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TO AMEND SECTION 12-6-3535 OF THE 1976 CODE, AS AMENDED, RELATING TO THE STATE INCOME TAX CREDIT ALLOWED TAXPAYERS MAKING QUALIFIED REHABILITATION EXPENDITURES FOR A CERTIFIED HISTORIC STRUCTURE IN THIS STATE, TO EXTEND THE CREDIT TO LICENSE TAXES AND TO CLARIFY THE APPLICATION OF THE CREDIT TO PASS-THROUGH ENTITIES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-6-3535(A) of the 1976 Code, as last amended by Act 69 of 2004, is amended to read:
"(A) A taxpayer who is allowed a federal income tax credit under Section 47 of the Internal Revenue Code for making qualified rehabilitation expenditures for a certified historic structure located in this State is allowed to claim a credit against the income or license tax imposed by pursuant to this chapter title. For the purposes of this section, 'qualified rehabilitation expenditures' and 'certified historic structure' are defined as provided in the Internal Revenue Code Section 47 and the applicable treasury regulations. The amount of the credit is ten percent of the expenditures that qualify for the federal credit. To claim the credit allowed by this subsection, the taxpayer must attach to the return a copy of the section of the federal income tax return showing the credit claimed, along with any other information that the Department of Revenue determines is necessary for the calculation of the credit provided by this subsection."
SECTION 2. Section 12-6-3535(C)(2) of the 1976 Code, as last amended by Act 69 of 2004, is amended to read:
"(2) For purposes of subsection (A), an "S" corporation, limited liability company, or partnership that qualifies for a credit under this subsection may pass through the credit earned to each shareholder of the "S" corporation, member of the limited liability company, or partner of the partnership. For purposes of this subsection, limited liability company means a limited liability company taxed as a partnership. The amount of the credit allowed a shareholder, member, or partner by this subsection is equal to the shareholder's percentage of stock ownership, member's interest in the limited liability company, or the partner's interest in the partnership for the taxable year multiplied by the amount of the credit earned by the entity. The credit earned pursuant to this section by an "S" corporation owing corporate level income tax must be used first at the entity level. Only the remaining credit passes through to each shareholder. The credit earned pursuant to this section by a 'S' corporation owing corporate level income tax must be used first at the entity level. Any remaining credit passes through to each shareholder in a percentage equal to each shareholder's percentage of stock ownership. The credit earned pursuant to this section by a general partnership, limited partnership, limited liability company, or any other entity taxed as a partnership pursuant to Subchapter K of the Internal Revenue Code must be passed through to its partners and may be allocated among any of its partners, including without limitation, an allocation of the entire credit to one partner, in any manner agreed by the partners."
SECTION 3. This act takes effect upon approval by the Governor and applies to applicable tax periods beginning after 2004.
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