South Carolina General Assembly
117th Session, 2007-2008

Download This Bill in Microsoft Word format

Indicates Matter Stricken
Indicates New Matter

H. 4784

STATUS INFORMATION

General Bill
Sponsors: Reps. Limehouse, Young, Bedingfield, F.N. Smith and Hamilton
Document Path: l:\council\bills\gjk\20557sd08.doc

Introduced in the House on February 28, 2008
Currently residing in the House Committee on Ways and Means

Summary: Sales and use tax increase

HISTORY OF LEGISLATIVE ACTIONS

     Date      Body   Action Description with journal page number
-------------------------------------------------------------------------------
   2/28/2008  House   Introduced and read first time HJ-32
   2/28/2008  House   Referred to Committee on Ways and Means HJ-33
    4/8/2008  House   Member(s) request name added as sponsor: Young
   4/29/2008  House   Member(s) request name added as sponsor: Bedingfield, 
                        F.N.Smith
    5/8/2008  House   Member(s) request name added as sponsor: Hamilton

View the latest legislative information at the LPITS web site

VERSIONS OF THIS BILL

2/28/2008

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

A BILL

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 12 TO CHAPTER 36, TITLE 12 SO AS TO INCREASE THE SALES AND USE TAX BY AN ADDITIONAL ONE PERCENT; BY ADDING SECTION 11-11-158 SO AS TO PROVIDE THAT THE REVENUE DERIVED FROM THIS ADDITIONAL ONE PERCENT SALES AND USE TAX MUST BE DEPOSITED IN A FUND SEPARATE AND DISTINCT FROM THE STATE GENERAL FUND TO BE KNOWN AS THE "PROPERTY TAX REDUCTION FUND" AND TO PROVIDE FOR THE MANNER IN WHICH AND PURPOSES FOR WHICH REVENUES MAY BE DISPERSED FROM THE FUND; TO AMEND SECTION 12-37-220, AS AMENDED, RELATING TO GENERAL EXEMPTIONS FROM THE PROPERTY TAX, SO AS TO EXEMPT ALL OF THE FAIR MARKET VALUE OF OWNER-OCCUPIED RESIDENTIAL PROPERTY ELIGIBLE FOR AND RECEIVING THE HOMESTEAD EXEMPTION FOR TAXPAYERS SIXTY-FIVE AND OVER OR DISABLED OR BLIND PROVIDED FOR BY SECTION 12-37-250; TO FURTHER AMEND SECTION 12-37-220, AS AMENDED, RELATING TO GENERAL EXEMPTIONS FROM THE PROPERTY TAX, SO AS TO EXEMPT THE DIFFERENCE BETWEEN THE PURCHASE PRICE OR FAIR MARKET VALUE OF A PIECE OR PARCEL OF REAL PROPERTY UPON ITS SALE OR TRANSFER AND THE PRESENT PROPERTY TAX VALUATION OF THE PROPERTY FROM THE PROPERTY TAX; AND BY ADDING SECTION 12-37-271 SO AS TO PROVIDE FOR REIMBURSEMENT TO COUNTIES, MUNICIPALITIES, SCHOOL DISTRICTS, AND SPECIAL PURPOSE DISTRICTS FOR THE REVENUE LOST AS A RESULT OF THE FULL HOMESTEAD EXEMPTION PROVIDED ABOVE, AND TO PROVIDE THAT THE BALANCE OF THE REVENUES IN ANY YEAR REMAINING IN THE PROPERTY TAX REDUCTION FUND SHALL BE DISTRIBUTED TO THE SEVERAL COUNTIES OF THIS STATE ON A PER CAPITA BASIS AND USED TO PROVIDE PROPERTY TAX CREDITS AGAINST COUNTY OPERATING AND DEBT SERVICE MILLAGE FOR PROPERTY ASSESSED AT A FOUR OR SIX PERCENT ASSESSMENT RATIO NOT OTHERWISE EXEMPT.

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

Part I

Sales Tax Increase

SECTION    1.    A.        Chapter 36, Title 12 of the 1976 Code is amended by adding:

"Article 12

Additional Sales, Use, and Casual Excise Tax

Section 12-36-1210.    Beginning June 1, 2008, an additional sales, use, and casual excise tax equal to one percent is imposed on amounts taxable pursuant to this chapter, except that this additional one percent tax does not apply to amounts taxed pursuant to Section 12-36-920(A), the tax on accommodations for transients, nor does this additional tax apply to items subject to a maximum sales and use tax pursuant to Section 12-36-2110 nor to the sale of unprepared food which may be lawfully purchased with United States Department of Agriculture food coupons.

Section 12-36-1220.    The revenue of the taxes imposed by this article must be credited to the Property Tax Reduction Fund established pursuant to Section 11-11-158.

Section 12-36-1230.    The Department of Revenue may prescribe amounts that may be added to the sales price to reflect the additional taxes imposed pursuant to this article."

B.    The provisions of Section 4-10-350(F) and (G) of the 1976 Code apply mutatis mutandis with respect to the tax imposed pursuant to Article 12, Chapter 36, Title 12 of the 1976 Code as added by this section.

SECTION    2.    Chapter 11, Title 11 of the 1976 Code is amended by adding:

"Section 11-11-158.    (A)    The revenue from the tax imposed pursuant to Article 12, Chapter 36, Title 12 is automatically credited to a fund separate and distinct from the state general fund known as the 'Property Tax Reduction Fund'. The Board of Economic Advisors shall account for the Property Tax Reduction Fund revenue separately from general fund revenues, and the board shall make an annual estimate of the receipts by the Property Tax Reduction Fund by February fifteenth of each year. This estimate must be transmitted to the State Treasurer, Comptroller General, the chairmen of the House Ways and Means Committee and the Senate Finance Committee, and to each school district and county. No portion of these revenues may be credited to the Education Improvement Act (EIA) Fund.

(B)    The revenues from the additional sales and use tax imposed pursuant to Section 12-36-1210 must be used to provide reimbursements as provided in Section 12-37-271 to counties, municipalities, school districts, and special purpose districts for the revenue lost as a result of the homestead exemption provided in Section 12-37-220(B)(50) plus the additional property tax relief provided in Section 12-37-271(D).

(C)    An unexpended balance in the Property Tax Reduction Fund at the end of a fiscal year must remain in the Property Tax Reduction Fund.

(D)    Earnings on the Property Tax Reduction Fund must be credited to the Property Tax Reduction Fund.

(E)    Nothing in this section prohibits appropriations by the General Assembly of additional revenues to the Property Tax Reduction Fund and nothing in this section prevents the General Assembly from directing the use of these additional appropriations for other specified purposes.

(F)    Revenues credited to this fund must be used as provided pursuant to Section 12-37-271."

Part II

Property Tax Exemptions

SECTION    1.    Section 12-37-220(B) of the 1976 Code, as last amended by Act 116 of 2007, is further amended by adding a new item at the end to read:

"(50)(a)    Effective for property tax years beginning after 2007, the fair market value of owner-occupied residential real property eligible for and receiving the homestead exemption provided for in Section 12-37-250 that remains subject to any property tax after first applying all other exemptions is exempt from those taxes.

(b)    Notwithstanding any other provision of law, property exempted from property tax in the manner provided in this item is considered taxable property for purposes of bonded indebtedness pursuant to Section 15 of Article X of the Constitution of this State.

(c)    The exemption allowed by this item may not be deleted or reduced except by a legislative enactment receiving a recorded roll-call vote of at least a two-thirds majority of the membership of each house of the General Assembly."

SECTION    2.    Section 12-37-220(B) of the 1976 Code, as last amended by Act 116 of 2007, is further amended by adding a new item at the end to read:

"(51)(a)    Effective for property tax years beginning in 2007 and to the extent not already exempt, upon any transfer of an improved or unimproved parcel of real property giving rise to an assessable transfer of interest, an amount equal to the difference between the purchase price of the property, as reflected on the deed of transfer or supporting affidavits, or the fair market value of the property after reappraisal due to the transfer if the property was not sold and the present value of the property for property tax purposes as reflected in the office of the county auditor is exempt from all property taxes imposed for the next ensuing year and thereafter except for the value of subsequent improvements made to the property made by the purchaser.

(b)    Notwithstanding any other provision of law, property exempted from property tax in the manner provided in this item is considered taxable property for purposes of bonded indebtedness pursuant to Section 15 of Article X of the Constitution of this State.

(c)    The exemption allowed by this item may not be deleted or reduced except by a legislative enactment receiving a recorded roll-call vote of at least a two-thirds majority of the membership of each house of the General Assembly."

Part III

Reimbursements and Credits Against Property Taxes

SECTION    1.    Article 3, Chapter 37 of Title 12 of the 1976 Code is amended by adding:

"Section 12-37-271.    (A)    From the Property Tax Reduction Fund established in Section 11-11-158, the Department of Revenue annually shall pay to the county treasurer of the county in which the dwelling is situate for the account of each county, school district, or special district in it a sum equal to the amount of taxes that was not collected for the county, school district, or special district by reason of the exemption provided for in Section 12-37-220(B)(50) and Section 12-37-250. The department also annually, from the trust fund, shall pay to the governing body of the municipality in which the dwelling is situate a sum equal to the amount of taxes that was not collected for the municipality by reason of the exemption provided for in Section 12-37-220(B)(50) and Section 12-37-250. However, no reimbursement must be paid pursuant to this section for revenue not collected because of other property tax exemptions allowed by law. The county treasurer and municipal governing body shall furnish the department on or before April first following the tax year, or during an extension authorized by the department not to exceed sixty days, an accounting or statement as prescribed by the department that reflects the amount of county, municipal, school district, or special district taxes that was not collected because of this exemption. Funds paid by the department as the result of an erroneous or improper application must be returned to the department for deposit in the general fund of the State.

(B)    Procedures for reimbursements to counties, municipalities, school districts, and special purpose districts for the reimbursements provided for in this section shall be the same to the extent applicable as for the existing homestead exemption of fifty thousand dollars now provided in Section 12-37-250.

(C)    Notwithstanding any other provision of this section, the reimbursements provided pursuant to this section for the property tax exemption allowed by Section 12-37-220(B)(50) must include full payment to each taxing entity for the incremental property tax that, in the absence of such exemption, would otherwise be payable to that taxing entity with respect to owner-occupied residential real property located in a redevelopment project area pursuant to the tax increment financing law for cities, counties, or redevelopment authorities. The payment for incremental property taxes shall be calculated in accordance with the applicable tax increment financing law and shall be based on the assessed value of, and the millage rate otherwise applicable to, the owner-occupied residential property in question.

(D)    The balance in the Property Tax Reduction Fund remaining each year after reimbursements required pursuant to Section 12-37-271(A) must be remitted to counties in the proportion that the population of the county is to the total population of the State. Population data must be as determined in the decennial United States Census and the most recent update to that data as determined by the Office of Research and Statistics of the State Budget and Control Board. Revenues received by the county must be used to provide a property tax credit against property tax millage imposed for county operations and debt service on owner-occupied residential real property classified for property tax purposes pursuant to Section 12-43-220(c) after taking into account all exemptions and on all real property subject to a six percent assessment ratio. The credit is an amount determined by dividing the total estimated revenues credited to the county during the applicable fiscal year by the number of parcels in the county eligible for the credit. Credit that exceeds the tax due on a parcel must be reallocated in a uniform amount to remaining parcels with a property tax liability for county operations and debt service. The distributions under this subsection are not an obligation of the state general fund if sufficient funds are not available to make such distributions from the Property Tax Reduction Fund."

Part IV

Time effective

SECTION    1.    Unless otherwise stated, this act takes effect upon approval by the Governor.

----XX----

This web page was last updated on Monday, October 10, 2011 at 1:39 P.M.