South Carolina General Assembly
116th Session, 2005-2006

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S. 1289

STATUS INFORMATION

General Bill
Sponsors: Senators Campsen, McConnell, Thomas, Grooms, Verdin, Cleary, Knotts, Scott, Ryberg and Ford
Document Path: l:\s-jud\bills\campsen\jud0071.gec.doc
Companion/Similar bill(s): 1291

Introduced in the Senate on March 28, 2006
Currently residing in the Senate Committee on Judiciary

Summary: Local Option Property Tax Relief Act

HISTORY OF LEGISLATIVE ACTIONS

     Date      Body   Action Description with journal page number
-------------------------------------------------------------------------------
   3/28/2006  Senate  Introduced and read first time SJ-6
   3/28/2006  Senate  Referred to Committee on Judiciary SJ-6
   3/28/2006  Senate  Referred to Subcommittee: Martin (ch), Hutto, Ritchie, 
                        Sheheen, Campsen

View the latest legislative information at the LPITS web site

VERSIONS OF THIS BILL

3/28/2006

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A BILL

TO AMEND CHAPTER 10, TITLE 4 OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO A LOCAL OPTION SALES TAX, BY ADDING ARTICLE 7 SO AS TO ALLOW A COUNTY TO ENACT A LOCAL OPTION SALES TAX IN ORDER TO EXEMPT HOMESTEADS FROM PROPERTY TAXES IMPOSED FOR SCHOOL OPERATIONS.

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

SECTION    1.    Chapter 10, Title 4 of the 1976 Code is amended by adding:

"Article 7

Local Option Property Tax Relief Act

Section 4-10-710.    This article may be cited as the 'Local Option Sales and Use Tax for Local Property Tax Exemptions'.

Section 4-10-720.    This article provides the only method in which the governing body of a county by an ordinance imposing the tax authorized pursuant to this article thereby exempts homesteads from property taxes imposed in the county for school operations as provided in Section 3, Article X of the Constitution of this State.

Section 4-10-730.    As used in this article:

(1)    'County' has the meaning provided for in 'county area' as defined in Section 4-10-10(1).

(2)    'Homestead' means residential real property eligible for the four percent assessment ratio allowed pursuant to Section 12-43-220(c).

Section 4-10-740.    (A)    Subject to the requirements of this article, the governing body of the county, by a county council ordinance or by an initiated ordinance submitted to the governing body of the county by a petition signed by qualified electors of the county, equal in number to at least fifteen percent of the qualified electors of the county, may impose a sales and use tax in increments of one-tenth of one percent, subject to referendum approval. The rate of the tax must be set at an amount expressed in tenths of one percent estimated to be sufficient to produce revenues that do not exceed those necessary to replace property tax revenue in the county for school operations on homesteads in the most recently completed fiscal year and must take into account payments to school districts pursuant to the exemptions allowed pursuant to Sections 12-37-250 and 12-37-251. The governing body of the county shall obtain from the Board of Economic Advisors the board's certified estimate of the rate of sales and use tax necessary in the county to equal school operating property tax revenues derived from homesteads. This certified rate is the rate of tax that must appear in the referendum question.

(B)    If the sales and use tax authorized pursuant to this article is imposed in a county, then to the extent not already exempt, one hundred percent of the fair market value of a homestead in the county is exempt from all property taxes imposed for school operations.

Section 4-10-750.    (A)    Upon receipt of the ordinance, the county election commission shall conduct a referendum on the question of imposing the sales and use tax. A referendum for this purpose must be held at the time of the general election. Two weeks before the referendum, the election commission shall publish in a newspaper of general circulation the question that is to appear on the ballot. This notice is in lieu of any other notice otherwise required by law.

(B)    The referendum question to be on the ballot must read substantially as follows:

'Must a (rate) sales and use tax be imposed in (county) to replace property tax revenues not collected because of a one hundred percent property tax exemption for owner-occupied residential property from property taxes imposed for school operations?

Yes    []

No    []

(C)    All qualified electors desiring to vote in favor of imposing the tax shall vote 'Yes' and all qualified electors opposed to imposing the tax shall vote 'No'. If a majority of the votes cast are in favor of imposing the tax, the tax is imposed as provided in this article, and beginning after the year in which the referendum is held, all homesteads otherwise taxable in the county are exempt from property taxes imposed in the county for school operations. The election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the results no later than December thirty-first to the county governing body and to the Department of Revenue.

(D)    Upon receipt of the returns of the referendum, the county council, by resolution, shall declare the results thereof. The results of the referendum may not be questioned except by a suit or proceeding instituted within thirty days from the date the resolution is adopted.

Section 4-10-760.    (A)    If the sales and use tax is approved in the referendum, the tax must be imposed by ordinance on the first of July following the date of the referendum. If the certification is not timely made to the Department of Revenue, the imposition and property tax exemption is postponed for twelve months.

(B)    If the sales and use tax is not approved in the referendum, the county governing body by ordinance, or fifteen percent of the qualified electors of the county, by an initiated ordinance submitted to the governing body of the county, may provide for a subsequent referendum held in the manner provided pursuant to Section 4-10-750, but such a referendum may be held only at the time of the general election.

Section 4-10-770.    (A)    Upon petition of at least fifteen percent of the qualified electors of a county presented to the county council of the county that has implemented the sales and use tax authorized by this article requesting that this tax be rescinded, the council shall direct the county election commission to conduct a referendum on the question of rescinding the sales and use tax. A referendum for this purpose must be held on the Tuesday following the first Monday in November following verification of the petition. Two weeks before the referendum, the election commission shall publish in a newspaper of general circulation the question that is to appear on the ballot. This notice is in lieu of any other notice otherwise required by law.

(B)    The referendum question to be on the ballot must read substantially as follows:

'Must the (rate) sales and use tax imposed in (county) be rescinded with the revenue not collected replaced by extending the property tax for school operations to owner-occupied residential property previously not subject to property tax in this county?

Yes    []

No    []

(C)(1)    All qualified electors desiring to vote in favor of rescinding the tax shall vote 'Yes' and all qualified electors opposed to rescinding the tax shall vote 'No'. If a majority of the votes cast are in favor of rescinding the tax, the tax is rescinded effective July first following the referendum and property taxes for school operations apply to not otherwise exempt homesteads beginning after the year in which the referendum is held. The election commission shall conduct the referendum under the election laws of this State, mutatis mutandis, and shall certify the result no later than December thirty-first to the county council. If a majority 'Yes' vote is certified, it must be certified to the Department of Revenue by the same date.

(2)    Upon receipt of the return of the referendum, the county council shall declare the results thereof by resolution. The results of the referendum may not be questioned except by a suit or proceeding instituted within thirty days from the date the resolution is adopted.

(D)    A referendum for rescission of this tax may not be held earlier than two years after the tax has been imposed in the county. If a majority of the qualified electors voting in the rescission referendum vote against rescinding the tax, no further rescission referendums may be held for a period of two years. If a majority of the qualified electors vote in favor of rescinding the tax, the tax may not be reimposed in the county for a period of two years. The petition requesting rescission must be presented to the county governing body at least one hundred twenty days before the Tuesday following the first Monday of November of that year or the referendum must be held on the Tuesday following the first Monday of November of the following year.

Section 4-10-780.    (A)    The tax levied pursuant to this article must be administered and collected by the Department of Revenue in the same manner that other sales and use taxes are collected. The department may prescribe amounts that may be added to the sales price because of the tax.

(B)    The tax authorized by this article is in addition to all other local sales and use taxes and applies to the gross proceeds of sales in the applicable area that is subject to the tax imposed by Chapter 36 of Title 12 and the enforcement provisions of Chapter 54 of Title 12. The gross proceeds of the sale of items subject to a maximum tax in Chapter 36 of Title 12 are exempt from the tax imposed by this article. The tax imposed by this article also applies to tangible personal property subject to the use tax in Article 13, Chapter 36 of Title 12.

(C)    Taxpayers required to remit taxes under Article 13, Chapter 36 of Title 12 shall identify the county in which the personal property purchased at retail is stored, used, or consumed in this State.

(D)    Utilities shall report sales in the county in which the consumption of the tangible personal property occurs.

(E)    A taxpayer subject to the tax imposed by Section 12-36-920, who owns or manages rental units in more than one county, shall report separately in his sales tax return the total gross proceeds from business done in each county.

(F)    The gross proceeds of sales of tangible personal property delivered after the imposition date of the tax levied under this article in a county, either under the terms of a construction contract executed before the imposition date, or a written bid submitted before the imposition date, culminating in a construction contract entered into before or after the imposition date, are exempt from the sales and use tax provided for in this article if a verified copy of the contract is filed with the Department of Revenue within six months after the imposition date of the sales and use tax provided for in this article.

(G)    Notwithstanding the imposition date of the sales and use tax authorized pursuant to this chapter, with respect to services that are billed regularly on a monthly basis, the sales and use tax authorized pursuant to this article is imposed beginning on the first day of the billing period beginning on or after the imposition date.

Section 4-10-790.    (A)    The revenues of the tax collected under this article must be remitted to the Department of Revenue and placed on deposit with the State Treasurer and credited to a fund separate and distinct from the general fund of the State. After deducting the amount of any refunds made and costs to the Department of Revenue of administering the tax, not to exceed one percent of the revenues, the State Treasurer shall distribute the revenues quarterly to the county treasurer of the county in which the tax is imposed. The State Treasurer may correct misallocations by adjusting subsequent distributions, but these adjustments must be made in the same fiscal year as the misallocations.

(B)    Revenues of the tax must be distributed by the county treasurer to the school districts in the county in the proportion that each school district received all property taxes imposed in the county for school operations for the fiscal year for which the sales and use tax rate was calculated by the Board of Economic Advisors. For counties in which there is more than one school district, if the school districts unanimously agree on a distribution plan, the revenues of the tax must be distributed pursuant to the terms of the unanimous agreement.

Section 4-10-800.    The Board of Economic Advisors shall furnish data to the State Treasurer and to the school districts receiving revenues for the purpose of calculating distributions and estimating revenues. The information that must be supplied to school districts upon request includes, but is not limited to, gross receipts, net taxable sales, and tax liability by taxpayers. Information about a specific taxpayer is considered confidential and is governed by the provisions of Section 12-54-240. A person violating this section is subject to the penalties provided in Section 12-54-240.

Section 4-10-810.    A school district receiving revenues of the tax authorized pursuant to this may not impose an annual increase in property tax millage for school operations of more than the combined percentage increase in state personal income growth and school district population growth in the most recent year this data is available."

SECTION    2.    The provisions of this act take effect upon ratification of an amendment to Section 3, Article X of the Constitution of this State proposed at the time of the general election of 2006, allowing the exemption provided in Article 11, Chapter 10 of Title 4 of the 1976 Code, as added in Article 7 of this act.

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