Current Status Bill Number:4850 Ratification Number:520 Act Number:387 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19980319 Primary Sponsor:Boan All Sponsors:Boan Drafted Document Number:DKA\4773MM.98 Date Bill Passed both Bodies:19980604 Date of Last Amendment:19980602 Governor's Action:S Date of Governor's Action:19980615 Subject:Income tax withholding, nonresident beneficiary; Taxation, Trusts and Estates, Gambling, Bingo, licensees, hard cards
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
------ 19980624 Act No. A387
------ 19980615 Signed by Governor
------ 19980610 Ratified R520
House 19980604 Concurred in Senate amendment,
enrolled for ratification
Senate 19980602 Read third time, returned to House
with amendment
Senate 19980602 Amended
Senate 19980526 Read second time, notice of
general amendments
Senate 19980520 Recalled from Committee 06 SF
Senate 19980421 Introduced, read first time, 06 SF
referred to Committee
House 19980415 Read third time, sent to Senate
House 19980414 Read second time
House 19980408 Committee report: Favorable 30 HWM
House 19980319 Introduced, read first time, 30 HWM
referred to Committee
View additional legislative information at the LPITS web site.
(A387, R520, H4850)
AN ACT TO AMEND SECTION 12-8-570, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO WITHHOLDING OF A PORTION OF A TRUST DISTRIBUTION TO A NONRESIDENT BENEFICIARY FOR TAX PURPOSES, SO AS TO EXEMPT ALSO DISTRIBUTIONS TO A NONRESIDENT BENEFICIARY WHO IS EXEMPT FROM TAXATION UNDER SECTION 501 OF THE INTERNAL REVENUE CODE AND A NONRESIDENT BENEFICIARY WHO SUBMITS TO THIS STATE'S JURISDICTION FOR DETERMINING TAX LIABILITY; TO AMEND SECTION 12-8-580, RELATING TO WITHHOLDING OF A PORTION OF THE PURCHASE PRICE BY A BUYER WHEN THE SELLER IS A NONRESIDENT, SO AS TO FURTHER PROVIDE FOR THE PROPERTY WHICH IS SUBJECT TO THE WITHHOLDING REQUIREMENTS; TO AMEND SECTION 12-8-1030, RELATING TO AN INCORRECT WITHHOLDING EXEMPTION CERTIFICATE, SO AS TO ESTABLISH PROCEDURES FOR THE EMPLOYER, EMPLOYEE, AND DEPARTMENT OF REVENUE FOR DETERMINATION OF THE CORRECT NUMBER OF EXEMPTIONS AND APPEAL OF THAT DETERMINATION AND TO GIVE EMPLOYERS UNTIL MARCH 31, 1999, TO COMPLY; TO AMEND SECTION 12-54-40, AS AMENDED, RELATING TO PENALTIES IN CONNECTION WITH A WRONGFUL CLAIM OF WITHHOLDING EXEMPTIONS, SO AS TO CHANGE THE REFERENCE TO CHAPTER 8 INSTEAD OF CHAPTER 9, TO INCREASE THE MAXIMUM FINE TO ONE THOUSAND DOLLARS, AND TO MAKE THE OFFENSE TRIABLE IN MAGISTRATE'S COURT; TO AMEND SECTION 12-54-46, RELATING TO THE FILING OF A FALSE WITHHOLDING EXEMPTION CERTIFICATE, SO AS TO DELETE THE MAXIMUM LIMIT ON THE FINE; TO REPEAL SECTION 12-54-45 RELATING TO THE PENALTY FOR SUPPLYING AN EMPLOYER WITH FALSE OR FRAUDULENT INFORMATION AS TO THE NUMBER OF EXEMPTIONS; TO AMEND SECTION 12-21-4020, AS AMENDED, RELATING TO CLASSES OF BINGO LICENSES, SO AS TO ALLOW CERTAIN CLASS D LICENSEES TO USE HARD BINGO CARDS; AND TO AMEND SECTION 12-21-4090, RELATING TO BINGO CHECKING AND SAVINGS ACCOUNTS, SO AS TO EXCEPT THE HOLDER OF A CLASS D FAIR LICENSE.
Be it enacted by the General Assembly of the State of South Carolina:
Withholding for distribution to nonresident beneficiary
SECTION 1. Section 12-8-570 of the 1976 Code, as added by Act 76 of 1995, is amended to read:
Section 12-8-570. (A) A trust or estate making a distribution of South Carolina taxable income to a nonresident beneficiary must withhold seven percent of the beneficiary's distribution which is attributable to South Carolina taxable income. The amounts withheld must be remitted to the department at the time estimated tax payments are due.
(B) This section does not apply to a:
(1) trust that is exempt from taxation under Internal Revenue Code Section 501;
(2) nonresident beneficiary who is exempt from taxation under Internal Revenue Code Section 501; or
(3) nonresident beneficiary who agrees to be subject to the jurisdiction of the department and the courts of this State to determine South Carolina tax liability, including estimated taxes and related interest and penalties. The agreement is not an admission of tax liability.
Withholding by buyer from nonresident seller
SECTION 2. Section 12-8-580(A)(1) of the 1976 Code, as added by Act 76 of 1995, is amended to read:
"(1) A person who purchases real property, or real property and associated tangible personal property, from a nonresident seller shall withhold:
(a) seven percent of the gain recognized on the sale by a nonresident individual, partnership, trust, or estate and five percent for a nonresident corporation or other nonresident entity if the seller provides the buyer with an affidavit, described in subsection (E), stating the amount of gain;
(b) seven percent of the amount realized on the sale for a nonresident individual, partnership, trust, or estate and five percent by a nonresident corporation or any other nonresident entity if the seller does not provide the buyer with an affidavit described in subsection (E); or
(c) the entire net proceeds payable to the nonresident seller, if the amount required to be withheld in subitem (1) or (2) exceeds the net proceeds payable to the seller."
Incorrect withholding exemption certificate
SECTION 3. A. Section 12-8-1030 of the 1976 Code, as added by Act 76 of 1995, is amended to read:
"Section 12-8-1030. (A)(1) If an employer receives a withholding exemption certificate from an employee claiming ten or more withholding exemptions or he believes an employee's withholding exemption certificate is incorrect, the employer shall furnish a copy of the certificate to the department within thirty days after it is received.
(2) Until otherwise informed by the department the employer shall withhold on the basis of the claimed exemptions.
(B)(1) If an employer furnishes a copy of an employee's withholding exemption certificate to the department, or if the department for any other reason believes an employee's withholding exemption certificate may be incorrect, the department may request that the employee submit written verification of the statements on the certificate within thirty days.
(2) If the department determines, upon review, the information is incorrect, it shall inform the employee that the exemption certificate is invalid and of the number of exemptions allowed. If the employee does not provide adequate verification to support the exemptions claimed on the withholding certificate, the department shall allow only one exemption.
(C)(1) The determination by the department may be appealed as provided under the Revenue Procedures Act within thirty days after the department's decision is rendered. Final review of the appeal includes the final decision of the Administrative Law Judge Division or court if the matter was heard by the Administrative Law Judge Division or appealed to a court.
(2) If the employee does not appeal the department's determination, the department shall notify the employer of the number of exemptions to allow in computing the employee's withholding. The correct number of exemptions, as determined by the department, Administrative Law Judge Division, or court, must begin on the first payroll period ending on or after the date the employer receives notification."
B. The provisions of Section 12-8-1030 take effect October 1, 1998. By March 31, 1999, an employer must review all withholding exemption certificates submitted before the effective date of this section of all employees who remain employed by the employer. The employer shall furnish the department a copy of all those withholding exemption certificates claiming ten or more exemptions.
Penalties
SECTION 4. Section 12-54-40(b)(6)(e) of the 1976 Code is amended to read:
"(e) A person required to supply information to his employer under Chapter (8) of Title 12 who wilfully supplies false or fraudulent information or who wilfully fails to supply information which would require an increase in the tax to be withheld under Chapter 8, Title 12 is guilty, instead of any other penalty provided, of a misdemeanor and, upon conviction, must be fined not more than one thousand dollars, or imprisoned not more than one year, or both. Offenses in this section are triable in magistrate's court."
Intentionally false or fraudulent exemption certificate
SECTION 5. Section 12-54-46 of the 1976 Code, as added by Act 76 of 1995, is amended to read:
"Section 12-54-46. An individual required to supply information to his employer under Chapter 8 of Title 12 who supplies a withholding exemption certificate which exceeds the number of exemptions to which he is entitled is liable for a penalty of not less than fifty dollars for each exemption claimed that exceeds the number to which he is entitled. The penalty is assessed and collected in the same manner as income tax penalties."
Classes of bingo license
SECTION 6. Section 12-21-4020(4) of the 1976 Code, as last amended by an act of 1998 bearing ratification number 308, is amended to read:
"(4) CLASS D: A person, organization, or corporation desiring to conduct a bingo game at a fair as defined in Section 12-21-3920 and who offers prizes for each game of no more than fifty dollars in merchandise shall obtain only a temporary Class D bingo license at a cost of one hundred dollars for not more than ten days or two hundred dollars for more than ten days. The department, in its discretion, may allow certain Class D licensees to use hard bingo cards in lieu of the paper cards required by this article."
Bingo checking and savings accounts
SECTION 7. Section 12-21-4090(A) of the 1976 Code, as added by Act 449 of 1996, is amended to read:
"(A) The provisions of this section apply to the licensed nonprofit organization which is responsible for the special checking and savings accounts established by this section. The provisions of this section do not apply to the holder of a Class D fair bingo license."
Repeal
SECTION 8. Section 12-54-45 of the 1976 Code is repealed.
Time effective
SECTION 9. This act takes effect upon approval by the Governor, except Section 3, which takes effect October 1, 1998.
Approved the 15th day of June, 1998.