Bill 3270

                    Current Status

Introducing Body:               House
Bill Number:                    3270
Ratification Number:            175
Act Number:                     109
Primary Sponsor:                Kirsh
Type of Legislation:            GB
Subject:                        Income tax laws
Companion Bill Number:          328
Date Bill Passed both Bodies:   May 15, 1991
Computer Document Number:       JIC/5218.HC
Governor's Action:              S
Date of Governor's Action:      May 30, 1991
Introduced Date:                Jan 22, 1991
Date of Last Amendment:         May 07, 1991
Last History Body:              ------
Last History Date:              May 30, 1991
Last History Type:              Act No. 109
Scope of Legislation:           Statewide
All Sponsors:                   Kirsh
                                McTeer
                                D. Elliott
Type of Legislation:            General Bill

 Bill  Body    Date          Action Description              CMN
 ----  ------  ------------  ------------------------------  ---
 3270  ------  May 30, 1991  Act No. 109
 3270  ------  May 30, 1991  Signed by Governor
 3270  ------  May 27, 1991  Ratified R 175
 3270  House   May 15, 1991  Concurred in Senate
                             amendment, enrolled for
                             ratification
 3270  Senate  May 09, 1991  Read third time, returned
                             with amendment
 3270  Senate  May 07, 1991  Amended, read second time
 3270  Senate  Apr 25, 1991  Committee Report: Favorable     06
                             with amendment
 3270  Senate  Mar 21, 1991  Introduced, read first time,    06
                             referred to Committee
 3270  House   Mar 21, 1991  Read third time, sent to
                             Senate
 3270  House   Mar 20, 1991  Amended, read second time
 3270  House   Mar 19, 1991  Committee Report: Favorable     30
                             with amendment
 3270  House   Jan 22, 1991  Introduced, read first time,    30
                             referred to Committee

(R175, H3270)

AN ACT TO AMEND SECTION 4-10-40, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE PROPERTY TAX CREDIT IN COUNTIES IMPOSING THE LOCAL OPTION SALES TAX, SO AS TO PROVIDE THAT THE CREDIT MUST BE CALCULATED BASED ON SALES TAX REVENUES RECEIVED DURING THE POLITICAL SUBDIVISION'S FISCAL YEAR; TO AMEND SECTION 12-7-20, AS AMENDED, RELATING TO DEFINITIONS FOR PURPOSES OF THE STATE INCOME TAX, SO AS TO DELETE LANGUAGE MAKING THE FISCAL YEAR A CALENDAR YEAR UNLESS ANOTHER YEAR IS ESTABLISHED; TO AMEND SECTION 12-9-390, AS AMENDED, RELATING TO INCOME TAX WITHHOLDING, SO AS TO DELETE THE PENALTY PROVISION; TO AMEND THE 1976 CODE BY ADDING SECTION 12-19-165 SO AS TO PROVIDE FOR THE PRORATION OF THE CORPORATE LICENSE FEE FOR RETURNS FOR FEWER THAN TWELVE MONTHS; TO AMEND SECTION 12-36-950, RELATING TO THE PRESUMPTION THAT ALL GROSS PROCEEDS ARE SUBJECT TO THE SALES TAX, SO AS TO SHIFT THE TAX LIABILITY TO THE PURCHASER IF THE SELLER RECEIVES A RESALE CERTIFICATE SIGNED BY THE PURCHASER WHICH INCLUDES THE PURCHASER'S NAME, ADDRESS, RETAIL LICENSE NUMBER, AND OTHER INFORMATION REQUIRED BY THE COMMISSION; TO AMEND SECTION 12-54-40, RELATING TO TAX CRIMES AND PENALTIES, SO AS TO PLACE THE PENALTY FOR FAILURE TO WITHHOLD PROPERLY IN THE PROVISION OF THE 1976 CODE DEALING WITH PENALTIES; TO AMEND SECTION 12-54-80, RELATING TO THE TIME IN WHICH TAXES ADMINISTERED BY THE SOUTH CAROLINA TAX COMMISSION MUST BE DETERMINED AND ASSESSED, SO AS TO ALLOW THE COMMISSION TO ASSESS INCOME TAXES AFTER THE THIRTY-SIX MONTHS' LIMITATION IF IT ASSESSES THE TAX WITHIN ONE HUNDRED EIGHTY DAYS OF RECEIVING NOTICE FROM THE INTERNAL REVENUE SERVICE OF A FINAL DETERMINATION OF AN INCOME ADJUSTMENT; TO AMEND SECTION 33-14-220, AS AMENDED, RELATING TO THE REQUIREMENTS FOR REINSTATEMENT OF CORPORATE CHARTERS, SO AS TO PROVIDE THAT THE TAX, PENALTIES, AND INTEREST, WHETHER ASSESSED OR NOT, MUST BE PAID BEFORE REINSTATEMENT; AND TO AMEND THE 1976 CODE BY ADDING SECTION 33-15-330 SO AS TO PROVIDE A PROCEDURE FOR THE REINSTATEMENT OF CERTIFICATES OF AUTHORITY FOR FOREIGN CORPORATIONS.

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

Income year

SECTION 1. Section 12-7-20(5) of the 1976 Code is amended to read:

"(5) The words `income year' mean the calendar year or the fiscal year upon the basis of which the net income is computed under this chapter."

Withholding

SECTION 2. Section 12-9-390(A) of the 1976 Code, as last amended by Section 3C, Part II, Act 612 of 1990, is further amended to read:

"(A) Every withholding agent required to make a return or deposit and pay taxes to the Internal Revenue Service under the Internal Revenue Code of 1986, as amended through December 31, 1989, and applicable regulations effective as of December 31, 1989, at the same time, shall make a return or deposit and pay to the commission any taxes deducted and withheld under the provisions of Sections 12-9-310 to 12-9-370.

All withheld funds must be deposited at financial institutions selected by the State Treasurer if the deposit is also required under the Internal Revenue Code of 1986, as amended through December 31, 1989, and applicable regulations as of December 31, 1989.

Nonresident withholding agents may elect to remit taxes withheld under Sections 12-9-310 through 12-9-370 by making a return to the commission as follows:

(1) If the accumulated amount withheld in a calendar quarter is less than five hundred dollars, the return must be filed and the tax remitted to the commission as provided to subsection (B) of this section.

(2) If the accumulated amount withheld is five hundred dollars or more by the end of a month, the return must be filed and the tax remitted to the commission on or before the fifteenth day of the following month.

Nonresident means an individual domiciled outside South Carolina and any other entity whose principal place of business is outside South Carolina."

Prorated fee

SECTION 3. Chapter 19, Title 12 of the 1976 Code is amended by adding:

"Section 12-19-165. When a taxpayer's taxable year is changed and a return of fewer than twelve months results, the license fee due and payable under this chapter must be a prorated annual license fee. The prorated license fee is computed by dividing the annual license fee by twelve and multiplying the results by the number of months in the short period. The proration provided by this section applies only to short periods due to a change in accounting period and does not apply to short periods due to initial or final returns. The prorated fee cannot be less than the minimum fee imposed in Section 12-19-70."

Penalty

SECTION 4. Section 12-54-40(b) of the 1976 Code, as last amended by Act 660 of 1988, is further amended by adding:

"(7) A failure to deposit or pay any taxes deducted and withheld pursuant to Sections 12-9-310 to 12-9-370 subjects the withholding agent to a penalty of not less than ten dollars nor more than one thousand dollars. The penalty imposed by this item applies to failure to comply with the provisions of Section 12-54-250."

Limit on assessments

SECTION 5. The first paragraph of Section 12-54-80 of the 1976 Code is amended to read:

"Except as otherwise provided in this section, the amount of taxes due on a return which has been filed as required by provisions of law administered by the commission must be determined and assessed within thirty-six months from the date the return was filed or due to be filed, whichever occurs later. In the case of income taxes, the commission may determine and assess income taxes after the thirty-six months limitation if it makes the determination and assessment within one hundred eighty days of receiving notice from the Internal Revenue Service of a final determination of an income adjustment made by the Internal Revenue Service."

Reinstatement

SECTION 6. Section 33-14-220(a)(4) of the 1976 Code, as last amended by an act of 1991 bearing ratification number 10, is further amended to read:

"(4) contain a certificate from the South Carolina Tax Commission reciting that all taxes, penalties, and interest owed by the corporation, whether assessed or not, have been paid."

Reinstatement

SECTION 7. Article 3, Chapter 15, Title 33 of the 1976 Code is amended by adding:

"Section 33-15-330. (A) A foreign corporation whose certificate of authority has been revoked administratively under Section 33-15-310 may apply to the Secretary of State for reinstatement at any time after the effective date of revocation. The application must:

(1) recite the name of the foreign corporation and the effective date of its administrative revocation;

(2) state that the grounds for revocation either did not exist or have been eliminated;

(3) state that the foreign corporation's name satisfies the requirements of Section 33-4-101;

(4) contain a certificate from the South Carolina Tax Commission stating that all taxes, penalties, and interest owed by the corporation, whether assessed or not, have been paid.

(B) If the Secretary of State determines that the application contains the information required by subsection (A) and that the information is correct, he shall cancel the certificate of revocation and prepare a certificate of reinstatement that recites his determination and the effective date of reinstatement, file the original of the certificate, and send a copy to the foreign corporation.

(C) When the reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative revocation and the foreign corporation may resume carrying on its business as if the administrative revocation had never occurred."

Fiscal year

SECTION 8. Section 4-10-40(B) of the 1976 Code, as added by Act 317 of 1990, is amended to read:

"(B) All of the revenue received by a county and municipality from the Property Tax Credit Fund must be used to provide a credit against the property tax liability of taxpayers in the county and municipality in an amount determined by multiplying the appraised value of the taxpayer's taxable property by a fraction in which the numerator is the total estimated revenue received by the county or municipality from the Property Tax Credit Fund during the applicable fiscal year of the political subdivision and the denominator is the total of the appraised value of taxable property in the county or municipality as of January first of the applicable taxable year."

Sales tax liability

SECTION 9. Section 12-36-950 of the 1976 Code, as added by Act 612 of 1990, is amended to read:

"Section 12-36-950. It is presumed that all gross proceeds are subject to the tax, until the contrary is established. The burden of proof that the sale of tangible personal property is not a sale at retail is on the seller.

However, if the seller receives a resale certificate signed by the purchaser stating that the property is purchased for resale, the liability for the sales tax shifts from the seller to the purchaser.

The resale certificate must include the purchaser's name, address, retail sales tax license number, and any other provisions or information considered necessary by the commission.

The commission may require the seller to provide information it considers necessary for the administration of this section."

Time effective

SECTION 10. This act takes effect upon approval by the Governor.

In the Senate House May 27, 1991.

Nick A. Theodore,

President of the Senate

Robert J. Sheheen,

Speaker of the House the

Representatives

Approved the 30th day of May, 1991.

Carroll A. Campbell, Jr.,

Governor

Printer's Date -- May 27, 1991 -- S.