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Indicates Matter Stricken
Indicates New Matter
HOUSE AMENDMENTS AMENDED
May 31, 2007
S. 91
S. Printed 5/31/07--S.
Read the first time January 9, 2007.
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 two billion dollars; and
(3) has invested five hundred million dollars in capital investment in this State between January 1, 2006 and 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. The taxpayer must elect to take the credit either as an income tax or a withholding tax credit but not both. A taxpayer must first take the credits as an income tax credit in a year in which the taxpayer has a corporate income tax liability. The withholding tax credit may be taken only when the taxpayer has used the maximum investment tax credit allowed against the corporate income tax for that year. The withholding credit may only be taken for qualifying investments made or placed in service after July 1, 2007. 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, provided that for the period July 1, 2007 to June 30, 2008, a taxpayer using this section many not reduce its state withholding tax to less than the withholding tax remitted for the period June 30, 2006, to July 1, 2007.
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, pursuant to guidelines established by the Authority. Both the guidelines and the lender must be approved by the Budget and Control Board.
(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. The form of the tax credit certificate must be approved by the Budget and Control Board."
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."
E. Chapter 45, Title 11 of the 1976 Code is amended by adding:
"Section 11-45-105. Any guideline issued by the authority pursuant to this chapter must be approved by the Budget and Control Board."
SECTION 5. Section 11-35-40(2) of the 1976 Code, as last amended by Act 376 of 2006, is amended to read:
"(2) Application to State Procurement. This code applies to every procurement or expenditure of funds by this State under contract acting through a governmental body as herein defined irrespective of the source of the funds, including federal assistance monies, except as specified in Section 11-35-40(3) (Compliance with Federal Requirements) and except that this code does not apply to gifts, to the issuance of grants, or to contracts between public procurement units, except as provided in Article 19 (Intergovernmental Relations). It shall also apply to the disposal of state supplies as provided in Article 15 (Supply Management). No state agency or subdivision thereof may sell, lease, or otherwise alienate or obligate telecommunications and information technology infrastructure of the State by temporary proviso and unless provided for in the general laws of the State."
SECTION 6.A. Article 13, Chapter 60, Title 12 is amended by adding:
"Section 12-60-3312. Except as otherwise provided by law or proper judicial order, all proceedings and records of a contested case hearing of the Administrative Law Court of a matter covered by the South Carolina Revenue Procedures Act are open to the public."
B. This section takes effect upon approval by the Governor and applies to all tax decisions and associated information filed of record, whether or not the decision in the contested case hearing was issued before, on, or after that date.
SECTION 7.A. Section 6-34-40(C)(3) and (5) of the 1976 Code, as added by Act 285 of 2006, 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 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.
(5) The South Carolina Department of Revenue shall may promulgate regulations to verify the site's eligibility in accordance with the provisions of this chapter."
B. This section takes effect upon approval by the Governor and Subsection (C)(3) applies for rehabilitation expenses for eligible sites placed in service after June 30, 2006.
SECTION 8. Section 12-2-20 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-2-20. As used in this title and in other titles which that provide for taxes administered by the department, and unless otherwise required by the context, the term:
(1) 'person' includes an any individual, a trust, estate, partnership, receiver, association, company, limited liability company, corporation, or any other entity or group; and
(2) 'individual' means a human being."
SECTION 9. Section 12-6-40(C) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(C) If a taxpayer complies with the provisions of Internal Revenue Code Section 367 (Foreign Corporations), it is not necessary for the taxpayer to obtain the approval of the department. The A taxpayer filing a paper return shall attach a copy of the approval received from the Internal Revenue Service to its next South Carolina income tax return. A taxpayer filing an electronic return shall keep a copy of the approval with his tax records."
SECTION 10.A. Section 12-6-545(E)(1) of the 1976 Code, as last amended by Act 386 of 2006, is further amended to read:
"(1) Notwithstanding item (A)(1)(ed) of this section, if a taxpayer owns an interest in one or more pass-through businesses that have a total gross income of less than one million dollars and taxable income of less than one hundred thousand dollars and his total South Carolina taxable income from pass-through entities for which he performs personal services is one hundred thousand dollars or less, excluding capital gains and losses, then the taxpayer may elect, instead of determining the actual amount of active trade or business income related to his personal services, to treat fifty percent of his active trade or business income as not related to his personal services. For purposes of this item, the term taxpayer 'taxpayer' includes both taxpayers who file a joint return."
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
SECTION 11.A. Section 12-6-1140(10) of the 1976 Code, as last amended by Act 242 of 2006, is further amended to read:
"(10)(a) a deduction calculated as provided in this item for a volunteer firefighter, rescue squad member, volunteer member of a Hazardous Materials (HAZMAT) Response Team, reserve police officer, Department of Natural Resources deputy enforcement officer, or member of the State Guard not otherwise eligible for this exemption.
(b) An individual may receive only one deduction pursuant to this item. The Board of Economic Advisors annually shall estimate a maximum deduction that may be permitted under this section for a taxable year based on an individual income tax revenue loss of three million one hundred thousand dollars attributable to this deduction and shall certify that maximum deduction to the Department of Revenue and for the applicable taxable year, the maximum deduction amount must not exceed the lesser of the certified estimate or three thousand dollars.
(c)(i) Only a volunteer earning a minimum number of points pursuant to Section 23-9-190 is eligible for this deduction unless otherwise provided in this item.
(ii) In the case of a reserve police officer and in lieu of minimum points determining eligibility, this deduction is allowed only if the reserve police officer's coordinator-supervisor certifies in writing to the officer that the officer met all requirements of Chapter 28, Title 23 applicable to a reserve police officer for the entire taxable year.
(iii) In the case of a Department of Natural Resources deputy enforcement officer and in lieu of minimum points determining eligibility, this deduction is allowed only if the deputy enforcement officer's supervisor certifies in writing to the officer that the officer met all requirements of Section 50-3-315 for the entire taxable year.
(iv) In the case of a member of the State Guard and in lieu of minimum points determining eligibility, this deduction is allowed only if the State Guard member completes a minimum of sixteen hours of training or drill each month, equating to one hundred ninety-two hours a year, and the member's commanding officer certifies in writing to the member that the member met these requirements.
(d) These certifications from supervisors of taxpayers claiming the deduction must be on a form approved by the Department of Revenue that must be filed with the officer's or member's tax return for the exemption to be claimed department. The department may require a copy of the certification be attached to the taxpayer's income tax return or otherwise be made available to the department."
B. This section takes effect upon approval by the Governor and applies to taxable years beginning after 2005.
SECTION 12.A. Section 12-6-3360(H) of the 1976 Code, as last amended by Act 277 of 2000, is further amended to read:
"(H) A credit claimed under pursuant to this section but not used in a taxable year may be carried forward for fifteen years from the taxable year in which the credit is earned by the taxpayer. Credits which that are carried forward must be used in the order earned and before jobs credits claimed in the current year. A taxpayer who earns credits allowed by this section and who also is eligible for the moratorium provided in Section 12-6-3365 3367 may claim the credits and may carry forward unused credits beginning after the moratorium period expires."
B. This section takes effect upon approval by the Governor and applies to taxable years beginning after 2005.
SECTION 13.A. Section 12-6-3360(M)(1) of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"(1) 'Taxpayer' means a sole proprietor, partnership, corporation of any classification, limited liability company, or association taxable as a business entity that is subject to South Carolina taxes as contained in Sections Section 12-6-510 and, Section 12-6-530, Chapter 11 of Title 12, and or Chapter 7 of Title 38."
B. This section takes effect upon approval by the Governor.
SECTION 14.A. Section 12-6-3360(M)(10) of the 1976 Code is amended to read:
"(10) 'Corporate office facility' means a corporate headquarters that meets the definition of a 'corporate headquarters' contained in Section 12-6-3410(J)(1). The corporate headquarters of a general contractor licensed by the South Carolina Department of Labor, Licensing and Regulation qualifies even if it is not a regional or national headquarters as those terms are defined in Section 12-6-3410(J)(1)."
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
SECTION 15. Section 12-6-3535(A) of the 1976 Code, as last amended by Act 386 of 2006, and the first paragraph of Section 12-6-3535(B), as last amended by Act 69 of 2003, is further amended to read:
"(A) A taxpayer who is allowed a federal income tax credit pursuant to Section 47 of the Internal Revenue Code for making qualified rehabilitation expenditures for a certified historic structure located in this State is allowed to claim a credit against income taxes imposed by Sections 12-6-510 and 12-6-530 and license fees imposed by Chapter 20 of Title 12. For the purposes of this section, 'qualified rehabilitation expenditures' and 'certified historic structure' are defined as provided in the Internal Revenue Code Section 47 and the applicable treasury regulations. The amount of the credit is ten percent of the expenditures that qualify for the federal credit. To claim the credit allowed by this subsection, the a taxpayer filing a paper return must attach to the return a copy of the section of the federal income tax return showing the credit claimed, along with any other information that the Department of Revenue determines is necessary for the calculation of the credit provided by this subsection.
(B) A taxpayer who is not eligible for a federal income tax credit under Section 47 of the Internal Revenue Code and who makes rehabilitation expenses for a certified historic residential structure located in this State is allowed to claim a credit against the tax imposed by this chapter. The amount of the credit is twenty-five percent of the rehabilitation expenses. To claim the credit allowed by this subsection, the a taxpayer filing a paper return must attach to the return a copy of the certification obtained from the State Historic Preservation Officer verifying that the historic structure has been rehabilitated in accordance with this subsection, along with all information that the Department of Revenue determines is necessary for the calculation of the credit provided by this subsection. A taxpayer filing an electronic return shall keep a copy of the certification with his tax records."
SECTION 16. A. Section 12-6-3585 of the 1976 Code, as added by Act 319 of 2006, is amended to read:
"Section 12-6-3585. (A) A taxpayer may claim as a credit against his state income tax imposed by Chapter 6 of Title 12, license fees imposed by Chapter 20 of Title 12, or insurance premiums imposed by Chapter 7 of Title 38, or any combination of them, one hundred percent of an amount contributed to the Industry Partnership Fund at the South Carolina Research Authority, or an SCRA-designated affiliate, or both, pursuant to Section 13-17-88(E), up to a maximum credit of six hundred fifty thousand dollars for an individual a single taxpayer, not to exceed an aggregate credit of two million dollars for all taxpayers in tax year 2006; up to a maximum credit of one million three hundred thousand dollars for an individual a single taxpayer, not to exceed an aggregate credit of four million dollars for all taxpayers in tax year 2007; and up to a maximum credit of two million dollars for an individual a single taxpayer, not to exceed an aggregate credit of six million dollars for all taxpayers for each tax year beginning after December 31, 2007. For purposes of determining a taxpayer's entitlement to the credit for qualified contributions for a given tax year in which more than the applicable aggregate annual limit on the credit is contributed by taxpayers for that year, taxpayers who have made contributions that are intended to be qualified contributions earlier in the applicable tax year than other taxpayers must be given priority entitlement to the credit. The SCRA shall certify to taxpayers who express a bona fide intention of making one or more qualified contributions as to whether the taxpayer is entitled to that priority.
(B) The amount of the credit is equal to one hundred percent of the amount of the taxpayer's qualified contributions to the Industry Partnership Fund, subject to the limitations in this section. The credit is nonrefundable.
(C) The use of the credit is limited to the taxpayer's applicable income or premium tax or license fee liability for the tax year of the taxpayer after the application of all other credits. An unused credit may be carried forward ten tax years of the taxpayer after the end of the tax year of the taxpayer during which the qualified contribution was made.
(D) A contribution is not a qualified contribution if it is subject to conditions or limitations regarding the use of the contribution.
(E) 'Taxpayer' means an individual, corporation, partnership, trust, bank, insurance company, or other entity having a state income or insurance premium tax or license fee liability who has made a qualified contribution.
(F) To claim qualify for the credit, the taxpayer shall attach to the return a copy of retain a form provided by SCRA identifying the taxpayer's qualified contribution and the year and amount of credit for which the taxpayer qualifies. The Department of Revenue may require a copy of the form be attached to the taxpayer's income tax return or be provided otherwise to the department.
(G) The Department of Revenue department may require information and submissions by the taxpayer as it considers appropriate in relation to a taxpayer's claim of entitlement to the credit.
(H) The merger, consolidation, or reorganization of a corporation where tax attributes survive does not create new eligibility in a succeeding corporation, but unused credits may be transferred and continued by the succeeding corporation. In addition, a corporation or partnership may assign its rights to its unused credit to another corporation or partnership if it transfers all, or substantially all, of the assets of the corporation or partnership or all, or substantially all, of the assets of the trade or business or operating division of the corporation or partnership to another corporation or partnership.
(I) A taxpayer who claims the credit may not take a deduction in relation to the qualified contribution which gives rise to such credit."
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
SECTION 17.A. Section 12-6-3587(A) of the 1976 Code, as added by Act 386 of 2006, is amended to read:
"(A) There is allowed as a tax credit against the income tax liability of a taxpayer imposed by this chapter an amount equal to twenty-five percent of the costs incurred by the taxpayer in the installation of a solar energy heating or cooling system, or both, in a building in South Carolina owned by the taxpayer. The tax credit allowed by this section must not be claimed before the completion of the installation, and must be claimed for the year that the costs are incurred. The amount of the credit may not exceed three thousand five hundred dollars or fifty percent of the taxpayer's tax liability for that taxable year, whichever is less. If the amount of the credit exceeds three thousand five hundred dollars, the taxpayer may carry forward the excess for up to ten years."
B. This section takes effect upon approval by the Governor and applies to installation costs incurred after December 31, 2005.
SECTION 18. Section 12-6-4980 of the 1976 Code, as last amended by Act 363 of 2002, is further amended to read:
"Section 12-6-4980. (A) The department, for good cause, may allow an extension of time not to exceed six months for filing returns under this chapter or the annual report under Chapter 20 of this title. A taxpayer requesting an extension of time for filing, on or before the date the return or annual report is due, shall submit a tentative return and pay the full amount of the tax and license fee due.
(B) When a taxpayer is not required to make a payment of tax at the time of the extension, and the taxpayer has been granted an extension of time to file a federal income tax return, the taxpayer is not required to apply to the department for an extension of time to file the South Carolina return. The department shall accept a copy, if applicable, of a properly filed federal extension attached to the South Carolina return when filed. Any taxes shown to be due on a return required pursuant to this chapter must be paid at the time the return is due to be filed, without regard to any extension of time granted for filing the return.
(C) An extension may not be granted to a taxpayer who has been granted an extension for a previous period and has not fulfilled the requirements of the previous period."
SECTION 19. Section 12-8-580(D)(2) of the 1976 Code is amended to read:
"(2) The buyer is liable for the collection and payment of an amount due pursuant to this section. The A lending institution, real estate agent, and or closing attorney are is not liable for the collection of an amount due from the buyer pursuant to this section. However, a lending institution, real estate agent, or closing attorney that has in fact withheld taxes is required timely to remit the amount withheld within the timeframe provided in item (1) of this subsection."
SECTION 20. Section 12-8-590(D) of the 1976 Code is amended to read:
"(D) A partnership required to withhold taxes on distributed or undistributed income shall make a return with each payment of tax to the department disclosing on the return the names, taxpayer identification number, the total amount of South Carolina taxable income paid or credited to each nonresident partner, the tax withheld for each nonresident partner, and any other information the department requires. The partnership shall furnish to each nonresident shareholder partner a written statement as required by Section 12-8-1540(A) as proof of the amount of his share of distributed or undistributed income that has been withheld."
SECTION 21. Section 12-8-2020 of the 1976 code is amended to read:
"Section 12-8-2020. (A) A refund or credit may be allowed for an overpayment of tax withheld under pursuant to this chapter to:
(1) the withholding agent to the extent that the withholding agent did not withhold the overpayment amount from the taxpayer; or
(2) the taxpayer to the extent that the overpayment was withheld from the taxpayer.
(B) A refund or credit may be granted to a withholding agent who has withheld taxes in error if the withholding agent furnishes evidence that has refunded or unconditionally credited the amount erroneously withheld has been refunded or unconditionally credited to the taxpayer and the amount is refunded or credited to the taxpayer before the issuance of the original wage and tax statement for the calendar year.
(C) The withholding agent or taxpayer shall apply for a refund or credit under this section within three years from the deemed date of the overpayment. A refund or credit is not allowed for less than one dollar. For purposes of this section, the deemed date of overpayment is the original due date of the return in which the withholding is credited against tax imposed by Chapter 6 of this title."
SECTION 22. Section 12-20-90 of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"Section 12-20-90. The amount of the license fee required by Section 12-20-50 for a bank holding company, insurance holding company system, and savings and loan holding company must be measured by the capital stock and paid-in surplus of the holding company exclusive of the capital stock and paid-in surplus of a bank, insurer, or savings and loan association that is a subsidiary of the holding company. For the purposes of this section, 'bank', 'bank holding company', and 'subsidiary' of a bank holding company have the same definitions as in Section 34-24-20 34-25-10; 'insurer', 'insurance holding company system', and a 'subsidiary' of an insurance holding company system have the same definitions as in Section 38-21-10; and savings and loan 'association', 'savings and loan holding company', and a 'subsidiary' of a savings and loan company have the same definitions as in Section 34-28-300."
SECTION 23.A. Section 12-23-20(9) of the 1976 Code, as added by Act 335 of 2006, is amended to read:
"(9) electricity used by a technology intensive facility as defined in Section 12-6-3360(M)(14)(b) and qualifying for the sales tax exemption provided pursuant to Section 12-36-2120(65), and the equipment and raw materials including, without limitation, fuel used by such qualifying facility to generate, transform, transmit, distribute, or manage electricity for use in such a facility. The running of the periods of limitation within which the department may assess taxes pursuant to Section 12-54-85 is suspended during the same time period it is suspended in item (65)(d) of Section 12-36-2120."
B. This section takes effect June 6, 2006.
SECTION 24.A. Section 12-36-2120(66) of the 1976 Code, as added by Act 335 of 2006, is amended to read:
"(66) electricity used by a technology intensive facility as defined in Section 12-6-3360(M)(14)(b) and qualifying for the sales tax exemption provided pursuant to item (65) of this section, and the equipment and raw materials including, without limitation, fuel used by such qualifying facility to generate, transform, transmit, distribute, or manage electricity for use in such a facility. The running of the periods of limitation within which the department may assess taxes pursuant to Section 12-54-85 is suspended during the same time period it is suspended in item (65)(d) of this section."
B. This section takes effect June 6, 2006.
SECTION 25. Section 12-36-2510(C) of the 1976 Code, as last amended by Act 145 of 2005, is further amended to read:
"(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 fraudulently 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."
SECTION 26. Section 12-37-270(C) of the 1976 Code, as last amended by Act 386 of 2006, is further amended to read:
"(C) The department shall may promulgate regulations necessary to carry out the provisions of this section."
SECTION 27. Section 12-54-70(a) of the 1976 Code is amended to read:
"(a) The department may, for good cause, allow further time for the filing of returns or remitting of tax due, required under by the provisions of law administered by the department. The request for an extension may be granted only if the request is must be filed with the department on or before the day the return of the tax is due. Except as otherwise provided in this section, the department may allow an extension of time not to exceed six months. A tentative return is required reflecting one hundred percent of the anticipated tax to be paid for the taxable period, to be accompanied by a remittance for the tentative tax liability. Interest at the rate as provided under in Section 12-54-25, calculated from the date the tax was originally due, must be added to the balance due whenever an extension to file or to remit tax due is granted."
SECTION 28.A. Section 12-54-85(C) of the 1976 Code, as last amended by Act 399 of 2000, is further amended to read:
"(C) Taxes may be determined and assessed after the thirty-six month limitation if:
(1) there is fraudulent intent to evade the taxes;
(2) the taxpayer failed to file a return or document as required by law;
(3) there is a twenty percent understatement of the total of all taxes required to be shown on the return or document. The taxes in this case may be assessed at any time within seventy-two months from the date the return or document was filed or due to be filed, whichever is later. For the purpose of this item, the total of all taxes required to be shown on the return is the total of all taxes required to be shown on the return before any reduction for estimated payments, withholding payments, other prepayments, or discount allowed for timely filing of the return and payment of the tax due, but that amount must be reduced by another credit that may be claimed on the return;
(4) the person liable for any taxes consents in writing, before the expiration of the time prescribed in this section for assessing taxes due, to the assessment of the taxes after the time prescribed by this section. ; or
(5) the tax is a use tax imposed under Chapter 36 of this title, or a local use tax administered and collected by the department on behalf of a local jurisdiction, and the assessment of the use tax is the result of information received from, or as a result of exchange agreements with, other state or local taxing authorities, regional or national tax administration organizations, or the federal government. The use taxes in this case may be assessed at any time within twelve months after the department receives the information, but no later than seventy-two months after the last day the use tax may be paid without penalty."
B. This section takes effect upon approval by the Governor and applies to all assessments issued after that date.
SECTION 29.A. Section 12-54-155(D)(2) of the 1976 Code, as last amended by Act 386 of 2006, is further amended to read:
"(2) In the case of underpayment attributable to a substantial valuation misstatement with respect to charitable deduction property, item (1) does not apply if unless:
(a) the claimed value of the property was based on a qualified appraisal made by a qualified appraiser; and
(b) in addition to obtaining the appraisal, the taxpayer made a good faith investigation of the value of the contributed property."
B. This section takes effect upon approval by the Governor and applies for tax periods beginning after December 31, 2006.
SECTION 30. Section 12-54-240(B)(12), as last amended by Act 145 of 2005, and (13) of the 1976 Code, is further amended to read:
"(12)(a) disclosure to a state agency, county auditor, or county assessor of whether a resident or nonresident tax return was filed by a particular taxpayer, whether the return is joint or individual, the name of any a taxpayer filing jointly with the taxpayer, the taxpayer's address as shown on the return, and what county code of residence is contained on the return.
(b) disclosure to any a 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 a county.
(13) disclosure of information pursuant to Section 12-54-1010(c) or 12-54-1020(c) Reserved;"
SECTION 31.A. Section 12-54-240(B) of the 1976 Code, as last amended by Act 386 of 2006, is further amended by adding at the end:
"(26) disclosure of information referred to in Section 12-60-3312."
B. This section takes effect upon approval by the Governor and applies to all tax decisions and associated information filed whether the decision was issued before or after that date.
SECTION 32.A. Section 12-60-20 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"Section 12-60-20. It is the intent of the General Assembly to provide the people of this State with a straightforward procedure to determine any a dispute with the Department of Revenue and a dispute concerning property taxes. The South Carolina Revenue Procedures Act must be interpreted and construed in accordance with, and in furtherance of, that intent."
B. This section takes effect upon approval by the Governor.
SECTION 33. Section 12-60-90(C) of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(C) Taxpayers may be represented during the administrative tax process by:
(1) the same individuals who may represent them in administrative tax proceedings with the Internal Revenue Service pursuant to Section 10.3(a), (b), and (c), Section 10.7(a), (c)(1)(i) through (c)(1)(vi), and (c)(2 1)(viii), and Section 10.7(d) and (e) of United States Treasury Department Circular No. 230; and
(2) a real estate appraiser who is registered, licensed, or certified pursuant to Chapter 60 of Title 40 during the administrative tax process in a matter limited to questions concerning the valuation of real property."
SECTION 34.A. Section 6-1-320(A) of the 1976 Code, as last amended by Act 388 of 2006, is further 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 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, plus, beginning in 2007, the percentage increase in the previous year in the population of the entity as determined by the Office of Research and Statistics of the State Budget and Control Board. If an entity experiences a reduction in population, the percentage change in population is deemed to be zero. 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 35. Article 5, Chapter 4, Title 12 is amended by adding:
"Section 12-4-535. (A) the department may issue a department determination directing the appropriate county official to comply with all applicable state law relating to the valuation, assessment, or taxation of property.
(B) Within thirty days of the date the department determination is mailed or hand delivered, the county must respond in writing by first class mail or hand delivery to the department and state its agreement or disagreement with the department determination.
(C) If the county disagrees with, or fails to respond to, the department determination, the department by its director or designee or the county governing body by resolution may request a contested case hearing before the Administrative Law Court within thirty days after the date the county disagreement notice was, or should have been, mailed or hand delivered. A request for a contested case hearing before the Administrative Law Court must be made in accordance with its rules.
(D) The county governing body by resolution may request a department determination on any state law regarding the valuation, assessment, or taxation of property. Within thirty days of a request by a county governing body, the department may issue, in its discretion, the determination, which must be issued by first class mail or hand delivery to the county."
SECTION 36. Section 12-4-320 of the 1976 Code is amended by adding an appropriately numbered item at the end:
"( ) enter into an installment payment agreement with a taxpayer."
SECTION 37. Section 12-6-40(A)(1)(a) of the 1976 Code, as last amended by Act 386 of 2006, is further amended to read:
"(a) Except as otherwise provided, 'Internal Revenue Code' means the Internal Revenue Code of 1986, as amended through December 31, 20052006, and includes the effective date provisions contained in it."
SECTION 38.A. Section 12-6-50(2) of the 1976 Code is amended to read:
"(2) Sections 22 through 5354, 515, 853, 901 through 908, and 960 relating to tax credits;"
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
SECTION 39. Section 12-6-3360(B)(5)(f) and (h) of the 1976 Code, as added by Act 161 of 2005 and Act 386 of 2006, respectively, is amended to read:
"(f) In a county in which one employer has lost at least 1,500 jobs in a calendar year, the credit allowed is one tier higher than the credit for which the county would otherwise qualify. The one-tier-higher credit allowed by this subsection is allowed for a three-year period beginning immediately following the year during which the jobs were lost five taxable years for jobs created in 2006, 2007, and 2008. This subsection does not apply to a job created in a county eligible for a higher tier pursuant to another provision of this section.
(h) In a county in which one employer has lost at least 1,500 jobs in calendar year 2006, the credit allowed is three tiers higher than the credit for which the county would otherwise qualify. The three-tier-higher credit allowed by this subsection is allowed for five taxable years beginning for jobs created in 2007 and 2008. This subsection does not apply to a job created in a county eligible for a higher tier pursuant to another provision of this section."
SECTION 40.A. Section 12-6-3362(B) of the 1976 Code, as added by Act 389 of 2006, is amended to read:
"(B) Beginning with the first full month wages are paid for year the new full-time jobs are created, the taxpayer is allowed a jobs tax credit in an amount equal to 8.33 percent of the maximum credit amount calculated pursuant to Section 12-6-3360(C)(2) each month, for not more than sixty consecutive months, multiplied by the number of new full-time jobs for which wages are paid for the full month five consecutive years. A credit is not allowed for any month a year in which the new employment full-time job increase falls below the minimum level of two. To claim the credits allowed pursuant to Section 12-6-3360(C)(2)(a), the minimum gross wages requirement is met if the gross wages paid for the month, when annualized, meet the minimum requirement."
B. This section takes effect upon approval by the Governor and applies to tax years beginning after December 31, 2005.
SECTION 41. Section 12-6-3585(A) of the 1976 Code, as added by Act 319 of 2006, is amended to read:
"(A) A taxpayer may claim as a credit against his state income tax imposed by Chapter 6 of Title 12, bank tax imposed by Chapter 11 of Title 12, license fees imposed by Chapter 20 of Title 12, or insurance premiums imposed by Chapter 7 of Title 38, or any combination of them, one hundred percent of an amount contributed to the Industry Partnership Fund at the South Carolina Research Authority, or an SCRA-designated affiliate, or both, pursuant to Section 13-17-88(E), up to a maximum credit of six hundred fifty thousand dollars for an individual taxpayer, not to exceed an aggregate credit of two million dollars for all taxpayers in tax year 2006; up to a maximum credit of one million three hundred thousand dollars for an individual taxpayer, not to exceed an aggregate credit of four million dollars for all taxpayers in tax year 2007; and up to a maximum credit of two million dollars for an individual taxpayer, not to exceed an aggregate credit of six million dollars for all taxpayers for each tax year beginning after December 31, 2007. For purposes of determining a taxpayer's entitlement to the credit for qualified contributions for a given tax year in which more than the applicable aggregate annual limit on the credit is contributed by taxpayers for that year, taxpayers who have made contributions that are intended to be qualified contributions earlier in the applicable tax year than other taxpayers must be given priority entitlement to the credit. The SCRA shall certify to taxpayers who express a bona fide intention of making one or more qualified contributions as to whether the taxpayer is entitled to that priority."
SECTION 42. A. Section 12-36-2120(67) of the 1976 Code, as added by Act 384 of 2006, is amended to read:
"(67) effective July 1, 2011, construction materials used in the construction of a new or expanded single manufacturing and or distribution facility, or one that serves both purposes, with a capital investment of at least one hundred million in real and personal property at a single site in the State over an eighteen-month period. The taxpayer must provide notice of the exemption, and the Department of Revenue may assess taxes owing in the manner provided in Section 12-36-2120(51)."
B. Notwithstanding the sales and use rates imposed pursuant to Chapter 36, Title 12 of the 1976 Code, the rate of tax imposed pursuant to that chapter on the gross proceeds of qualifying construction materials used in the construction of a single manufacturing or distribution facility, as provided in item (67), is four percent for sales from July 1, 2007, through June 30, 2008, three percent for sales from July 1, 2008, through June 30, 2009, two percent for sales from July 1, 2009, through June 30, 2010, and one percent for sales from July 1, 2010, through June 30, 2011.
SECTION 43. Section 12-54-200(C) of the 1976 Code, as last amended by Act 89 of 2001, is further amended to read:
"(C) If A person is required to maintain a separate account, he must give the name of the financial institution, the account number, and other information the department requires. Taxes, penalties, and interest due must be withdrawn from the account by preprinted, consecutively numbered checks signed by a properly authorized officer, partner, manager, employee, or member of the taxpayer and made payable to the department. Monies deposited in the account may must not be commingled with other funds. The department, at its discretion, may apply Section 12-54-250, if the amount due from the taxpayer is twenty fifteen thousand dollars or more."
SECTION 44. Section 12-54-240(B) of the 1976 Code, as last amended by Act 386 of 2006, is further amended by adding appropriately numbered items at the end:
"( ) disclosure of information to the State Treasurer necessary for the administration and enforcement of the Uniform Unclaimed Property Act;
( ) exchange of information between the department, the Department of Commerce and its agency, the Venture Capital Authority, and the Department of Insurance for the purpose of registering and verifying the existence, possession, transfer, and use of tax credits pursuant to Chapter 45 of Title 11."
SECTION 45. Section 12-54-250(A) and (B) of the 1976 Code, as last amended by Act 163 of 2002, is further amended to read:
"(A)(1) The South Carolina Department of Revenue may require, consistent with the cash management policies of the State Treasurer, that any a person owing fifteen thousand dollars or more in connection with any return, report, or other document to be filed with the department or a withholding agent making at least twenty-four payments in a year pursuant to Section 12-8-1520(D) shall pay the tax liability to the State no later than the date the payment is required by law to be made, in funds which that are available immediately to the State on the date of payment. 'Payment in immediately available funds' may be made means payment by cash to the main office of the department before five o'clock p.m. or by any electronic means established by the department, with the approval of the State Treasurer, which ensures the availability settlement of those funds to in the State state's account on or before the banking day following the due date of payment the tax as provided by law.
(2) Evidence of the payment must be furnished to the department Initiation of the transfer of funds must occur on or before the due date of the tax as provided by law. If payment is made by means other than cash and settlement to the state's account does not occur on or before the banking day following the due date of the tax, payment is deemed to occur on the date settlement occurs.
(3) Failure to make timely payment in immediately available funds or failure to provide evidence of payment in a timely manner subjects the taxpayer to penalties and interest as provided by law for delinquent or deficient tax payments.
(B) The department by rule may prescribe provide alternative periodic filing and payment dates later than the dates otherwise provided by law for any taxes collected by the department in those instances where it is considered to be in the best interest interests of the State. An alternative date may must not be later than the last day of the month in which the tax was otherwise due."
SECTION 46. Section 12-60-430 of the 1976 Code, as last amended by Act 69 of 2003, is further amended to read:
"(A) If a taxpayer fails or refuses to make a report or to file a return required by the provisions of this title or required to be filed with the department, the department may make an estimate of the tax liability from the best information available and issue a proposed assessment for the taxes, including penalties and interest.
(B) If the department determines a return or report filed by a taxpayer is frivolous, the department may make an estimate of the tax liability from the best information available and issue a proposed assessment for the tax, including penalties and interest."
SECTION 47. Section 11-11-156(D) of the 1976 Code, as added by Act 388 of 2006, is amended to read:
"(D) Notwithstanding any other another provision of this section, in the case of a redevelopment project area created pursuant to Chapter 6, 7, or 12 of Title 31, the reimbursements provided pursuant to this section for the property tax exemption allowed by Section 12-37-220(B)(47) must include full payment to each taxing entity for the incremental property tax that, in the absence of such exemption, would otherwise be payable to such taxing entity with respect to owner-occupied residential real property located in a redevelopment project area pursuant to the tax increment financing law for cities, counties, or redevelopment authorities. Such payment for incremental property taxes shall be calculated in accordance with the applicable tax increment financing law and shall be based on the assessed value of, and the school operating millage rate otherwise applicable to, the owner-occupied residential property in question the city or county creating the redevelopment project area for amounts that would have been payable to the special tax allocation fund created pursuant to that chapter if no such exemption existed."
SECTION 48. Section 11-45-55(I) of the 1976 Code, as added by Act 125 of 2005, is amended by adding at the end:
"(3) Notwithstanding Section 12-54-240(A), the authority, the Department of Commerce, the Department of Revenue, and the Department of Insurance may exchange information for the purpose of registering and verifying the existence, possession, transfer, and use of tax credits pursuant to this chapter."
SECTION 49. A taxpayer must not be penalized for following the provisions of Section 401 of the Federal Tax Increase Prevention and Reconciliation Act of 2005 for South Carolina purposes.
SECTION 50. A. Article 17, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-2252. (A) A taxpayer whose principal business in this State is (i) manufacturing or a form of collecting, buying, assembling, or processing goods and materials within this State, or (ii) selling, distributing, or dealing in tangible personal property within this State, shall make returns and pay annually an income tax that includes its income apportioned to this State. Its income apportioned to this State is determined by multiplying the net income remaining after allocation pursuant to Sections 12-6-2220 and 12-6-2230 by the sales factor defined in Section 12-6-2280.
(B) If a sales factor does not exist, the remaining net income is apportioned to the business's principal place of business."
B. This section takes effect upon approval by the Governor and applies for taxable years beginning after 2006.
SECTION 51. A. Article 17, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-2295. (A) The terms 'sales' as used in Section 12-6-2280 and 'gross receipts' as used in Section 12-6-2290 include, but are not limited to, the following items if they have not been separately allocated:
(1) receipts from the sale or rental of property maintained for sale or rental to customers in the ordinary course of the taxpayer's trade or business including inventory;
(2) receipts from the sale of accounts receivable acquired in the ordinary course of trade or business for services rendered or from the sale or rental of property maintained for sale or rental to customers in the ordinary course of the taxpayer's trade or business if the accounts receivable were created by the taxpayer or a related party. 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;
(3) receipts from the use of intangible property in this State including, but not limited to, royalties from patents, copyrights, trademarks, and trade names;
(4) net gain from the sale of property used in the trade or business. For purposes of this subsection, property used in the trade or business means property subject to the allowance for depreciation, real property used in the trade or business, and intangible property used in the trade or business which is:
(a) not property of a kind that properly would be includible in inventory of the business if on hand at the close of the taxable year; or
(b) held by the business primarily for sale to customers in the ordinary course of the trade or business;
(5) receipts from services if the entire income-producing activity is within this State. If the income-producing activity is performed partly within and partly without this State, sales are attributable to this State to the extent the income-producing activity is performed within this State;
(6) receipts from the sale of intangible property which are unable to be attributed to any particular state or states are excluded from the numerator and denominator of the factor.
(B) The terms 'sales' as used in Section 12-6-2280 and 'gross receipts' as used in Section 12-6-2290 do not include:
(1) repayment, maturity, or redemption of the principal of a loan, bond, or mutual fund or certificate of deposit or similar marketable instrument;
(2) the principal amount received under a repurchase agreement or other transaction properly characterized as a loan;
(3) proceeds from the issuance of the taxpayer's stock or from sale of treasury stock;
(4) damages and other amounts received as the result of litigation;
(5) property acquired by an agent on behalf of another;
(6) tax refunds and other tax benefit recoveries;
(7) pension reversions;
(8) contributions to capital, except for sales of securities by securities dealers;
(9) income from forgiveness of indebtedness; or
(10) amounts realized from exchanges of inventory that are not recognized by the Internal Revenue Code."
B. This section takes effect upon approval of this act by the Governor and applies for taxable years beginning after 2006.
SECTION 52.A. Section 12-6-2250 of the 1976 Code, as last amended by Act 384 of 2006, is further amended to read:
"Section 12-6-2250. A taxpayer whose principal business in this State is (i) manufacturing or any form of collecting, buying, assembling, or processing goods and materials within this State, or (ii) selling, distributing, or dealing in tangible personal property within this State, shall make returns and pay annually an income tax that includes its income apportioned to this State. Its income apportioned to this State is determined by multiplying the net income remaining after allocation pursuant to Sections 12-6-2220 and 12-6-2230 by a fraction, the numerator of which is the number of sales made in South Carolina, and the denominator of which is the total number of sales for the taxpayer. However, if a sales ratio does not exist, the denominator of the fraction is the number of existing ratios, and where the sales ratio exists but the payroll ratio or the property ratio does not exist, the denominator of the fraction is the number of existing ratios plus one. The sales ratios must be determined in accordance with Section 12-6-2280. (A) A taxpayer whose principal business in this State is (i) manufacturing or a form of collecting, buying, assembling, or processing goods and materials within this State, or (ii) selling, distributing, or dealing in tangible personal property within this State, shall make returns and pay annually an income tax that includes its income apportioned to this State. Its income apportioned to this State is determined by multiplying the net income remaining after allocation pursuant to Sections 12-6-2220 and 12-6-2230 by a fraction, the numerator of which is the property ratio, plus the payroll ratio, plus twice the sales ratio, and the denominator of which is four. However, where the sales ratio does not exist, the denominator of the fraction is the number of existing ratios, and where the sales ratio exists but the payroll ratio or the property ratio does not exist, the denominator of the fraction is the number of existing ratios plus one. The property, payroll, and sales ratios must be determined in accordance with Sections 12-6-2260, 12-6-2270, and 12-6-2280, respectively.
(B) For taxable years beginning in 2007 through 2010 only, a taxpayer in subsection (A) shall apportion income by using the method provided in Section 12-6-2250(A) and, if applicable, the method provided in Section 12-6-2252. If the calculation permitted in Section 12-6-2252 results in a reduction in income allocated to this State, the reduction is allowed as follows:
Taxable year beginning in: Percentage of reduction allowed
2007 20
2008 40
2009 60
2010 80."
(C) For purposes of calculation of the license fee pursuant to Section 12-20-60, the percentage reduction is applied in the same manner as in subsection (B).
B. This section takes effect upon approval of this act by the Governor and applies for taxable years beginning after 2006.
SECTION 53.A. Section 12-6-2280 of the 1976 Code is amended to read:
"Section 12-6-2280. (A) The sales factor is a fraction in which the numerator is the total sales of the taxpayer in this State during the taxable year and the denominator is the total sales of the taxpayer everywhere during the taxable year.
(B) The term 'sales in this State' includes sales of goods, merchandise, or property received by a purchaser in this State other than the .United States Government. The place where goods are received by the purchaser after all transportation is completed is considered as the place at which the goods are received by the purchaser. Direct delivery into this State by the taxpayer to a person designated by a purchaser constitutes delivery to the purchaser in this State.
(C) The word 'sales' includes, but is not limited to:
(1) rentals from tangible personal property located in this State which are not separately allocated; and
(2) sales of intangible personal property and receipts from services if the entire income-producing activity is within this State. If the income-producing activity is performed partly within and partly without this State, sales are attributable to this State to the extent the income-producing activity is performed within this State. Sales of tangible personal property to the United States government are not included in the numerator or the denominator of the sales factor. Only sales for which the United States government makes direct payment to the seller pursuant to the terms of a contract constitute sales to the United States government.
(D) For purposes of this section, items included in sales are as provided in Section 12-6-2295."
B. This section takes effect upon approval of this act by the Governor and applies for taxable years beginning after 2006.
SECTION 54. Section 12-6-2290 of the 1976 Code is amended to read:
"Section 12-6-2290. If the principal profits or income of a taxpayer are derived from sources other than those described in Section 12-6-2250 or Section 12-6-2310, the taxpayer shall apportion its remaining net income using a fraction in which the numerator is gross receipts from within this State during the taxable year and the denominator is total gross receipts from everywhere during the taxable year. For purposes of this section, items included in gross receipts are as provided in Section 12-6-2295. "
B. This section takes effect upon approval of this act by the Governor and applies for taxable years beginning after 2006.
SECTION 55.A. Section 12-6-1130(6) of the 1976 Code is amended to read:
"(6) In computing the depletion deduction pursuant to Internal Revenue Code Sections 611 through 613, a taxpayer who allocates or apportions income under pursuant to the provisions of Article 17 of this chapter has the option of:
(a) apportioning the deduction according to the appropriate South Carolina apportionment percentage provided in Sections 12-6-2250 12-6-2252 through 12-6-2310; or
(b) allocating the deduction to South Carolina with respect to mines, oil and gas wells, and other natural deposits located in this State. The amount allocated to South Carolina may not exceed fifty percent of the net income apportioned to South Carolina by Sections 12-6-2250 12-6-2252 through 12-6-2310."
B. Section 12-6-2240 of the 1976 Code is amended to read:
"Section 12-6-2240. All income remaining after allocation under pursuant to Sections 12-6-2220 and 12-6-2230 is apportioned in accordance with Sections 12-6-2250 Section 12-6-2252, or one of the special apportionment formulas provided in Sections 12-6-2290 through 12-6-2310."
C. Section 12-6-2290 of the 1976 Code is amended to read:
"Section 12-6-2290. If the principal profits or income of a taxpayer are derived from sources other than those described in Section 12-6-2250 12-6-2252 or Section 12-6-2310, the taxpayer shall apportion its remaining net income using a fraction in which the numerator is gross receipts from within this State during the taxable year and the denominator is total gross receipts from everywhere during the taxable year. For purposes of this section, items included in gross receipts are as provided in Section 12-6-2295."
D. Sections 12-6-2250, 12-6-2260, and 12-6-2270 are repealed.
E. This section takes effect for tax years after 2010.
SECTION 56. Section 6-5-10(a) of the 1976 Code is amended to read:
"(a) The governing body of any municipality, county, school district, or other local government unit or political subdivision and county treasurers may invest money subject to their control and jurisdiction in:
(1) Obligations of the United States and its agencies thereof; , the principal and interest of which is fully guaranteed by the United States;
(2) Obligations issued by the Federal Financing Bank, Federal Farm Credit Bank, the Bank of Cooperatives, the Federal Intermediate Credit Bank, the Federal Land Banks, the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Housing Administration, and the Farmers Home Administration, if, at the time of investment, the obligor has a long-term, unenhanced, unsecured debt rating in one of the top two ratings categories, without regard to a refinement or gradation of rating category by numerical modifier or otherwise, issued by at least two nationally recognized credit rating organizations;
(23)(i) General obligations of the State of South Carolina or any of its political units; or (ii) revenue obligations of the State of South Carolina or its political units, if at the time of investment, the obligor has a long-term, unenhanced, unsecured debt rating in one of the top two ratings categories, without regard to a refinement or gradation of rating category by numerical modifier or otherwise, issued by at least two nationally recognized credit rating organizations;
(34) Savings and Loan Associations to the extent that the same are insured by an agency of the federal government;
(45) Certificates of deposit where the certificates are collaterally secured by securities of the type described in (1) and (2) above held by a third party as escrow agent or custodian, of a market value not less than the amount of the certificates of deposit so secured, including interest; provided, however, such collateral shall not be required to the extent the same are insured by an agency of the federal government.
(56) Repurchase agreements when collateralized by securities as set forth in this section.
(67) No load open-end or closed-end management type investment companies or investment trusts registered under the Investment Company Act of 1940, as amended, where the investment is made by a bank or trust company or savings and loan association or other financial institution when acting as trustee or agent for a bond or other debt issue of that local government unit, political subdivision, or county treasurer if the particular portfolio of the investment company or investment trust in which the investment is made (i) is limited to obligations described in items (1), (2), (3) and (56) of this subsection, and (ii) has among its objectives the attempt to maintain a constant net asset value of one dollar a share and to that end, value its assets by the amortized cost method.
(78) A political subdivision receiving Medicaid funds appropriated by the General Assembly in the annual general appropriations act may utilize appropriated funds and other monies generated by hospital operations to participate in principal protected investments in the form of notes, bonds, guaranteed investment contracts, debentures, or other contracts issued by a bank chartered in the United States or agency of a bank if chartered in the United States, financial institution, insurance company, or other entity which provides for full principal payment at the end of a contract term not to exceed twelve years if the issuer has received a rating in one of three highest general rating categories issued by no fewer than two nationally recognized credit rating organizations. No more than forty percent of the appropriated funds and other monies generated by hospital operations may be invested in the manner provided in this item. Revenue realized pursuant to these investments must be expended on health care services."
SECTION 57. Section 12-6-3620(A) of the 1976 Code, as added by Act 386 of 2006, is amended to read:
"(A) For taxable years beginning after 2006, there is allowed a tax credit against the tax imposed pursuant to Section 12-6-530 for twenty-five percent of the costs incurred by a taxpayer for use of methane gas taken from a landfill to provide power energy for a manufacturing facility."
Section 58. A. Section 12-6-3415(A) of the 1976 Code is amended to read:
"Section 12-6-3415. (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."
B. This SECTION takes effect upon the approval by the Governor, and is applicable for tax years beginning after 2006.
SECTION 59. Section 12-20-105 of the 1976 Code is amended to read:
"Section 12-20-105. (A) Any company subject to a license tax under Section 12-20-100 may claim a credit against its license tax liability for amounts paid in cash to provide infrastructure for an eligible project.
(B)(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, or Chapter 44 of Title 12.
(2) If a project consists of an office, business, commercial, or industrial park which is owned or constructed by a county or political subdivision of this State when the qualifying improvements are paid for, the project does not have to meet the qualifications of item (1) to be considered an eligible project.
(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. Nothing in this section shall prohibit the county or political subdivision from selling the industrial shell building or industrial park after the company has paid in cash to provide the infrastructure for an eligible project.
(D) A company is not allowed the credit provided by this section for actual expenses it incurs in the construction and operation of any building or infrastructure it owns, leases, manages, or operates.
(E) The maximum aggregate credit that may be claimed in any tax year by a single company is three hundred thousand dollars.
(F) The credits allowed by this section may not reduce the license tax liability of the company below zero. If the applicable credit originally earned during a taxable year exceeds the liability and is otherwise allowable under subsection (D), the amount of the excess may be carried forward to the next taxable year.
(G) For South Carolina income tax and license purposes, a company that claims the credit allowed by this section is ineligible to claim the credit allowed by Section 12-6-3420."
B. This SECTION takes effect upon the approval by the Governor, and is applicable for tax years beginning after 2003.
SECTION 60. 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 61. Except as otherwise provided elsewhere in this act, this act takes effect upon approval by the Governor.
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