Current Status Bill Number:904 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19980114 Primary Sponsor:Washington All Sponsors:Washington Drafted Document Number:bbm\9550mm.98 Residing Body:Senate Current Committee:Finance Committee 06 SF Subject:Income Tax Credit for Property Tax Relief Act; Taxation, Exemptions and deductions
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
Senate 19980114 Introduced, read first time, 06 SF
referred to Committee
View additional legislative information at the LPITS web site.
TO AMEND CHAPTER 37, TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PROPERTY TAXES, BY ADDING ARTICLE 25 SO AS TO ENACT THE INCOME TAX CREDIT FOR PROPERTY TAX RELIEF ACT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 37, Title 12 of the 1976 Code is amended by adding:
Section 12-37-3310. As used in this article:
(1) 'Income' means the sum of federal adjusted gross income as defined in the Internal Revenue Code of the United States and all nontaxable income including, but not limited to:
(a) the amount of capital gains excluded from adjusted gross income;
(b) alimony;
(c) support money;
(d) nontaxable strike benefits;
(e) cash public assistance and public relief, not including relief granted under this article;
(f) the gross amount of any pension or annuity, including Railroad Retirement Act benefits and veterans' disability pensions;
(g) all payments received under the Federal Social Security and state unemployment insurance law;
(h) nontaxable interest received from the federal government or any of its instrumentalities;
(i) workers' compensation; and
(j) the gross amount of 'loss of time' insurance.
'Income' does not include gifts from nongovernmental sources, or surplus foods or other relief in kind supplied by a public or private agency.
(2) 'Household" means the association of persons who live in the same dwelling, sharing its furnishings, facilities, accommodations, and expenses. The term does not include bona fide lessees, tenants, or roomers and boarders on contract.
(3) 'Household income' means all the income received in a calendar year by all persons of a household while members of the house including, but not limited to:
(a) compensation for services including fees, commissions, and similar items;
(b) income derived from dealings in property;
(c) gains derived from dealings in property;
(d) interest;
(e) rents;
(f) royalties;
(g) dividends;
(h) alimony;
(i) income from life insurance and endowment contracts;
(j) annuities;
(k) pensions;
(l) income from discharge of indebtedness;
(m) distributive share of partnership gross income;
(n) income from an interest in an estate or trust; and
(o) federal old age, survivor, or disability benefits.
(4) 'Homestead' means the dwelling owned or rented, and so much of the land surrounding it not exceeding one acre, as is reasonably necessary for use of the dwelling as a home, and may consist of a part of a multi-dwelling or multi-purpose building and a part of the land upon which it is built. It does not include personal property such as furniture, furnishings, or appliances, but a mobile home or a houseboat may be a homestead.
(5) 'Owner' includes a vendee in possession under a land contract and one or more joint tenants in common.
(6) 'Claimant' means a person who has filed a claim pursuant to this article and was domiciled in this State for the entire calendar year for which he files claim for relief under this article. When two or more individuals of a household meet the qualifications for a claimant, they may determine among them who the claimant is. If they are unable to agree, they shall refer the matter to the South Carolina Department of Revenue, and its decision is final.
(7) 'Property taxes accrued' means property taxes, exclusive of special assessments, delinquent interest, and charges for service, levied on a claimant's homestead in this State. For purposes of this subsection, property taxes are 'levied' when the tax roll is delivered to the local treasurer for collection. If a claimant owns his homestead on the levy date, 'property taxes accrued' means taxes levied on the levy date, even if the claimant does not own his homestead for the entire year.
When a household owns and occupies two or more different homesteads in this State in the same calendar year, 'property taxes accrued' relates only to the property occupied by the household as a homestead on the levy date. If a homestead is an integral part of a large unit such as a farm or multi-purpose or multi-dwelling building, 'property taxes accrued' are that percentage of the total property taxes accrued as the value of the homestead is of the total value. For purposes of this subsection, 'unit' is the parcel of property covered by a single tax statement of which the homestead is a part.
(8) 'Permanently and totally disabled' means the inability to perform substantial gainful employment by reason of a medically determinable impairment, either physical or mental, which has lasted or is expected to last a continuous period of twelve months or more or to result in death.
(9) 'Gross rent' means rental actually paid, at arms length, in cash or its equivalent solely for the right of occupancy of a homestead, exclusive of charges for utilities, services, furniture, furnishings, or personal appliances furnished by the landlord as a part of the rental agreement. When a claimant occupies two or more homesteads in the year and does not own his homestead as of the levy date, 'gross rent' means the total rent paid for the homestead most recently rented, multiplied by a number whose numerator is twelve and whose denominator is the number of months the homestead has been rented by the claimant.
If the landlord and tenant have not dealt with each other at arms length, and the department is satisfied that the gross rent charged was excessive, it may adjust the gross rent to a reasonable amount for the purpose of this article.
(10) 'Rent constituting property taxes accrued' means twenty percent of the gross rent.
Section 12-37-3320(A) The right to file a claim under this act is personal to the claimant and does not survive his death, but the right may be exercised on behalf of a claimant by his legal guardian or attorney-in-fact. If a claimant dies after having filed a timely claim, the amount of the claim must be disbursed to another member of the house as determined by the department. If the claimant was the only member of his household, the claim may be paid to his personal representative or administrator.
(B) If a person who was entitled to or eligible for the credit dies, and the surviving spouse is at least fifty years of age and acquires a fee simple title or life estate within nine months after the death of the spouse, the surviving spouse, if qualified, may receive the credit allowed in this section so long as the spouse remains unmarried.
(C) When a trustee holds legal title to a homestead for a resident who is 65 years of age or older or is totally and permanently disabled or blind, and the resident possesses the use of the dwelling for life, the resident is eligible for the credit allowed in this section, if otherwise qualified.
Section 12-37-3330. Subject to limitations provided in this article, a claimant may claim in a year, as a credit against South Carolina individual income taxes otherwise due on his income, a percentage of income taxes accrued in the preceding calendar year. If the allowable amount exceeds the income taxes otherwise due on a claimant's income, the amount of the claim not used as an offset against income taxes, after certification by the department, must be paid to the claimant by balances retained by the State Treasurer for general purposes. Interest is not allowed on a payment made to a claimant pursuant to this article.
Section 12-37-3340. A claim with respect to property taxes accrued may not be paid or allowed, unless the claim is actually filed with and in the possession of the department on or before April 15. Subject to the same conditions and limitations, claims may be filed on or before April 15 with respect to property taxes accrued for the next calendar year. In case of sickness, absence, or other disability, or for other good cause shown, the department may extend, for not more than six months, the time for filing a claim.
Section 12-37-3350. The amount of a claim otherwise payable under this article may be applied by the department against a liability outstanding against the claimant, or against the claimant's spouse who was a member of the claimant's household in the year to which the claim relates.
Section 12-37-3360. Only one claimant a household a year is entitled to the credit allowed by this article.
Section 12-37-3370. The amount of a claim made pursuant to this article is determined as follows:
(1) For a taxable year, a claimant is allowed a credit equal to the applicable percentage of property taxes accrued, upon the individual's homestead for the taxable year as set forth in this schedule:
If household incomeThen the taxpayer is entitled
(rounded to the to credit for property tax paid
nearest income) in excess of this percent of that
is: income.
$0-999 2.0%
4,000-7,0002.25%
8,000-11,9992.50%
12,000-15,999 2.75%
16,000 or more 3.0%
(2) The department shall prepare a table under which claims under this article must be determined. The table must be published in the department's official rules and placed in the appropriate forms. The amount of claim shown in this table for each bracket must be computed only to the nearest dollar.
Section 12-37-3380. The department shall make available suitable forms with instructions for claimants, including a form which may be included with or separate from the individual income tax return. The claim must be in the form prescribed by the department. Claimants who certify on the prescribed form that there is no income tax liability do not have to file an individual income tax return.
Section 12-37-3390. Every claimant under this article shall supply to the department, in support of his claim, a receipt for property taxes paid for purposes of this article and any changes of homestead.
Section 12-37-3400. If on the audit of a claim filed under this article the department determines the amount to have been incorrectly determined, the claim must be corrected. If the claim has been refunded or allowed as a credit against income taxes otherwise payable, the amount of the credit disallowed or refunded in error may be recovered by assessment as income taxes are assessed with applicable interest allowed by Section 12-54-25.
Section 12-37-3410. A claim for relief under this article is not allowed to a person who is a recipient of public funds for the payment of the property taxes accrued during the period for which the claim is filed.
Section 12-37-3420. A claim must be disallowed if the department finds that the claimant received title to his homestead primarily for the purpose of receiving benefits under this article."
SECTION 2. Upon approval by the Governor, this act takes effect for property tax years beginning after 1998.