South Carolina General Assembly
110th Session, 1993-1994

Bill 699


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Introducing Body:               Senate
Bill Number:                    699
Primary Sponsor:                Land
Type of Legislation:            GB
Subject:                        Jobs tax credit
Residing Body:                  House
Date Tabled:                    19940602
Computer Document Number:       JIC/5809HC.93
Introduced Date:                19930415
Date of Last Amendment:         19940531
Last History Body:              House
Last History Date:              19940602
Last History Type:              Tabled
Scope of Legislation:           Statewide
All Sponsors:                   Land
Type of Legislation:            General Bill



History


Bill  Body    Date          Action Description              CMN  Leg Involved
____  ______  ____________  ______________________________  ___  ____________

699   House   19940602      Tabled
699   Senate  19940531      House amendments amended,
                            returned to House
699   House   19940527      Read third time, returned to
                            Senate with amendment
699   House   19940526      Amended, read second time,
                            unanimous consent for third
                            reading on Friday, May 27,
                            1994
699   House   19940518      Recalled from Committee              30
699   House   19940505      Recommitted to Committee             30
699   House   19940421      Debate adjourned until
                            Thursday, May 5, 1994           
699   House   19940406      Debate adjourned until
                            Thursday, April 21, 1994        
699   House   19940309      Committee Report: Favorable     30
699   House   19940126      Introduced, read first time,    30
                            referred to Committee
699   Senate  19940125      Read third time, sent to House
699   Senate  19940120      Amended, read second time
699   Senate  19940119      Committee Report: Favorable     06
                            with amendment
699   Senate  19930415      Introduced, read first time,    06
                            referred to Committee

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Indicates Matter Stricken
Indicates New Matter

HOUSE AMENDMENTS AMENDED

May 31, 1994

S. 699

Introduced by SENATOR Land

S. Printed 5/31/94--S.

Read the first time April 15, 1993.

A BILL

TO AMEND SECTION 12-7-1220, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE TARGETED JOBS TAX CREDIT, SO AS TO PROVIDE TERMS AND CONDITIONS UNDER WHICH THE CREDITS MAY BE USED BY A SUCCESSOR CORPORATION FOLLOWING A MERGER, CONSOLIDATION, OR REORGANIZATION WHERE TAX ATTRIBUTES SURVIVE; AND TO AMEND THE 1976 CODE BY ADDING SECTION 12-7-1645 SO AS TO AUTHORIZE THE FILING OF A CONSOLIDATED CORPORATE INCOME TAX RETURN AND TO PROVIDE THE TERMS AND CONDITIONS UNDER WHICH SUCH RETURNS MAY BE FILED.

Amend Title To Conform

Whereas, the General Assembly has enacted various income tax credits, including the jobs tax credit, as inducements to businesses to locate, expand, or carry on certain activities in this State; and

Whereas, many businesses operate through more than one corporation, including parent and subsidiary and commonly owned sister corporations; and

Whereas, the intent of the General Assembly was that, if such a group of corporations file a consolidated income tax return, a credit generated by one member of the group should be allowed to offset the tax liability of other members. Now, therefore,

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

SECTION 1. Section 12-7-1220(F) of the 1976 Code, as last amended by Act 170 of 1987, is further amended to read:

"(F) The sale, merger, acquisition, or bankruptcy of a corporation may not create new eligibility in a succeeding corporation, but unused job tax credits may be transferred and continued by a transferee of the corporation. The appropriate commission shall determine whether or not qualifying net increases or decreases have occurred and may require reports, promulgate regulations, and hold hearings needed for substantiation and qualification. The merger, consolidation, or reorganization of a corporation where tax attributes survive does not create new eligibility in a succeeding corporation, but unused job tax credits may be transferred and continued by the succeeding corporation. In addition, a corporation may assign its rights to its jobs tax credit to another corporation if it transfers all, or substantially all, of the assets of the corporation or all, or substantially all, of the assets of a trade or business or operating division of a corporation related to the generation of the jobs tax credits to that corporation if the required number of new jobs is maintained for that amount of credit. No corporation is allowed a jobs tax credit if the net employment increase for that corporation falls below ten for a less developed county, eighteen for a moderately developed county, or fifty for a developed county. The Department of Revenue and Taxation or Department of Insurance, as appropriate, shall determine whether or not qualifying net increases or decreases have occurred and may require reports, promulgate regulations, and hold hearings needed for substantiation and qualification."

SECTION 2. Article 13, Chapter 7, Title 12 of the 1976 Code is amended by adding:

"Section 12-7-1645. (A) A consolidated return may be filed for the following corporations:

(1) a parent and substantially controlled subsidiary or subsidiaries;

(2) two or more corporations under substantially the entire control of the same interest.

The terms `substantially controlled' and `substantially the entire control' mean the ownership of at least eighty percent of the total combined voting power of all classes of stock of all corporations that are a party to a consolidated return.

(B) All corporations included in a consolidated return must be subject to tax under Section 12-7-230.

(C) A corporation doing business entirely within this State may consolidate with a corporation doing a multistate business. Two or more corporations doing a multistate business may file a consolidated return.

(D) A consolidated return means a single return for two or more corporations in which income or loss is separately determined as follows:

(1) South Carolina taxable income or loss is computed separately for each corporation;

(2) allocable income is allocated separately for each corporation;

(3) apportionable income or loss is computed utilizing separate apportionment factors for each corporation;

(4) income or loss computed in accordance with items (1) through (3) of this subsection is combined and reported on a single return for the controlled group.

(E) All corporations included in a consolidated return or a combined return must use the same accounting year.

(F) If a corporation which files or is required to file a consolidated return is entitled to one or more income tax credits, including the carryover of unused credits from prior years, the income tax credits may be determined on a consolidated basis. Limitations on credits which refer to the income or the income tax liability of a corporation are deemed to refer to the income or income tax liability of the consolidated group, and credits shall reduce the consolidated group's tax liability regardless of whether or not the corporation entitled to the credit contributed to the tax liability of the consolidated group.

(G) The election to file a consolidated return or separate returns must be made on an original and timely return and may not be changed after the return is filed.

(H) Once an election is made to file a consolidated return, this election must be adhered to until permission is granted by the Department of Revenue and Taxation to file separate returns."

SECTION 3. Section 12-7-430 of the 1976 Code is amended by adding:

"(i) Notwithstanding Section 12 of Act 101 of 1985, Internal Revenue Code Section 7518 applies retroactively to taxable years beginning after 1986 and applies to any taxpayer."

SECTION 4. Upon approval of the Governor, SECTIONS 1 and 2 of this act are effective for tax years beginning after 1993. SECTION 3 of this act takes effect upon approval of the Governor.

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