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COMMITTEE REPORT
March 12, 2002
S. 870
S. Printed 3/12/02--S.
Read the first time January 15, 2002.
To whom was referred a Bill (S. 870) to amend Section 12-36-2120, as amended, Code of Laws of South Carolina, 1976, relating to sales tax exemptions, so as to exempt from the tax the gross proceeds, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/ SECTION 1. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-3525. A foster parent is allowed a credit against the tax imposed pursuant to Section 12-6-510 for purchases of articles of clothing made by the foster parent during the taxable year for the foster parent's foster child. The credit may not exceed twenty-five dollars in a taxable year for each foster child placed with the foster parent. For purposes of this section:
(1) 'article of clothing' includes those items exempted by Section 12-36-2120(57)(a)(i), (ii), and (iii) and as further described in the most recent publication pursuant to Section 12-36-2120(57)(c);
(2) 'foster child' means a child placed with a foster parent by the South Carolina Department of Social Services;
(3) 'foster parent' means a parent licensed by the South Carolina Department of Social Services to care for a foster child placed with the foster parent by that department.
The Department of Revenue may prescribe requirements for that evidence of eligibility that it determines necessary for the administration of this credit."
SECTION 2. Upon approval by the Governor, this act is effective for taxable years beginning after 2001. /
Renumber sections to conform.
Amend title to conform.
HUGH K. LEATHERMAN, JR. for Committee.
REVENUE IMPACT 1/
This bill is expected to decrease general fund revenue an estimated $144,000 in FY2002-03. Of this amount, general fund sales and use tax would be decreased by $115,200, and E.I.A. funds would be decreased by $28,800 in FY2002-03.
Explanation
This bill would create a sales and use tax exemption on the sale of articles of clothing for a foster child purchased by a foster child's parent. The articles of clothing that would be exempt from the sales tax are the same articles of clothing outlined by the Department of Revenue for the sales tax holiday during the first weekend in August. The foster child program provides for the temporary placement of a foster child in a family environment. According to the Department of Social Services, there is an average of 4,800 foster children actively engaged in the foster child program each year. Currently, as directed in the FY2001-02 Appropriation Act, Part IB, Proviso 72.17, the Department of Social Services furnishes monthly Family Foster Care payments to individuals with foster children under their care. These payments are based on the age of the foster child up to eighteen years of age to assist with the funding of the basic needs of the foster children. According to a report by the U.S. Department of Agriculture, "Expenditures on Children by Families - 2000 Annual Report", expenditures for clothing on a single child by a middle-income family in the Southern region of the U.S. are an estimated $600 per year. These figures are consistent with data reported in the "Consumer Expenditure Survey" by the U.S. Department of Labor. Multiplying 4,800 foster children by clothing expenditures of an estimated $600 per child, and applying a five percent sales tax rate yields a decrease in general fund revenue of an estimated $144,000 in FY2002-03.
Approved By:
William C. Gillespie
Board of Economic Advisors
1/ This statement meets the requirement of Section 2-7-71 for a state revenue impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an estimate of the shift in local property tax incidence.
TO AMEND SECTION 12-36-2120, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SALES TAX EXEMPTIONS, SO AS TO EXEMPT FROM THE TAX THE GROSS PROCEEDS OF SALES OF ARTICLES OF CLOTHING PURCHASED BY A FOSTER PARENT FOR THE FOSTER PARENT'S FOSTER CHILD, TO PROVIDE THAT CLOTHING QUALIFYING FOR THE EXEMPTION, AND TO PROVIDE THAT THE DEPARTMENT OF REVENUE MAY REQUIRE THAT EVIDENCE OF ELIGIBILITY IT DETERMINES NECESSARY FOR THE ADMINISTRATION OF THIS EXEMPTION.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-36-2120 of the 1976 Code is amended by adding an appropriately numbered item at the end to read:
"( ) articles of clothing purchased by a foster parent for the foster parent's foster child.
For purposes of this item:
(a) article of clothing includes those items exempted by item (57)(a)(i), (ii), and (iii) of this section and as further described in the most recent publication pursuant to item (57)(c) of this section;
(b) 'foster parent' means a parent licensed by the Department of Social Services to care for a foster child placed with the foster parent by the Department of Social Services.
The Department of Revenue may prescribe requirements for that evidence of eligibility that it determines necessary for the administration of this exemption."
SECTION 2. This act takes effect July 1, 2002.
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