amusement park ride or performance venue facility, or both, including, but not limited to, any foundation, safety fencing and equipment, ticketing, monitoring device, computer equipment, lighting, music equipment, stage, queue area, housing for a ride, electrical equipment, power transformers, and signage.

(iii)    'Performance venue facility' means a facility for a live performance, nonlive performance, including any animatronics and computer-generated performance, and firework, laser, or other pyrotechnic show.

(iv)    'Taxpayer' means a single taxpayer or, collectively, a group of one or more affiliated taxpayers. An 'affiliated taxpayer' means a person or entity related to the taxpayer that is subject to common operating control and that is operated as part of the same system or enterprise. The taxpayer is not required to own a majority of the voting stock of the affiliate."

B.        Notwithstanding the general effective date of this act, subsection A. of this section takes effect on the first day of the month succeeding the month in which this act is approved by the Governor.

SECTION    4.    A.    Section 11-45-30(10) and (15) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:

"(10)    'Lender' means a banking institution subject to the income tax on banks under Chapter 11 of Title 12, an insurance company subject to a state premium tax liability under pursuant to Chapter 7 of Title 38, a captive insurance company regulated under pursuant to Chapter 90 of Title 38, a utility regulated under pursuant to Title 58, or any other person approved by the authority pursuant to guidelines and regulations established by the authority pursuant to Section 11-45-100 a financial institution with proven experience in state-based venture capital transactions.

(15)    'Designated investor group' means any a person who enters into a designated investor contract with the authority pursuant to Section 11-45-50.

(16)    'Interest' means interest on the outstanding balance owed or owing to a lender by a designated investor group under such calculations, terms, or conditions as determined by the authority, provided that the method of calculating interest may be included in the tax credit certificates to the extent that the authority considers the information necessary or appropriate."

B.        Section 11-45-50(B)(1) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:

"(1)    Each designated investor group selected pursuant to subsection (A)(3) of this section shall enter into a designated investor contract with the authority, which designated investor contract shall must contain those any investment guidelines and those other terms and conditions as the authority may deem considers necessary, advisable, or appropriate.

C.        Section 11-45-55(B) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:

"(B)    The authority shall issue tax credit certificates to each lender contemporaneously with each loan made pursuant to this chapter in accordance with any guidelines and regulations established by the authority pursuant to Section 11-45-100. These guidelines and regulations shall relate to and govern, among other things, The tax credit certificates must describe procedures for the issuance, transfer and redemption of the certificates, and related tax credits. These certificates shall state also must describe the amounts, year, and conditions for redemption of the tax credits reflected on the certificates. Once a loan is made by a lender, the certificate issued to the lender shall be binding on the authority and this State and may not be modified, terminated, or rescinded."

D.        Section 11-45-70(2)(a) of the 1976 Code, as last amended by Act 125 of 2005, is further amended to read:

"(a)    While each designated investor group shall give preference to investors, otherwise qualified, that agree to maintain either a headquarters or an office staffed by an investment professional in South Carolina, investments may be made with investors not principally located in South Carolina; provided, that if the investors are otherwise qualified under pursuant to this chapter and, together with related companies, have other venture capital investments in South Carolina or in South Carolina based companies or can provide evidence to the authority of prior investments in South Carolina or South Carolina based companies at least equal to the total amount of monies placed with that investor by the designated investor group."

SECTION    5.    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 act, 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    6.    Except as otherwise provided elsewhere in this act, this act takes effect upon approval by the Governor.

----XX----

This web page was last updated on Monday, June 22, 2009 at 3:10 P.M.