Current Status Introducing Body:Senate Bill Number:1388 Ratification Number:411 Act Number:361 Primary Sponsor:Land Type of Legislation:GB Subject:Taxation, provisions Date Bill Passed both Bodies:Apr 29, 1992 Computer Document Number:CYY/18875.SD Governor's Action:S Date of Governor's Action:May 04, 1992 Introduced Date:Mar 12, 1992 Date of Last Amendment:Apr 16, 1992 Last History Body:------ Last History Date:May 04, 1992 Last History Type:Act No. 361 Scope of Legislation:Statewide All Sponsors:Land Type of Legislation:General Bill
Bill Body Date Action Description CMN
---- ------ ------------ ------------------------------ ---
1388 ------ May 04, 1992 Act No. 361
1388 ------ May 04, 1992 Signed by Governor
1388 ------ Apr 30, 1992 Ratified R 411
1388 House Apr 29, 1992 Read third time, enrolled for
ratification
1388 House Apr 28, 1992 Read second time
1388 House Apr 22, 1992 Introduced, read first time,
placed on Calendar without
reference
1388 Senate Apr 20, 1992 Read third time, sent to House
1388 Senate Apr 16, 1992 Amended, read second time,
unanimous consent for third
reading on Monday, April 20,
1992
1388 Senate Apr 15, 1992 Committee Report: Favorable 06
with amendment
1388 Senate Mar 12, 1992 Introduced, read first time, 06
referred to Committee
View additional legislative information at the LPITS web site.
(A361, R411, S1388)
AN ACT TO AMEND SECTION 4-9-155, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO STANDARDS OF THE ANNUAL AUDIT OF THE OFFICES OF COUNTY ASSESSOR, AUDITOR, TREASURER, AND TAX COLLECTOR, SO AS TO PROVIDE THAT THE PROVISIONS OF THIS SECTION ARE APPLICABLE FOR TAX YEARS BEGINNING AFTER DECEMBER 31, 1992; TO AMEND SECTION 12-4-310, AS AMENDED, RELATING TO MANDATED POWERS AND DUTIES OF THE TAX COMMISSION, SO AS TO PROVIDE FOR DISCLOSURE OF NET TAXABLE SALES TO AUTHORITIES OF A COUNTY OR MUNICIPALITY; TO AMEND SECTION 12-4-730, RELATING TO DECLARATION AND CERTIFICATION OF EXEMPTIONS AND VOIDING OF TAX NOTICES BY AUDITORS, SO AS TO CHANGE CERTAIN REFERENCES IN THE SECTION; TO AMEND SECTION 12-7-20, AS AMENDED, RELATING TO DEFINITIONS FOR PURPOSES OF THE INCOME TAX, SO AS TO REVISE THE REFERENCE DATE IN THE DEFINITION OF "INTERNAL REVENUE CODE"; TO AMEND SECTION 12-7-640, RELATING TO NET INCOME OF PUBLIC SERVICE CORPORATIONS, SO AS TO PROVIDE FOR THE APPORTIONMENT OF INCOME DERIVED FROM THE OPERATION OF A SHIPPING LINE; TO AMEND SECTIONS 12-7-1510, 12-7-1640, AS AMENDED, 12-19-20, AS AMENDED, 12-19-150, 33-31-50, AND 33-35-50, RELATING TO PERSONS REQUIRED TO FILE TAX RETURNS, SO AS TO ELIMINATE THE FILING REQUIREMENTS OF EXEMPT ORGANIZATIONS EXCEPT WHERE TAX ON UNRELATED BUSINESS INCOME IS DUE; TO REPEAL SECTION 33-35-150, RELATING TO ANNUAL REPORTS OF CERTAIN NONPROFIT CORPORATIONS; TO AMEND SECTION 12-7-1675, AS AMENDED, RELATING TO FAILURE TO FILE TAX RETURNS, SO AS TO ALLOW THE COMMISSION TO ISSUE ASSESSMENTS AGAINST CORPORATIONS THAT HAVE BEEN ADMINISTRATIVELY DISSOLVED YET CONTINUE TO FILE RETURNS; TO AMEND SECTIONS 12-7-1680, 12-9-670, AND 12-54-240, AS AMENDED, RELATING TO COLLECTION AND ENFORCEMENT PROCEDURES, SO AS TO CHANGE THE RECORDS RETENTION SCHEDULES TO SIX YEARS; TO AMEND SECTIONS 12-7-2415 AND 12-7-2416, RELATING TO TAX CHECK-OFFS FOR WILDLIFE AND THE CHILDREN'S TRUST FUND RESPECTIVELY, SO AS TO RESTRICT SUCH CHECK-OFFS TO INDIVIDUAL INCOME TAX RETURNS ONLY; TO AMEND SECTION 12-9-310, AS AMENDED, RELATING TO INCOME TAX WITHHOLDING, SO AS TO FURTHER PROVIDE FOR EXEMPTIONS FROM THE WITHHOLDING REQUIREMENTS; TO AMEND SECTION 12-9-420, RELATING TO THE LIABILITY OF A WITHHOLDING AGENT FOR FAILING TO WITHHOLD OR PAY THE TAX DUE, SO AS TO DEFINE WITHHOLDING AGENT; TO AMEND SECTION 12-16-20, RELATING TO THE ESTATE TAX, SO AS TO REVISE THE REFERENCE DATE IN THE DEFINITION OF "INTERNAL REVENUE CODE"; TO AMEND THE 1976 CODE, BY ADDING SECTION 12-21-2575 SO AS TO ALLOW FOR OTHER METHODS OF ACCOUNTING FOR ADMISSIONS OTHER THAN TICKETS; TO AMEND SECTION 12-21-2720, AS AMENDED, RELATING TO LICENSES FOR COIN-OPERATED DEVICES OR MACHINES, SO AS TO EXEMPT FROM THE COIN-OPERATED DEVICE LICENSES AND TAXES CERTAIN MACHINES SUBJECT TO THE ADMISSIONS TAX; TO AMEND SECTION 12-31-420, RELATING TO CALCULATING THE AMOUNT OF FUEL USED BY A MOTOR CARRIER, SO AS TO REVISE THE METHOD OF CALCULATING AMOUNTS OF FUEL USED; TO AMEND SECTIONS 12-36-120, 12-36-910, 12-36-920, 12-36-930, 12-36-2120, AS AMENDED, 12-36-2560, AND 12-36-2650, RELATING TO THE SOUTH CAROLINA SALES AND USE TAX ACT, SO AS TO MAKE TECHNICAL CORRECTIONS; TO AMEND THE 1976 CODE BY ADDING SECTIONS 12-36-560, 12-36-570, 12-36-1730, 12-36-1740, 12-36-2660, AND 12-36-2670, SO AS TO PROVIDE CRIMINAL AND CIVIL PENALTIES FOR VIOLATIONS RELATING TO RETAIL LICENSES AND THE CASUAL EXCISE TAX, TO PROVIDE FOR ENFORCEMENT, AND AUTHORIZE THE MEMBERS OF THE TAX COMMISSION OR THEIR DESIGNEES TO ADMINISTER OATHS OR TAKE ACKNOWLEDGMENTS; TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO EXEMPTIONS FROM AD VALOREM TAXATION, SO AS TO FURTHER PROVIDE FOR THE EXEMPTION OF FACILITIES OR EQUIPMENT FOR POLLUTION CONTROL, TO REQUIRE CERTAIN NOTIFICATION TO THE TAX COMMISSION RATHER THAN THE COUNTY AUDITOR, TO DEFINE NONPROFIT HOUSING CORPORATIONS AND ENSURE THAT PROPERTY IS USED EXCLUSIVELY FOR THE ELDERLY AND HANDICAPPED, AND TO EXEMPT ALL INVENTORY FROM THE TAX WITHOUT REFERENCE TO A SPECIFIED EFFECTIVE DATE; TO AMEND SECTION 12-37-2650, AS AMENDED, RELATING TO ISSUANCE OF TAX NOTICES FOR VEHICLES, SO AS TO INFORM TAXPAYERS OF THEIR APPEAL RIGHTS WHEN THEIR PERSONAL PROPERTY IS ASSESSED BY THE COUNTY AUDITOR IN ACCORDANCE WITH TAX COMMISSION REGULATIONS; TO AMEND SECTION 12-39-180, RELATING TO PROPERTY TAX, SO AS TO PROVIDE FOR A UNIFORM MINIMAL ASSESSMENT; TO AMEND SECTION 12-43-220, AS AMENDED, RELATING TO CLASSIFICATION OF PROPERTY AND ASSESSMENT RATIOS FOR PURPOSES OF PROPERTY TAXES, SO AS TO EXTEND THE TIME FOR FILING FOR THE FOUR PERCENT RATIO APPLICABLE TO AN OWNER-OCCUPIED LEGAL RESIDENCE FROM MAY FIRST OF THE FIRST TAX YEAR FOR WHICH THE ASSESSMENT IS CLAIMED TO ANY TIME BEFORE THE FIRST PENALTY DATE FOR TAXES DUE FOR THE FIRST TAX YEAR FOR WHICH THE ASSESSMENT IS CLAIMED, TO REVISE THE DATE FOR THE PUBLISHING OF NOTICES, AND TO MAKE THE EXTENDED DATE APPLY FOR TAX YEARS BEGINNING AFTER 1990; TO AMEND THE 1976 CODE BY ADDING SECTION 12-43-335 SO AS TO PROVIDE FOR THE MANNER IN WHICH THE COMMISSION SHALL ASSESS THE PROPERTY OF MERCHANTS AND RELATED BUSINESSES; TO AMEND SECTION 12-47-70, AS AMENDED, RELATING TO THE ABATEMENT OR REFUND OF INCURRED PROPERTY TAXES, SO AS TO PROVIDE A REFUND PERIOD OF THREE YEARS FROM THE DATE THE TAXES COULD HAVE BEEN PAID WITHOUT A LATE PAYMENT PENALTY; TO AMEND SECTION 12-54-80, AS AMENDED, RELATING TO COLLECTION AND ENFORCEMENT PROCEDURES, SO AS TO REVISE THE MANNER IN WHICH THE SIX-YEAR STATUTE OF LIMITATIONS FOR UNDERREPORTED TAXES MAY BE ADMINISTERED; TO AMEND SECTION 12-54-225, RELATING TO THE AUTHORITY OF THE COMMISSION TO ENTER INTO AGREEMENTS WITH OTHER STATES FOR THE MUTUAL EXCHANGE OF TAX INFORMATION, SO AS TO MAKE IT POSSIBLE FOR THE COMMISSION TO COMPLY WITH THE LAW IF INFORMATION EXCHANGED WITH OTHER STATES IS MISUSED; TO AMEND SECTION 12-54-240, AS AMENDED, RELATING TO DISCLOSURE OF RECORDS OF AND REPORTS AND RETURNS FILED WITH THE TAX COMMISSION BY EMPLOYEES AND AGENTS OF THE COMMISSION AND STATE AUDITOR'S OFFICE PROHIBITED, SO AS TO PROVIDE FOR CERTAIN ADDITIONAL EXCEPTIONS; TO AMEND SECTION 12-54-420, AS AMENDED, RELATING TO THE SETOFF DEBT COLLECTION ACT, SO AS TO ALLOW POLITICAL SUBDIVISIONS TO PARTICIPATE; TO AMEND SECTION 27-18-20, RELATING TO CHECKS OR DRAFTS MAILED TO AN OWNER AND RETURNED UNDELIVERABLE OR NOT PRESENTED FOR PAYMENT, SO AS TO DEFINE UNCLAIMED PROPERTY FOR PURPOSES OF THE SECTION; TO REPEAL SECTION 11-5-110, RELATING TO THE WRITING-OFF OF UNPAID CHECKS BY THE STATE TREASURER; TO AMEND SECTION 33-15-300, RELATING TO EQUAL TREATMENT FOR FOREIGN AND DOMESTIC CORPORATIONS FOR ADMINISTRATIVE CLOSINGS, SO AS TO INCLUDE FAILURE TO PAY INCOME TAXES AS A REASON FOR A CORPORATION TO BE DISSOLVED; TO AMEND ACT 171 OF 1991, RELATING TO THE GENERAL APPROPRIATIONS ACT FOR 1991-92, SO AS TO FURTHER PROVIDE FOR THE MANNER IN WHICH CERTAIN BINGO REVENUE MUST BE DISTRIBUTED; TO PROVIDE THAT FOR THE CALENDAR YEAR OF 1992, PERSONNEL FROM THE ASSESSOR'S OFFICE AND THE PROPERTY DIVISION WILL NOT BE REQUIRED TO ATTEND PRESCRIBED COURSES THE CALENDAR YEAR OF 1992 IF THEY HAVE TAKEN AT LEAST TWO REQUIRED COURSES DURING THE 1991 CALENDAR YEAR; TO ADD SECTION 4-1-175 SO AS TO AUTHORIZE A COUNTY OR MUNICIPALITY TO ISSUE SPECIAL SOURCE REVENUE BONDS AS PROVIDED IN SECTION 4-29-68 AND TO PROVIDE FOR THE MANNER IN WHICH SUCH REVENUES MAY BE PLEDGED AND FOR THE MANNER IN WHICH CONSTITUTIONAL DEBT LIMITATIONS OF THE POLITICAL SUBDIVISION SHALL BE CALCULATED; TO ADD SECTION 4-29-68 SO AS TO AUTHORIZE A COUNTY OR MUNICIPALITY RECEIVING REVENUES FROM A PAYMENT IN LIEU OF TAXES TO ISSUE SPECIAL SOURCE REVENUE BONDS UNDER CERTAIN CONDITIONS; TO AMEND SECTION 4-1-170, RELATING TO COUNTIES JOINTLY DEVELOPING INDUSTRIAL PARKS WITH OTHER COUNTIES, SO AS TO FURTHER PROVIDE FOR THE ALLOCATION OF ASSESSED VALUE OF PROPERTY WITHIN THE PARK TO PARTICIPATING COUNTIES AND THE TAXING ENTITIES WITHIN THESE COUNTIES; TO AMEND SECTION 4-29-67, RELATING TO FEES IN LIEU OF TAXES, SO AS TO REVISE THE MANNER IN WHICH AND CONDITIONS UNDER WHICH FEES IN LIEU OF TAXES ARE AUTHORIZED; TO AMEND SECTION 4-29-80, RELATING TO ADDITIONAL POWERS OF THE GOVERNING BODIES OF COUNTIES AND MUNICIPALITIES IN REGARD TO INDUSTRIAL DEVELOPMENT PROJECTS, SO AS TO FURTHER PROVIDE FOR THESE POWERS; TO PROVIDE FOR THE METHOD TO BE USED FOR CALCULATING FEES IN LIEU OF TAXES IN CONNECTION WITH A WRITTEN AGREEMENT BETWEEN A COUNTY AND AN INVESTOR EXECUTED IN GOOD FAITH PRIOR TO MARCH 15, 1992; TO ADD SECTION 12-23-815 SO AS TO PROVIDE FOR THE MANNER IN WHICH THE TAX COMMISSION SHALL ISSUE ASSESSMENTS FOR HOSPITAL TAXES; AND TO AMEND SECTION 12-23-830, RELATING TO PAYMENT OF HOSPITAL TAXES, SO AS TO FURTHER PROVIDE FOR SUCH PAYMENT.
Be it enacted by the General Assembly of the State of South Carolina:
Applicability of section
SECTION 1. Section 4-9-155 of the 1976 Code is amended by adding:
"(C) The provisions of this section are applicable for tax years beginning after December 31, 1992."
Additional information disclosed to counties and municipalities
SECTION 2. Section 12-4-310(10) of the 1976 Code, as added by Act 168 of 1991, is amended to read:
"(10) make available to the authorities of a municipality or county in this State levying a tax based on gross receipts or net taxable sales, any records indicating the amount of gross receipts or net taxable sales reported to the commission; provided, however, that income tax records may be made available only if the commission first has satisfied itself that the gross receipts reported to the municipality or county were less than the gross receipts as indicated by the records of the commission."
Reference changed
SECTION 3. Section 12-4-730 of the 1976 Code is amended to read:
"Section 12-4-730. The commission, upon receipt of an application and upon proper investigation, may declare the real and personal property of a property owner qualifying for an exemption from ad valorem taxation identified in this chapter as exempt and shall certify the exemption to the auditor's office in the county in which the property is located. Upon certification by the commission, the auditor shall void any tax notice applicable to the property."
Definition revised
SECTION 4. (A) Section 12-7-20(11) of the 1976 Code, as last amended by Act 171 of 1991, Part II, Section 8A, is further amended to read:
"(11) `Internal Revenue Code' means the Internal Revenue Code of 1986 as amended through December 31, 1991."
(B) The provisions of Section 12-7-20(11) of the 1976 Code, as amended by this act, are effective for tax years beginning after 1991.
Apportionment of income of a shipping line
SECTION 5. (A) Section 12-7-640 of the 1976 Code is amended by adding:
"(6) Shipping lines. Where the income is derived principally from the operation of a shipping line, the corporation shall apportion its net apportionable income to South Carolina on the basis of the ratio of revenue tons loaded and unloaded in this State during the income year to the revenue tons loaded and unloaded within and without the State for such year. A revenue ton is a short ton (two thousand pounds) and must be computed by using a standard weight of one hundred ninety pounds per passenger (including free baggage) multiplied by the number of passengers loaded and unloaded."
(B) The provisions of Section 12-7-640(6) of the 1976 Code, as added by the provisions of this act, are effective for tax years beginning after December 31, 1992.
Elimination of filing requirements of exempt organizations; section repealed
SECTION 6. (A) Section 12-7-1510 of the 1976 Code is amended by adding:
"(9) Every exempt organization operating in this State described in Internal Revenue Code Sections 501 through 528 (Exempt Organizations) and 1381 (Cooperatives) with taxable income in South Carolina under Internal Revenue Code Section 501(b) (Unrelated Business Income), or Sections 1382 and 1383 (Taxable Income of Cooperatives)."
(B) Section 12-7-1640 of the 1976 Code, as last amended by Act 345 of 1988, is further amended to read:
"Section 12-7-1640. Returns must be in the form the commission prescribes and must be filed with the commission on or before the fifteenth day of the fourth month next after the preceding income year, except returns of corporations, which shall file returns on or before the fifteenth day of the third month next after the preceding income year. Returns of organizations exempt under Internal Revenue Code Section 501 reporting unrelated business income pursuant to Section 12-7-1510(9), must be filed on or before the fifteenth day of the fifth month following the taxable year. Returns of information provided for by Section 12-7-1590 must be filed before March fifteenth of each year and shall set forth the information required by Section 12-7-1590 for the calendar year next preceding."
(C) Section 12-19-20(a) of the 1976 Code, as last amended by Act 444 of 1988, is further amended to read:
"(a) Every corporation organized under the laws of this State and every corporation organized to do business under the laws of any other state, territory, or country and qualified to do business in South Carolina and any other corporation required by Section 12-7-230 to file income tax returns, in addition to any other requirements of law, must make a report annually to the Tax Commission on or before the fifteenth day of the third month next after the preceding income year in a form prescribed by the Tax Commission and Secretary of State containing all information and facts either the Tax Commission or the Secretary of State may require for the administration of the provisions of this chapter and the provisions of Title 33."
(D) Section 12-19-150 of the 1976 Code is amended to read:
"Section 12-19-150. The provisions of this chapter do not apply to any nonprofit corporation organized under Chapters 31 or 33 of Title 33 exempt from income taxes pursuant to Section 501 of the Internal Revenue Code of 1986, any volunteer fire departments and rescue squads, any cooperative organized under Chapter 45 or 47 of Title 33, any building and loan association or any credit union doing a strictly mutual business or to any insurance, fraternal, beneficial, or mutual protection companies or associations or to any foreign corporation whose entire income is not included in gross income for federal income tax purposes due to any treaty obligation of the United States."
(E) Section 33-31-50 of the 1976 Code is amended to read:
"Section 33-31-50. Upon the filing of the above declaration and the payment of a charter fee of fifteen dollars the Secretary of State shall issue to the proposed corporation a certificate of incorporation for the term that may be fixed in the declaration, or, in the absence of the limitation, in perpetuity. Churches, religious organizations, religious societies, religious institutions, and volunteer fire departments shall pay a charter fee of three dollars."
(F) Section 33-35-50 of the 1976 Code is amended to read:
"Section 33-35-50. Upon filing any articles of incorporation, amendment thereof, or other paper relating to the incorporation, merger, consolidation, or dissolution of any corporation not for profit in the office of the Secretary of State, the following fees must be paid to him for the use of the State:
(1) a filing fee of ten dollars for the filing and approval of articles of incorporation;
(2) a fee of one dollar for the first page, fifty cents for each additional page and two dollars for authentication for furnishing certified copies of articles of incorporation or other documents concerning a corporation not for profit;
(3) a fee of five dollars in each case for filing papers relating to dissolution or amendment of articles of incorporation."
(G) Section 33-35-150 of the 1976 Code is repealed.
(H) The amendments to Sections 12-7-1510, 12-7-1640, 12-19-20, 12-19-150, 33-31-50, and 33-35-50 of the 1976 Code, as contained in this section, and the repeal of Section 33-35-150 of the 1976 Code, as contained in this section, are effective for tax years beginning on or after January 1, 1993.
Assessment provisions revised
SECTION 7. Section 12-7-1675 of the 1976 Code, as last amended by Act 659 of 1988, Section 30A, is further amended to read:
"Section 12-7-1675. Notwithstanding the provisions of Sections 12-7-1650 and 12-7-1670, the commission shall notify any domestic or foreign corporation of its failure to comply with the provisions of Chapters 7 and 19 of this title requiring the filing of returns. If the taxpayer fails to file the required return within sixty days of the notice, the commission may provide the Secretary of State the name of the taxpayer failing to file a return and the Secretary of State shall administratively dissolve the corporation if it is a domestic corporation and shall revoke its certificate of authority if it is a foreign corporation authorized to transact business in this State. The commission may not make an estimated assessment or issue any warrant based on such estimated assessment against a taxpayer prior to referring such taxpayer to the Secretary of State for administrative dissolution or revocation."
Records retained for six years
SECTION 8. (A) Section 12-7-1680 of the 1976 Code is amended to read:
"Section 12-7-1680. Except in accordance with proper judicial order or as otherwise provided by law, it is unlawful for the members of the commission or any deputy, agent, clerk, or other officer or employee thereof to divulge or make known in any manner the amount of income or any particulars set forth or disclosed in any report or return required under this chapter. Nothing in this section may be construed to prohibit the publication of statistics so classified as to prevent the identification of particular reports or returns and the items thereof or the inspection by the Attorney General or other legal representative of the State of the report or return of any taxpayer who shall bring action to set aside or review the tax based thereon or against whom an action or proceeding has been instituted to recover any tax or any penalty imposed by this chapter. Reports and returns must be preserved for six years and thereafter until the commission orders them to be destroyed.
Any offense against this section shall be punished by a fine of not exceeding one thousand dollars or by imprisonment not exceeding one year, or both, at the discretion of the court, and if the offender be an officer or employee of the State he shall be dismissed from office and be incapable of holding any public office in this State for a period of five years thereafter."
(B) Section 12-9-670 of the 1976 Code is amended to read:
"Section 12-9-670. Except in accordance with the proper judicial order or as otherwise provided by law, it shall be unlawful for the members of the commission or any deputy, agent, clerk, or other officer or employee thereof to divulge or make known in any manner the amount of withholding of income or any particulars set forth or disclosed in any report or return required under this chapter. Nothing in this section shall be construed to prevent the publication of statistics so classified as to prevent the identification of particular reports or returns in the items thereof or the inspection by the Attorney General or other legal representative of the State of the report or the return of any taxpayer who shall bring action to set aside or review the tax based thereon or against whom an action or proceeding has been instituted to recover any tax or any penalty imposed by this chapter. Reports and returns shall be preserved for six years and thereafter until the commission orders them to be destroyed.
Any person violating the provisions of this section shall, upon conviction, be punished by a fine not exceeding one thousand dollars or by imprisonment not exceeding one year, or both, at the discretion of the court, and if the offender is an officer or an employee of the State he shall be dismissed from office and be disqualified from holding any public office in this State for a period of five years thereafter."
(C) Section 12-54-240(B)(1) of the 1976 Code is amended to read:
"(1) publication of statistics classified to prevent the identification of particular reports or returns and the items included on them or the inspection by the Attorney General or other legal representative of the State of the report or return of any taxpayer who brings an action to set aside or review the tax based on the report or return or against whom an action or proceeding has been instituted to recover any tax or any penalty imposed by this chapter, or of any taxpayer who has applied for review of any adjustment proposed by the commission, or of any taxpayer filing a petition for redetermination of a deficiency assessed by the commission. Reports and returns must be preserved for six years and thereafter until the commission orders them to be destroyed."
Tax check-offs restricted to individual returns
SECTION 9. (1) Subsections (A) and (B) of Section 12-7-2415 are amended to read:
"(A) Each taxpayer required to file a state individual income tax return who desires to contribute to the nongame wildlife and natural areas program of the State may designate the contribution on the appropriate state income tax form. The contribution may not increase or decrease the income tax liability of the taxpayer, and may be made by reducing the income tax refund of the taxpayer by the amount designated or by accepting additional payment from the taxpayer by the amount designated, whichever is appropriate.
(B) All South Carolina individual income tax return forms must contain a designation for a contribution to the nongame and natural areas program. The instructions accompanying the income tax form shall contain a description of the purposes for which the nongame species and habitat acquisition programs were established and the use of monies from the income tax contribution."
(2) Subsections (A) and (B) of Section 12-7-2416 of the 1976 Code are amended to read:
"(A) Each individual taxpayer required to file a state income tax return who desires to contribute to the Children's Trust Fund of South Carolina as created by Section 20-7-5010 may designate the contribution on the appropriate state income tax form. The contribution may not increase or decrease the income tax liability of the taxpayer and may be made by reducing the income tax refunds of the taxpayer by the amount designated or by accepting additional payment from the taxpayer by the amounts designated, whichever is appropriate.
(B) All South Carolina individual income tax return forms must contain a designation for a contribution to the Children's Trust Fund of South Carolina. Contributions of other amounts may be made directly to the Children's Trust Fund. The instructions accompanying income tax forms must contain a description of the purposes for which the Children's Trust Fund was established and the use of monies from the income tax contribution."
(3) The provisions of Sections 12-7-2415 and 12-7-2416, as amended by this act, take effect for returns due to be filed for taxable years beginning on or after January 1, 1992.
Exemptions from withholding requirements revised
SECTION 10. (A) Section 12-9-310(A)(3) of the 1976 Code is amended to read:
"(3) hiring or contracting or having a contract with a nonresident taxpayer conducting a business or performing personal services of a temporary nature carried on within this State, where the contract exceeds ten thousand dollars or reasonably could be expected to exceed ten thousand dollars, must withhold two percent of each and every payment made to these nonresidents. This item does not apply to a utility hiring or contracting or having a contract with any nonresident utility or to a county hiring or contracting with a person not in its regular employ to perform services of a temporary nature relating to damage caused by natural forces. For purposes of this item:
(a) `natural forces' means conflagration, flood, storm, earthquake, hurricane, or other public calamity;
(b) `utility' means a person, public utility, electric cooperative, special purpose district, authority, or political subdivision producing, storing, conveying, transmitting, or distributing communication, electricity, gas, water, steam, or sewerage; and
(c) `county' means a county of this State.
This item also does not apply to amounts paid to:
a nonresident contractor performing work under a contract with the South Carolina Department of Highways and Public Transportation; and
a nonresident subcontractor performing work for a contractor who is operating under a contract with the South Carolina Department of Highways and Public Transportation.
For purposes of this item, the term nonresident does not include motion picture companies as defined in Section 12-36-2120 nor does it include entities performing personal services for motion picture companies when the motion picture companies and the personal service companies obtain a certificate of authority from the Secretary of State pursuant to Title 33.
The commission may grant partial or total exemption from the provisions of this subsection where:
(a) a portion of the contract is performed outside of this State;
(b) a portion of the contract consists of providing tangible personal property or material;
(c) a portion of the contract is subcontracted to others; or
(d) the taxpayer is not conducting business of a temporary nature in this State as evidenced by substantial assets or a place of business located in this State.
The conditions set forth in item (3) of this section may be waived by the commission, provided the payee shall insure the commission by bond, secured by an insurance company licensed by the South Carolina Insurance Commission, or deposit of securities subject to approval by the State Treasurer, or cash which shall not bear interest, that the payee will comply with all applicable provisions of Chapter 7 of this title and with the withholding requirements insofar as his obligations as a withholding agent are concerned."
(B) The provisions of Section 12-9-310(A)(3) of the 1976 Code, as amended by this act, are effective for taxable years beginning after December 31, 1992.
Withholding agent defined
SECTION 11. Section 12-9-420 of the 1976 Code is amended to read:
"Section 12-9-420. Every withholding agent who fails or neglects to withhold or pay to the commission any sums required by this chapter to be withheld and paid is personally and individually liable therefor, and any sum or sums withheld in accordance with the provisions of Sections 12-9-310 to 12-9-370 are to be held in trust for the State. An employee is entitled to a credit for the amount of income tax withheld from his wages even though the employer failed to remit and pay over the amount to the Tax Commission. The term `withholding agent', as used in this section, includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs."
Reference date revised
SECTION 12. (A) Section 12-16-20(5) of the 1976 Code is amended to read:
"(5) `Internal Revenue Code' means the Internal Revenue Code of 1986, as amended through December 31, 1991."
(B) The provisions of Section 12-16-20 of the 1976 Code, as amended by this act, are effective for tax years beginning after 1991.
Other methods of accounting for admissions
SECTION 13. The 1976 Code is amended by adding:
"Section 12-21-2575. In lieu of the issuance of tickets as provided for in this article, the commission may authorize or approve other methods of accounting for paid admissions."
Exemption of certain machines
SECTION 14. Section 12-21-2720(1) of the 1976 Code, as amended by Act 171 of 1991, Part II, Section 14A, is further amended to read:
"(1)(a) Any machine for the playing of music or kiddy rides operated by a slot or mechanical amusement devices and juke boxes wherein is deposited any coin or thing of value.
(b) Any machine on which an admissions tax is imposed is exempt from the C.O.D. license provisions of this section."
Method of calculating amount of fuel used revised
SECTION 15. (A) Section 12-31-420 of the 1976 Code is amended to read:
"Section 12-31-420. The amount of tax due must be calculated upon the amount of gasoline or other motor fuel used by the motor carrier in its operation within this State during the reporting period. The Tax Commission shall develop forms to reflect the tax due in accordance with nationally recognized standards."
(B) The provisions of Section 12-31-420 of the 1976 Code, as amended by this act, are effective for returns due on or after July 1, 1992.
Sales and use tax revisions
SECTION 16. (A) Items (1) and (4) of Section 12-36-120 of the 1976 Code are amended to read:
"(1) tangible personal property to licensed retail merchants, jobbers, dealers, or wholesalers for resale, and do not include sales to users or consumers not for resale;
(4) materials, containers, cores, labels, sacks, or bags used incident to the sale and delivery of tangible personal property, or used by manufacturers, processors, and compounders in shipping tangible personal property."
(B) That portion of Section 12-36-910(B) which precedes item (1) is amended to read:
"The sales tax imposed by this article also applies to the:"
(C) Section 12-36-920 of the 1976 Code is amended by adding:
"(E) The taxes imposed by this section are imposed on every person engaged or continuing within this State in the business of furnishing accommodations to transients for consideration."
(D) Section 12-36-930(A)(2) of the 1976 Code is amended to read:
"(2) the tax that would be imposed under this chapter."
(E) Section 12-36-2120(9)(d) of the 1976 Code is amended to read:
"(d) the generation of motive power for transportation. For the purposes of this exemption, `manufacturer' or `manufacturing' includes the activities of mining and quarrying;"
(F) Section 12-36-2120(12) of the 1976 Code is amended to read:
"(12) water sold by public utilities, if rates and charges are of the kind determined by the Public Service Commission, or water sold by nonprofit corporations organized pursuant to Sections 33-35-10 to 33-35-170;"
(G) Section 12-36-2120(26) of the 1976 Code is amended to read:
"(26) all supplies, technical equipment, machinery, and electricity sold to radio and television stations, and cable television systems, for use in producing, broadcasting, or distributing programs. For the purpose of this exemption, radio stations, television stations, and cable television systems are deemed to be manufacturers;"
(H) The first paragraph of Section 12-36-2560 of the 1976 Code is amended to read:
"On all sales of retailers liable for the tax imposed by Article 9 of this chapter (sales tax) made on an installment basis which conform to the provisions of the Uniform Commercial Code in which the retailer takes a security interest, the vendor may elect to include in the return only the portion of the sales price actually received by the retailer during the taxable period or to include the entire sales price in the return for the taxable period during which the sale was consummated. Having once elected either method of reporting the sales, the taxpayer must continue unless and until permission has been received from the commission to make a change. Nothing in this section may be construed to permit delay in reporting sales under other terms of credit or cash sales."
(I) Section 12-36-2650 of the 1976 Code is amended to read:
"Section 12-36-2650. The taxes imposed by this chapter are in addition to all other taxes, licenses, and charges and no provisions of this chapter may be construed to relieve a person from the payment of a license or privilege tax now or hereafter imposed by law."
(J) Article 5, Chapter 36, Title 12 of the 1976 Code is amended by adding:
"Section 12-36-560. A person liable for the license tax provided by this article who engages in business as a seller or retailer in this State without a retail license or after the license has been suspended, and each officer of a corporation which engages in business without a retail license or after the license is suspended, is guilty of a misdemeanor and, upon conviction, must be punished by a fine of not more than two hundred dollars or imprisonment not exceeding thirty days, or both. Offenses under this section are triable in magistrate's court.
Section 12-36-570. A person liable for the license tax provided by this article who fails to pay the tax or obtain the license within the time provided or who fails to comply with a lawful regulation of the commission is liable for a penalty not to exceed five hundred dollars."
(K) Article 17, Chapter 36, Title 12 of the 1976 Code is amended by adding:
"Section 12-36-1730. A person who wilfully or knowingly makes a false statement for the purpose of avoiding all or a part of the casual excise tax imposed by this article or who assists another person to avoid all or a part of the casual excise tax levied by this article is guilty of a misdemeanor and, upon conviction, must be punished by a fine of not more than two hundred dollars or imprisoned not more than thirty days, or both. Offenses under this section are triable in magistrate's court.
Section 12-36-1740. A person liable for the casual excise tax provided by this article who fails to pay the tax or comply with a lawful regulation of the commission is liable for a penalty not to exceed five hundred dollars."
(L) Article 25, Chapter 36, Title 12 of the 1976 Code is amended by adding:
"Section 12-36-2660. The Tax Commission shall administer and enforce the provisions of this chapter.
Section 12-36-2670. The commissioners or their designees may administer an oath to a person or take the acknowledgement of a person with respect to a return or report required by this title or the regulations of the commission."
Exemption of facilities or equipment for pollution control revised
SECTION 17. (A) Section 12-37-220 A.(8) of the 1976 Code, as amended, is further amended to read:
"(8) all facilities or equipment of industrial plants which are designed for the elimination, mitigation, prevention, treatment, abatement, or control of water, air, or noise pollution, both internal and external, required by the state or federal government and used in the conduct of their business. At the request of the Tax Commission the Department of Health and Environmental Control shall investigate the property of any manufacturer or company, eligible for the exemption to determine the portion of the property that qualifies as pollution control property. Upon investigation of the property, the department shall furnish the commission with a detailed listing of the property that qualifies as pollution control property. For equipment that serves a dual purpose of production and pollution control, the value eligible for the ad valorem exemption is the difference in cost between this equipment and equipment of similar production capacity or capability without the ability to control pollution;"
(B) The provisions of Section 12-37-220 A.(8) of the 1976 Code, as amended by this act, are effective for tax years beginning after December 31, 1992.
Notification to Tax Commission required
SECTION 18. Section 12-37-220 B.(1) of the 1976 Code is amended to read:
"(1) The dwelling house in which he resides and a lot not to exceed one acre of land owned in fee or for life, or jointly with a spouse, by any veteran who is one hundred percent permanently and totally disabled from a service-connected disability, if the veteran files a certificate signed by the county service officer of the total and permanent disability with the State Tax Commission. The exemption is allowed the surviving spouse of the veteran and is also allowed to the surviving spouse of a serviceman killed in action in the line of duty who owned the lot and dwelling house in fee or for life, or jointly with his spouse, so long as the spouse does not remarry, resides in the dwelling, and obtains by devise the fee or a life estate in the dwelling. A surviving spouse who disposes of the exempt dwelling and acquires another residence in this State for use as a dwelling house with a value no greater than one and one-half times the fair market value of the exempt dwelling may apply for and receive the exemption on the newly acquired dwelling, but no subsequent dwelling of a surviving spouse is eligible for exemption under this item. The spouse shall inform the Tax Commission of the change in address of the dwelling. The dwelling house is defined as a person's legal residence."
Nonprofit housing corporation exemption revised
SECTION 19. Section 12-37-220 B.(11) of the 1976 Code is amended to read:
"(11) All property of nonprofit housing corporations devoted exclusively to providing below-cost housing for the aged or for handicapped persons or for both aged and handicapped persons as authorized by Section 202 of the Housing Act of 1959 and regulated by regulations that appear in the Federal Register, 24 CFR Part 885. The reference date of the Housing Act of 1959 is as provided in Section 12-7-20(11)."
Inventory tax exemption revised
SECTION 20. Section 12-37-220 B.(30) of the 1976 Code is amended to read:
"(30) All inventories."
Notification to taxpayers of appeal rights
SECTION 21. Section 12-37-2650 of the 1976 Code, as amended by Act 576 of 1988, is further amended by adding at the end:
"Tax bills (notices) for county assessed personal property valued in accordance with applicable Tax Commission regulations must include notification of the taxpayer's appeal rights, to include a minimum amount of information of how the taxpayer should file his appeal, to whom, and within what time period."
Minimum assessment on taxable property
SECTION 22. Section 12-39-180 of the 1976 Code is amended to read:
"Section 12-39-180. Each county auditor, after receiving from the Comptroller General and from such other officers and authorities as are legally empowered to determine the rate or amount of taxes to be levied for the various purposes authorized by law statements of the rates and sums to be levied for the current year, shall forthwith proceed to determine the sums to be levied upon each tract and lot of real property and upon the amount of personal property, monies, and credits listed in his county in the name of each person, which must be assessed equally on all real and personal property subject to such taxes and set down in one or more columns in the manner and form as the Comptroller General shall prescribe. The Tax Commission or the county auditor shall place a minimum assessment of at least twenty dollars on all property that generates a tax bill."
Time for filing extended; time for publishing notices revised
SECTION 23. (A) The first and second paragraphs of Section 12-43-220(c) of the 1976 Code, as last amended by Act 637 of 1988, are further amended to read:
"The legal residence and not more than five acres contiguous thereto, when owned totally or in part in fee or by life estate and occupied by the owner of the interest, is taxed on an assessment equal to four percent of the fair market value of the property. When the legal residence is located on leased or rented property and the residence is owned and occupied by the owner of a residence on leased property, even though at the end of the lease period the lessor becomes the owner of the residence, the assessment for the residence is at the same ratio as provided in this item. If the lessee of property upon which he has located his legal residence is liable for taxes on the leased property, then the property upon which he is liable for taxes, not to exceed five acres contiguous to his legal residence, must be assessed at the same ratio provided in this item. If this property has located on it any rented mobile homes or residences which are rented or any business for profit, this four percent value does not apply to those businesses or rental properties. This subsection (c) is not applicable unless the owner of the property or his agents make written application to the county assessor on or before the first penalty date for taxes due for the first tax year in which the assessment under this article is made and certify to the following statement: `Under the penalty of perjury I certify that I meet the qualifications for the special assessment ratio for a legal residence as of January first of the appropriate tax year'.
The assessor shall have printed in the local newspaper during the period January through December at least five notices calling to public attention the provisions of filing the application as a prerequisite for claiming this classification. Failure to file within the prescribed time constitutes abandonment of the owner's right for this classification for the current tax year, but the local taxing authority may extend the time for filing upon a showing satisfactory to it that the person had reasonable cause for not filing on or before the first penalty date."
(B) The provisions of Section 12-43-220(c) of the 1976 Code, as amended by this act, are effective for property tax years beginning after 1990.
Assessment of property of merchants and related businesses
SECTION 24. (A) The 1976 Code is amended by adding:
"Section 12-43-335. For the purpose of assessing property of merchants and related businesses, as provided by Section 12-37-970, the Tax Commission shall follow the classifications of the Standard Industrial Classification Manual, Bureau of the Budget, 1987 edition, as set out below:
1. Division C;
2. Division E, Major Group 48, except numbers 481 and 482;
3. Division F;
4. Division G;
5. Division I, Major Groups 72, 73, 75, 76, 78, and 79."
(B) Section 12-43-335 of the 1976 Code, as added by this act, is effective for the tax year 1991 and thereafter.
Refund period revised
SECTION 25. (A) Section 12-47-70 of the 1976 Code, as amended by Act 78 of 1989, is further amended to read:
"Section 12-47-70. An incorrect property tax assessment or collection by a county, municipality, or other political subdivision must be abated or refunded by the county, municipality, or other political subdivision when a claim for the abatement or refund is made within three years from the date the taxes could have been paid without a late payment penalty. This section does not apply to an abatement or refund claim that is based upon the property's valuation, it being specifically intended that the value of property for tax purposes be resolved by the assessors of real or personal property and the boards or commissions established therefor."
(B) The provisions of Section 12-47-70 of the 1976 Code, as amended by this act, are effective for tax years beginning after December 31, 1992.
Applicability of six-year statute of limitations
SECTION 26. Section 12-54-80(2) of the 1976 Code is amended to read:
"(2) In the case of any tax administered by the commission, if the taxpayer omits at least twenty-five percent of gross amount stated in any tax return or document (for example, gross proceeds of sales, sales price, gross receipts, gross income, gross kilowatt hours, appraised value, gross capitalized cost, and similar factors) under provisions of law administered by the commission, the tax may be assessed within six years after the return was filed."
When exchange agreement must be canceled
SECTION 27. Section 12-54-225 of the 1976 Code is amended to read:
"Section 12-54-225. The commission may enter into agreements with other states of the United States or their authorized representatives for the mutual exchange of tax returns, information thereon, and related information. The commission may, if it chooses, designate a third person to act as its agent for the receipt and exchange of the returns and information, including the assimilation of the material for proper use. The exchange may be in any form suitable to the parties, including, but not limited to, cards, tapes, and other electronic means. The returns and information exchanged may be used for the exclusive purpose of administering the tax laws of the exchanging jurisdictions, including any administrative or judicial proceeding that involves the administration, collection, or recovery of any tax. The agreements may be on such terms and conditions as the commission and the other states may agree and designate. However, any such agreement entered into by the commission must include a provision that the agreement may be canceled upon notice."
Exceptions provided
SECTION 28. Section 12-54-240(B) of the 1976 Code, as last amended by Act 171 of 1991, Part II, Section 43B, is further amended by adding:
"(11) disclosure of information contained on any return to the South Carolina Employment Security Commission, South Carolina Department of Highways and Public Transportation, or to the Department of the Treasury, Alcohol, Tobacco and Firearms Division.
(12) disclosure of whether a resident or nonresident tax return was filed by any particular taxpayer to the South Carolina Wildlife and Marine Resources Department."
Claimant agency to include a political subdivision
SECTION 29. Section 12-54-420(1) of the 1976 Code, as amended by Act 168 of 1991, is further amended to read:
"(1) `Claimant agency' means a state agency, board, committee, commission, public institution of higher learning, political subdivision, and the Internal Revenue Service. It also includes a private institution of higher learning for the purpose of collecting debts related to default on authorized educational loans made pursuant to Chapter 111, 113, or 115 of Title 59."
Definition of unclaimed property; section repealed
SECTION 30. (A) Section 27-18-20 of the 1976 Code is amended by adding:
"(18) `Unclaimed' property includes:
(a) checks or drafts mailed to an owner and returned as undeliverable, or
(b) checks or drafts mailed to an owner and not presented for payment."
(B) Section 11-5-110 of the 1976 Code is repealed.
Additional reason for a corporation to be dissolved
SECTION 31. Section 33-15-300(a)(2) of the 1976 Code is amended to read:
"(2) the foreign corporation does not pay, when they are due, any franchise taxes, taxes payable under Chapter 7 of Title 12, or penalties imposed by this act or other law;"
Distribution of certain bingo revenue
SECTION 32. (1) Subsection A., Section 32, Part II of Act 171 of 1991, is amended to read:
"A. In addition to the bingo taxes levied under the provisions of Section 12-21-3440(B) of the 1976 Code, and beginning July 1, 1991, an additional one dollar is levied for each bingo player a session for sessions conducted by holders of a Class AA license and an additional fifty cents is levied for each bingo player a session for sessions conducted by holders of a Class B license each fiscal year. Nine hundred forty-eight thousand dollars of the total revenues received from bingo taxes as provided by Section 12-21-3440 and collected by the Tax Commission must be deposited monthly in equal amounts into an account in the office of the State Treasurer and called `Commission on Aging Senior Citizen Centers Permanent Improvement Fund' (Fund). All interest earned on monies in the fund must be credited to the fund. The remaining revenues if any, generated by the bingo taxes must be deposited as provided in Section 12-21-3590."
(2) The provisions of subsection A., Section 32, Part II of Act 171 of 1991, as amended by this act, are effective beginning on July 1, 1992.
Course attendance not required
SECTION 33. For the calendar year 1992, personnel from the assessor's office and the Property Division of the South Carolina Tax Commission shall not be required to attend courses required by Section 12-37-110 and applicable regulations if they have taken two required courses during the 1991 calendar year.
Special source revenue bonds authorized; pledging of revenues; determination of debt limitation
SECTION 34. Chapter 1, Title 4 of the 1976 Code is amended by adding:
"Section 4-1-175. A county or municipality receiving revenues from a payment in lieu of taxes pursuant to Section 13 of Article VIII of the Constitution of this State may issue special source revenue bonds secured by and payable from all or a part of that portion of the revenues which the county is entitled to retain pursuant to the agreement required by Section 4-1-170 in the manner and for the purposes set forth in Section 4-29-68. The county or municipality may pledge the revenues for the additional securing of other indebtedness in the manner and for the purposes set forth in Section 4-29-68.
A political subdivision of this State subject to the limitation of either Section 14(7)(a) or Section 15(6) of Article X of the Constitution of this State pledging pursuant to this section all or a portion of the revenues received and retained by that subdivision from a payment in lieu of taxes to the repayment of any bonds shall not include in the assessed value of taxable property located in the political subdivision for the purposes of calculating the limit imposed by those sections of the Constitution any amount representing the value of the property that is the basis of the pledged portion of revenues. If the political subdivision, before pledging revenues pursuant to this section, has included an amount representing the value of a parcel or item of property that is the subject of a payment in lieu of taxes in the assessed value of taxable property located in the political subdivision and has issued general obligation debt within the debt limit calculated on the basis of such assessed value, then it may not pledge pursuant to this section revenues based on the item or parcel of property, to the extent that the amount representing its value is necessary to permit the outstanding general obligation debt within the debt limit of the political subdivision."
Special source revenue bonds authorized
SECTION 35. Chapter 29, Title 4 of the 1976 Code is amended by adding:
"Section 4-29-68. (A) A county or municipality that receives and retains revenues from a payment in lieu of taxes pursuant to Section 4-29-60 or Section 4-29-67 may issue special source revenue bonds secured by and payable from all or a part of such revenues, subject to the following terms and conditions:
(1) The issuance of bonds is authorized by a duly adopted ordinance of the governing body of the issuer, after a public hearing is held at least fifteen days after notice of the hearing is published in a newspaper of general circulation in the county or municipality.
(2) The bonds are issued solely for the purpose of paying the cost of designing, acquiring, constructing, improving, or expanding the infrastructure serving the issuer in order to enhance the economic development of the issuer and costs of issuance of the bonds.
(3) The bonds may include amounts for capitalized interest for a period not to extend beyond the later of (a) the date that is three years from the date of issuance of the bonds and (b) the first date on which any ad valorem taxes (including, but not limited to, county or school district taxes) would have been payable on the property (other than unimproved real property) which is the subject of the payment in lieu of taxes.
(4) The issuer may use proceeds of the bonds (a) directly for infrastructure owned or controlled by the issuer or (b) to make loans or grants to, or to participate in joint undertakings with, other agencies or political subdivisions of the State that own or control the infrastructure referred to in item (2) of this subsection.
(5) The bonds are, and must state on their face that they are, (a) payable solely from all or a specifically described part of the payments in lieu of taxes received and retained by the issuer under Section 4-29-60, Section 4-29-67, or Section 13 of Article VIII of the Constitution of this State, (b) not secured by, or in any way entitled to, a pledge of the full faith, credit, or taxing power of the issuer, (c) not an indebtedness of the issuer within the meaning of any state constitutional provision or statutory limitation but are payable solely from a special source that does not include revenues from any tax or license, and (d) not a pecuniary liability of the issuer or a charge against the issuer's general credit or taxing power.
(6) The ordinance authorizing the issuance of the bonds shall specifically describe the portion of the payments in lieu of taxes received and retained by the issuer from which the bonds are payable and by which the bonds are secured.
(7) The bonds may be executed and delivered at any time as a single issue or from time to time as several issues, be in the form and denominations, be of the tenor, be payable in the installments and at the time or times not to exceed the time over which payments in lieu of taxes are scheduled to be received, be subject to the terms of redemption, be payable at the place or places, bear interest at the rate or rates which is payable at the place or places, and contain provisions not inconsistent with this section, all of which must be provided in the ordinance authorizing the bonds.
(8) The bonds may be sold at public or private sale at the prices and in the manner and from time to time as may be determined by the governing board to be most advantageous, and the governing board may pay, as a part of the costs described in item (2) of this subsection, and out of the bond proceeds, all expenses, premiums, commissions, and expenses which the governing board considers necessary or advantageous in connection with the authorization, sale, and issuance of the bonds.
(9) The ordinance may provide for the issuance, in the future, of further bonds on a parity with those initially issued, but the proceedings preclude the issuance of bonds or any applications of any sort secured by a lien prior to the lien of the bond or bonds afterward issued on a parity with the bonds.
(10) Pending the issuance of bonds, bond anticipation notes may be issued, and to the end that a vehicle be provided therefor, the provisions of Section 11-17-10 to Section 11-17-110, as now or hereafter amended, are applicable to the bond anticipatory borrowing.
(11) The ordinance authorizing the issuance of the bonds may contain agreements and provisions customarily contained in the instruments securing revenue or special source bonds as the governing board considers advisable, but the issuer does not have the power to obligate itself to impose or maintain any particular level of tax rates.
(B) A county or municipality that receives and retains revenues from a payment in lieu of taxes pursuant to Section 4-29-60 or Section 4-29-67 may pledge the revenues as additional security for general obligation debt or revenue debt of the issuer if the general obligation debt or revenue debt is issued in accordance with items (1) and (2) of this subsection.
(C) A county or municipality that receives and retains revenues from a payment in lieu of taxes pursuant to Section 4-29-60 or Section 4-29-67 may pledge the revenues as additional security for general obligation debt or revenue debt of other agencies or political subdivisions of the State referred to in item (4)(b) of this subsection if the pledge is authorized by a duly-adopted ordinance of the governing body of the county or municipality after a public hearing is held at least fifteen days after notice of the hearing is published in a newspaper of general circulation in the county or municipality and if the general obligation debt or revenue debt to which the revenues received from a payment in lieu of taxes are pledged is issued solely for the purpose of paying the cost of designing, acquiring, constructing, improving, or expanding the infrastructure serving the county or municipality in order to enhance the economic development of the county or municipality and costs of issuance of the bonds.
(D) Revenues received by a county or municipality which may be pledged or from which bonds may be payable and secured pursuant to this Section 4-29-68 or Section 4-1-175 may be used jointly to pay or secure a single series of bonds.
(E) A political subdivision of this State subject to the limitation of either Section 14(7)(a) or Section 15(6) of Article X of the Constitution of this State pledging pursuant to this section all or a portion of the revenues received and retained by that subdivision from a payment in lieu of taxes to the repayment of any bonds shall not include in the assessed value of taxable property located in the political subdivision for the purposes of calculating the limit imposed by those sections of the Constitution any amount representing the value of the property that is the basis of the pledged portion of revenues. If the political subdivision, before pledging revenues pursuant to this section, has included an amount representing the value of a parcel or item of property that is the subject of a payment in lieu of taxes in the assessed value of taxable property located in the political subdivision and has issued general obligation debt within the debt limit calculated on the basis of such assessed value, then it may not pledge pursuant to this section revenues based on the item or parcel of property, to the extent that the amount representing its value is necessary to permit the outstanding general obligation debt within the debt limit of the political subdivision."
Allocation of assessed value of property within park
SECTION 36. Section 4-1-170 of the 1976 Code, as added by Act 139 of 1989, is amended to read:
"Section 4-1-170. By written agreement, counties may develop jointly an industrial or business park with other counties within the geographical boundaries of one or more of the member counties as provided in Section 13 of Article VIII of the Constitution of this State. The written agreement entered into by the participating counties must include provisions which:
(1) address sharing expenses of the park;
(2) specify by percentage the revenue to be allocated to each county;
(3) specify the manner in which revenue must be distributed to each of the taxing entities within each of the participating counties.
For the purpose of bonded indebtedness limitation and for the purpose of computing the index of taxpaying ability pursuant to Section 59-20-20(3), allocation of the assessed value of property within the park to the participating counties and to each of the taxing entities within the participating counties must be identical to the allocation of revenue received and retained by each of the counties and by each of the taxing entities within the participating counties."
Revision of fee in lieu of taxes
SECTION 37. Section 4-29-67 of the 1976 Code, as last amended by Act 173 of 1989, is further amended to read:
"Section 4-29-67. (A) Notwithstanding the provisions of Section 4-29-60, in the case of a financing agreement in the form of a lease or a lease purchase, for a project qualifying under subsection (B), the county and the investor may enter into an inducement agreement which provides for payment in lieu of taxes (fee) as provided in this section.
(B) In order to qualify for the fee as provided in subsection (D)(2):
(1) Title to the property must be held by the county or in the case of a project located in an industrial development park as defined in Section 4-1-170 title may be held by more than one county provided each county is a member of the industrial development park.
(2) The investment must be a project which is located in a single county or an industrial development park as defined in Section 4-1-170.
(3) The minimum level of investment must be at least eighty-five million dollars and must be invested within the time period provided in subsection (C).
(4) (a) Except as provided in subsection (B)(4)(b), the investment must be made by a single taxpayer in the form of a corporation or a partnership.
(b) The members of the same controlled group of corporations as defined in Section 1563 of the Internal Revenue Code of 1986 can qualify for the fee if the combined investment in the county by the members meets the minimum investment requirements. The members whose investments will be used to meet the minimum level of investment must all be parties to any agreements providing the terms for payment of the fee. The county and the members who are part of the inducement agreement may agree that any investments by other members of the controlled group within the time period provided in subsection (C)(1) shall qualify for the payment regardless of whether the member was part of the inducement agreement. Members of the controlled group which are not parties to the inducement agreement must invest at least ten million dollars in the county and must notify the Tax Commission that the investment is subject to the fee before the execution of the lease agreement covering the investment by the member. The investments under subsection (B)(4)(b) must be within the same county.
In order to qualify under this provision, investors claiming the fee must be members of the same controlled group at the time of the inducement agreement and all lease agreements which are executed by the parties.
Members of the controlled group must provide the information considered necessary by the Tax Commission to ensure that the investors are part of a controlled group.
(C) (1) From the end of the property tax year in which the investor and the county execute the initial lease or lease purchase agreement, the investor has five years in which to complete its investment for purposes of qualifying for Section 4-29-67. If the investor does not anticipate completing the project within five years, the investor may apply to the county before the end of the five-year period for an extension of time to complete the project. If the county agrees to grant the extension, the county must do so in writing and a copy must be delivered to the Tax Commission within thirty days of the date the extension was granted. The extension may not exceed two years in which to complete the project.
There is no extension allowed for the five-year period in which to meet the minimum level of investment. If the minimum level of investment is not met within five years, all property financed under the lease agreement reverts retroactively to the payments required by Section 4-29-60. The difference between the fee actually paid by the investor and the payment which is due under Section 4-29-60 is subject to interest as provided in Section 12-43-305.
Unless property qualifies as replacement property under a contract provision enacted pursuant to subsection (F)(2), any property placed in service after the five-year period, or seven years in the case of a project which has received an extension, is not part of the fee agreement under subsection (D)(2) and is subject to the payments required by Section 4-29-60 if the county has title to the property, or to property taxes as provided in Chapter 37 of Title 12 if the investor has title to the property.
(2) The annual fee provided by subsection (D)(2) is available for no more than twenty years. For projects which are completed and placed in service during more than one year, each year's investment may be subject to the fee in subsection (D)(2) for twenty years to a maximum total of twenty-seven years for the fee for a single project which has been granted an extension. Replacement property as defined in subsection (F)(2) is entitled to the fee payment for the period of time remaining on the fee for the property which it is replacing.
(D) The inducement agreement must provide for fee payments, to the extent applicable, as follows:
(1) (a) before property is placed in service which qualifies under subsection (B), an annual fee payment equal to the property taxes that would have been due on any previously taxed property had it remained taxable.
(b) on undeveloped property, an annual fee payment equal to the property taxes that would have been due on any previously taxed property had it remained taxable.
(c) fee payments under subsection (D)(1) will not be considered part of the maximum period for the fee provided in subsection (C)(2).
(2) After property qualifying under subsection (B) is placed in service, an annual fee payment determined in accordance with one of the following is due:
(a) an annual payment in an amount not less than the property taxes that would be due on the project if it were taxable, but using an assessment ratio of not less than six percent, and a fixed millage rate as provided in subsection (G), and a fair market value estimate determined by the South Carolina Tax Commission as follows:
(i) for the real property using the original cost, and
(ii) for personal property using the original cost less depreciation allowable for property tax purposes, except that the investor is not entitled to any extraordinary obsolescence deduction.
(b) an annual payment based on any alternative arrangement yielding a net present value of the sum of the fees for the life of the agreement not less than the net present value of the fee schedule as calculated under subsection (D)(2)(a). Net present value calculations performed under this subsection must use a discount rate identical to the interest rate in effect for new or existing United States Treasury bonds of similar maturity as published during the month in which the inducement agreement is executed. If no interest rate is available for the month in which the inducement agreement is executed, the last published rate for the appropriate maturity must be used. If there are no bonds of appropriate maturity available, bonds of different maturities may be averaged to obtain the appropriate maturity.
(c) an annual payment using a formula that results in a fee not less than the amount required pursuant to subsection (D)(2)(a), except that every fifth year the applicable millage rate is allowed to increase or decrease in step with the average actual millage rate applicable in the district where the project is located based on the preceding five-year period.
(3) At the conclusion of the payments determined pursuant to items (1) and (2) of this subsection, an annual payment equal to the taxes due on the project as if it were taxable. When the property is no longer subject to the fee under subsection (D)(2), the fee or property taxes must be assessed based on the fair market value as of the latest reassessment date.
(E) Calculations pursuant to subsection (D)(2) must be made on the basis that the property, if taxable, is allowed all applicable property tax exemptions except the exemption allowed under Section 3(g) of Article X of the Constitution of this State and the exemption allowed pursuant to Section 12-37-220B(32) and (34).
(F) With regard to the calculation of the fee provided in subsection (D)(2), the inducement agreement may provide for the disposal of property and the replacement of property subject to the fee as follows:
(1)(a) If an investor disposes of property subject to the fee, the fee must be reduced by the amount of the fee applicable to that property.
(b) Property is disposed of only when it is scrapped or sold in accordance with the lease agreement.
(c)(i) If the investor used any method to compute the fee other than that provided in subsection (D)(2)(a), the fee on the property which was disposed of must be recomputed in accordance with subsection (D)(2)(a) and to the extent that the amount which would have been paid under subsection (D)(2)(a) exceeds the fee actually paid by the investor, the investor must pay the difference in the manner provided in subsection (F)(1)(c)(ii). If the investor used the method provided in subsection (D)(2)(c), the millage rate provided by subsection (D)(2)(c) must be used to calculate the amount which would have been paid under subsection (D)(2)(a).
(ii) If the investor replaces the property which was disposed of under subsection (F)(2), then the difference calculated in subsection (F)(1)(c)(i) may be paid using the same present value structure used to calculate the fee for the replacement property. If the fee payment for the replacement property is calculated using subsection (D)(2)(a), the difference may be paid using a present value method which results in equal payments over the remaining life of the fee. If when replacing property the investor does not choose to pay the difference over the remaining life of the fee, the difference must be paid with the next fee payment. If the investor does not replace the property which has been disposed of, the investor shall pay the difference calculated in subsection (1)(c)(i) with the next fee payment.
(d) If at any time following the period provided in subsection (C), the investment based on income tax basis with no deduction for depreciation falls below the eighty-five million dollar minimum investment, the fee provided in subsection (D)(2) is no longer available and the investor is required to make the payments which are due under Section 4-29-60 for the remainder of the lease period.
(e) If there is no provision in the agreement dealing with the disposal of property in accordance with this subsection, the fee remains fixed and no adjustment to the fee is allowed for disposed property.
(2) Any property which is placed in service as a replacement for property which is subject to the fee payment may become part of the fee payment as provided in this item:
(a) Replacement property does not have to serve the same function as the property it is replacing. Replacement property qualifies for fee treatment provided in subsection (D)(2) only up to the original income tax basis of fee property which is being disposed of in the same property tax year. More than one piece of property can replace a single piece of property. To the extent that the income tax basis of the replacement property exceeds the original income tax basis of the property which it is replacing, the excess amount is subject to payments as provided in Section 4-29-60.
(b) The new replacement property which qualifies for the fee provided in subsection (D)(2) is recorded using its income tax basis and the fee is calculated using the millage rate and assessment ratio provided on the original fee property. If the investor uses the method of making the payment provided in subsection (D)(2)(b) with either a fixed millage rate, or a changing millage rate as provided in subsection (D)(2)(c) if the fee on the original investment uses that method, then the investor and the county shall negotiate the method of calculating the present value of the fee payments for each year remaining in the fee period. This method must be provided to the Tax Commission at the time information concerning the calculation of the original fee payment is provided to the Tax Commission. If a method of calculating the fee payment for replacement property is not negotiated, then the method of calculating the payment must be based on subsection (D)(2)(a).
(c) In order to qualify as replacement property title to the replacement property must be held by the county.
(d) If there is no provision in the fee agreement dealing with replacement property, any property placed in service after the five-year period, or seven years in the case of a project which has received an extension, is not part of the fee agreement under subsection (D)(2) and is subject to the payments required by Section 4-29-60 if the county has title to the property, or to property taxes as provided in Chapter 37 of Title 12 if the investor has title to the property.
(G) The county and the investor may enter into an agreement to establish the millage rate (millage rate agreement) for purposes of calculating payments under subsection (D)(2)(a) and the first five years under subsection (D)(2)(c). This millage agreement must be executed on the date of the inducement agreement or anytime thereafter up to and including the date of the initial lease agreement. The millage rate cannot be lower than the cumulative property tax millage rate legally levied by or on behalf of all taxing entities within which the subject property is to be located which is the latest such cumulative rate at the time the millage agreement is executed, regardless of the tax year to which that property tax millage applies. If no millage rate agreement is signed before the date of the initial lease agreement, the millage rate is deemed to be the existing cumulative property tax millage rate on the date the initial lease agreement is executed by both parties.
(H) The investor and the county may amend the terms of their inducement agreement as it concerns the fee payment, except with regard to the minimum millage rate as provided in subsection (G) and the discount rate, at any time before the initial lease agreement date. The contract provisions concerning the fee payment may not be amended after the initial lease agreement date.
(I) At the time of the inducement agreement (first agreement), the investor and the county may agree that if within five years following the five-year minimum investment period, the investor invests an additional eighty-five million dollars in a new project, the parties shall enter into a new inducement agreement (second agreement) providing for a fee in connection with the new investment. The first agreement may establish the assessment ratio to be used in the second agreement and may also provide that the millage rate is calculated using the lowest millage rate available for the second agreement using the provisions of subsections (D)(2)(c) and (G). All other terms must be negotiated by the parties in the second agreement.
(J)(1) For a project not located in an industrial development park as defined in Section 4-1-170, distribution of the fee in lieu of taxes on the project must be made in the same manner and proportion that the millage levied for school and other purposes would be distributed if the property were taxable. For this purpose, the relative proportions must be calculated based on the following procedure: holding constant the millage rate set in subsection (G) and using all tax abatements automatically granted for taxable property, a full schedule of the property taxes that would otherwise have been distributed to each millage-levying-entity in the county must be prepared for the life of the agreement, up to twenty years maximum. These separate schedules must then be reduced to present value using the discount rate provided under subsection (D)(2)(b). The resulting values for each millage-levying-entity as a percentage of the present value total for all such entities determines each entity's relative share of each year's fee payment for all subsequent years of the agreement.
(2) For a project located in an industrial development park as defined in Section 4-1-170, distribution of the fee in lieu of taxes on the project must be made in the manner provided for by the agreement establishing the industrial development park.
(K) As a directly foreseeable result of negotiating the fee, gross revenue of a school district in which a project is located in any year a fee negotiated pursuant to this section is paid, may not be less than gross revenues of the district in the year before the first year for which a fee in lieu of taxes is paid. In negotiating the fee, the parties shall assume that the formulas for the distribution of state aid at the time of the execution of the agreement must remain unchanged for the duration of the agreement.
(L) Projects on which a fee in lieu of taxes is paid pursuant to this section are considered taxable property at the level of the negotiated payments for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State and for purposes of computing the index of taxpaying ability pursuant to Section 59-20-20(3). However, for a project located in an industrial development park as defined in Section 4-1-170, projects are considered taxable property in the manner provided in Section 4-1-170 for purposes of bonded indebtedness pursuant to Sections 14 and 15 of Article X of the Constitution of this State and for purposes of computing the index of taxpaying ability pursuant to Section 59-20-20(3).
(M) The minimum amount of the initial investment provided in subsection (B)(2) of this section may not be reduced except by a special vote which, for purposes of this section, means an affirmative vote in each branch of the General Assembly by two-thirds of the members present and voting, but not less than three-fifths of the total membership in each branch.
(N) The investor shall file the returns, contracts, and other information which may be required by the Tax Commission in order to report investments in connection with the fee.
(O) Failure to make a timely fee payment and file required returns shall result in penalties being assessed in accordance with Sections 12-45-180 and 12-37-800.
(P) The Tax Commission may require returns and other information it considers appropriate to administer the provisions of this section, and may issue the rulings and regulations it determines necessary or appropriate to carry out the purpose of this section."
Powers revised
SECTION 38. Section 4-29-80 of the 1976 Code is amended to read:
"Section 4-29-80. The governing board has the power to provide that the project and improvements must be acquired by the county or incorporated municipality, the industry, or both, on real estate owned by the county, incorporated municipality, or other agency or political subdivision of the State or the industry, that bond proceeds must be disbursed by the trustee bank or banks or depository during construction upon the estimate, order, or certificate of the industry, and if the financing agreement is in the form of a lease that the project need not be conveyed to the county or incorporated municipality for lease to the industry until its completion. The governing board may authorize the industry to acquire real estate and commence construction in anticipation of the issuance of bonds and to provide that the industry must be reimbursed for the expenditures from the proceeds of the bonds if and when issued. In making the agreements or provisions the governing board does not have the power to obligate the county or incorporated municipality except with respect to the project and the application of the revenues therefrom and does not have the power to incur a pecuniary liability or a charge upon the general credit of the county or incorporated municipality or against its taxing powers."
Method for calculating certain fees in lieu of taxes
SECTION 39. (A) In connection with a written agreement between the county and the investor executed in good faith prior to March 15, 1992, concerning the method for calculating the fee allowed pursuant to Section 4-29-67 of the 1976 Code, the method provided in the agreement by the parties will be binding except as provided in subsections (D) and (E) of this section.
(B) If the investor and county are operating under an existing agreement which does not discuss replacement property or the disposal of property subject to the fee, the parties can agree to follow any previously written opinion of the Attorney General or Tax Commission concerning these issues.
(C) The investor and the county who are operating under an existing fee agreement may renegotiate the payment to include provisions concerning property which is disposed of and replacement property which is consistent with Section 4-29-67(F) of the 1976 Code.
(D) The investor and the county who are operating under an existing fee agreement may agree to an extension as provided in Section 4-29-67(C)(2) of the 1976 Code. In no event may an existing or modified agreement exceed in total the time period provided in Section 4-29-67(C)(1) of the 1976 Code.
(E) An existing agreement may not provide that the terms of the agreement can be amended except as provided in Section 4-29-67(H) of the 1976 Code.
Issuance of assessments for hospital taxes
SECTION 40. Article 11, Chapter 23, Title 12 of the 1976 Code is amended by adding:
"Section 12-23-815. The Tax Commission shall issue assessments for the tax provided by this article based on information provided by the Department of Health and Environmental Control and the Health and Human Services Finance Commission."
Payment of hospital taxes
SECTION 41. Section 12-23-830 of the 1976 Code, as amended by Act 105 of 1991, is further amended to read:
"Section 12-23-830. On the first day of each quarter, each general hospital shall remit one-fourth of its annual tax to the Tax Commission. The tax must be paid for each quarter a hospital is in operation. If a hospital ceases operations, the taxes not paid as a result of the cessation of operations must be apportioned among other hospitals in operation."
Time effective
SECTION 42. This act takes effect upon approval by the Governor.
Approved the 4th day of May, 1992.