Bill 3405

                    Current Status

Bill Number:               3405
Ratification Number:       545
Act Number                 488
Introducing Body:          House
Subject:                   Income tax credit

(A488, R545, H3405)

AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-7-1250 SO AS TO ALLOW A STATE CORPORATE INCOME TAX CREDIT FOR CORPORATE CONTRIBUTIONS FOR INFRASTRUCTURE CONSTRUCTION OR IMPROVEMENT, TO LIMIT THE CREDIT TO FIFTY PERCENT OF THE EXPENSES, NOT TO EXCEED TEN THOUSAND DOLLARS, TO ALLOW A THREE-YEAR CARRY-FORWARD OF UNUSED CREDIT, AND TO DEFINE INFRASTRUCTURE AS SEWER LINES, WATER LINES, RELATED FACILITIES, AND ROADS NOT FOR THE TAXPAYER'S EXCLUSIVE BENEFIT, BUILT TO APPROPRIATE STANDARDS, AND DEDICATED TO PUBLIC USE, OR, IN THE CASE OF WATER AND SEWER LINES BUILT IN SERVICE AREAS OF PRIVATELY OWNED WATER OR SEWER SYSTEMS, DEEDED TO A QUALIFYING PRIVATE ENTITY, TO REQUIRE EXPENSES TO BE ALLOCATED WHEN A TAXPAYER ALSO BENEFITS FROM A PROJECT, TO DEFINE QUALIFYING PRIVATE ENTITY, AND TO REQUIRE THE AMOUNT OF THE TAX CREDIT ALLOWED FOR A ROAD PROJECT TO BE ADDED TO THE TAX DUE OF THE TAXPAYER WHO CLAIMED THE CREDIT IF THE ROAD IS REMOVED FROM THE STATE HIGHWAY SYSTEM OR PUBLIC ROAD SYSTEM.

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

Income tax credit

SECTION 1. Article 10, Chapter 7 of Title 12 of the 1976 Code is amended by adding:

"Section 12-7-1250. (A)

A corporate taxpayer is allowed as a credit against taxes due pursuant to Section 12-7-230 an amount equal to fifty percent, not to exceed ten thousand dollars, of expenses paid or accrued by the taxpayer in building or improving any one infrastructure project. Any unused credit may be carried forward three years.

(B) For purposes of the credit allowed by this

section, an infrastructure project includes water lines, sewer lines, their related facilities, and roads that:

(1) do not exclusively benefit the taxpayer;

(2) are built to applicable standards;

(3) are dedicated to public use or, in the case of water and sewer lines and their related facilities in areas served by a private water and sewer company, the water and sewer lines are deeded to a qualified private entity.

If an infrastructure project benefits more than the taxpayer, the expenses of the taxpayer must be allocated to the various beneficiaries and only those expenses not allocated to the taxpayer's benefit qualify for the credit. The credit may be claimed for contributions to a governmental entity and, in the case of water or sewer lines and their related facilities in areas served by a private water and sewer company, to a qualified private entity, for the construction or improvements of qualifying infrastructure projects, or for expenses incurred by the taxpayer in building or improving qualifying infrastructure projects for dedication to public use. The credit may be claimed before dedication or conveyance if the taxpayer submits with its tax return a letter of intent signed by the chief operating officer of the appropriate governmental entity or qualified private entity stating that upon completion the governmental entity or qualified private entity shall accept the infrastructure project for the appropriate use.

(C) For purposes of this section, a qualified private entity is any entity holding the required permits, certifications, and licenses from the South Carolina Department of Health and Environmental Control, the South Carolina Public Service Commission, and any other state agencies, departments, or commissions, from which approvals must be obtained in order to operate as a utility furnishing water supply services or sewage collection or treatment services, or both, to the public.

(D) A qualifying private entity is not allowed the credit provided by this section for expenses it incurs in building or improving facilities it owns, manages, or operates.

(E) If a road qualifying for the credit allowed by this section is subsequently removed from the state highway or public road system the amount of the credit allowed for the construction of the road must be added to any corporate income tax due from the taxpayer for the first taxable year following the removal of the road from public use. The South Carolina Tax Commission shall by regulation implement the provisions of this subsection."

Time effective

SECTION 2. This act, upon approval by the Governor, is effective for taxable years beginning after 1987.