• Abstract and Figures
• Public Full-text

1 Indicates Matter Stricken 2 Indicates New Matter 3 4 COMMITTEE REPORT 5 April 19, 2001 6 7 H. 3777 8 9 Introduced by Rep. Robinson 10 11 S. Printed 4/19/01--H. 12 Read the first time March 21, 2001. 13 14 15 THE COMMITTEE ON WAYS AND MEANS 16 To whom was referred a Bill (H. 3777) to amend Chapter 10, 17 Title 12, Code of Laws of South Carolina, 1976, relating to the 18 Enterprise Zone Act, by adding Section 12-10-95, etc., respectfully 19 REPORT: 20 That they have duly and carefully considered the same and 21 recommend that the same do pass with amendment: 22 23 Amend the bill, as and if amended, by striking all after the 24 enacting words and inserting: 25 / SECTION 1. Chapter 10, Title 12 of the 1976 Code is amended 26 by adding: 27 “Section 12-10-95. (A) Subject to the conditions in this section, 28 a business engaged in manufacturing or processing operations or 29 technology intensive activities at a manufacturing, processing, or 30 technology intensive facility as defined in Section 12-6-3360(M) 31 and that meets the requirements of Section 12-10-50(B) may 32 negotiate with the council to claim as a credit against withholding 33 five hundred dollars a year for the retraining of a production or 34 technology employee if retraining is necessary for the qualifying 35 business to remain competitive or to introduce new technologies. 36 In addition to the yearly limits, the retraining credit claimed 37 against withholding may not exceed two thousand dollars over five 38 consecutive years for each retrained production or technology 39 employee. 40 (B) A qualifying business is eligible to claim as a retraining 41 credit against withholding the lower amount of the following:

1 [3777-1] 1 (1) the retraining credit for the applicable withholding period 2 as determined by subsection (A); or 3 (2) withholding paid to the State for the applicable 4 withholding period. 5 (C) All retraining must be approved by a technical college 6 under the jurisdiction of the State Board for Technical and 7 Comprehensive Education. A qualifying business must submit a 8 retraining program for approval by the appropriate technical 9 college. The approving technical college may provide the 10 retraining itself, subject to the retraining program, or contract with 11 other training entities to provide the required retraining. 12 (D) Travel and lodging expenses and wages for retraining 13 participants are not reimbursable. 14 (E) The qualifying business must match on a dollar-for-dollar 15 basis the amount claimed as a credit against withholding for 16 retraining. When applicable, the total amount of retraining credits 17 and matching funds must be paid to the technical college that 18 provides the training. All training costs, including costs in excess 19 of the retraining credits and matching funds, are the responsibility 20 of the business. 21 (F) A qualifying business claiming retraining credits pursuant 22 to this section is subject to the reporting and audit requirements in 23 Section 12-10-80(A). 24 (G) A qualifying business may not claim retraining credit for 25 training provided to the following production or technology 26 employees: 27 (a) temporary or contract employees; and 28 (b) employees who are subject to a revitalization agreement, 29 including a preliminary revitalization agreement.” 30 SECTION 2. Section 12-2-25 of the 1976 Code is amended to 31 read: 32 “Section 12-2-25. (A) As used in this title and unless 33 otherwise required by the context: 34 (1) ‘partnership’ includes a limited liability company taxed 35 for South Carolina income tax purposes as a partnership.; 36 (2) ‘partner’ includes any a member of a limited liability 37 company taxed for South Carolina income tax purposes as a 38 partnership.; 39 (3) ‘corporation’ includes a limited liability company or 40 professional or other association taxed for South Carolina income 41 tax purposes as a corporation.; and

1 [3777-2] 1 (4) ‘shareholder’ includes any a member of a limited 2 liability company taxed for South Carolina income tax purposes as 3 a corporation. 4 (B) Single-member limited liability companies which are not 5 taxed for South Carolina income tax purposes as a corporation, and 6 grantor trusts, to the extent they are grantor trusts, will be ignored 7 for all South Carolina tax purposes. For South Carolina tax 8 purposes: 9 (1) a single - member limited liability company, which is not 10 taxed for South Carolina income tax purposes as a corporation, is 11 not regarded as an entity separate from its owner; 12 (2) a ‘qualified subchapter ‘S’ subsidiary’, as defined in 13 Section 1361(b)(3)(B) of the Internal Revenue Code, is not 14 regarded as an entity separate from the ‘S’ corporation that owns 15 the stock of the qualified subchapter ‘S’ subsidiary; and 16 (3) a grantor trust, to the extent that it is a grantor trust, is 17 not regarded as an entity separate from its grantor. 18 (C) For purposes of this section, the Internal Revenue Code 19 reference is as provided in Section 12 - 6 - 40(A).” 20 SECTION 3. Section 12-6-40 of the 1976 Code, as last 21 amended by Section 7, Part II, Act 387 of 2000, is further amended 22 to read: 23 “Section 12-6-40. (A)(1) ‘Internal Revenue Code’ means the 24 Internal Revenue Code of 1986 as amended through December 31, 25 1999 2000, and includes the effective date provisions contained 26 therein in it. 27 (2)(a) For purposes of this title, ‘Internal Revenue Code’ is 28 deemed to contain all changes necessary for the State to administer 29 its provisions. Unless a different meaning is required: 30 ( i) ‘Secretary’, ‘Secretary of the Treasury’, or 31 ‘Commissioner’ means the Director of the Department of 32 Revenue. 33 ( ii) ‘Internal Revenue Service’ means the department. 34 (iii) ‘Return’ means the appropriate state return. 35 ( iv) ‘Income’ includes the modifications required by 36 Article 9 of this chapter and allocation and apportionment as 37 provided in Article 17 of this chapter. 38 Other terms in the Internal Revenue Code must be given the 39 meanings necessary to effectuate this item. 40 (b) For purposes of Internal Revenue Code Sections 67 41 (Two Percent Floor on Miscellaneous Itemized Deductions), 71 42 (Alimony and Separate Maintenance Payments), 85 43 (Unemployment Compensation), 165 (Losses), 170 (Charitable

1 [3777-3] 1 Contributions), 213 (Medical and Dental Expenses), 219 2 (Retirement Savings), 469 (Passive Activity Losses and Credits 3 Limited), and 631 (Gain or Loss in the Case of Timber, Coal, or 4 Domestic Iron Ore), ‘Adjusted Gross Income’ for South Carolina 5 income tax purposes means a taxpayer’s adjusted gross income for 6 federal income tax purposes without regard to the adjustments 7 required by Article 9 and Article 17 of this chapter. 8 (c) For a taxpayer utilizing the provisions of Internal 9 Revenue Code Section 1341 (Computation of Tax where Taxpayer 10 Restores Substantial Amount Held under Claim of Right) for 11 South Carolina tax purposes the phrase ‘taxes imposed by this 12 chapter’ means taxes imposed by Chapter 6 of this title. 13 (d) The terms defined in Internal Revenue Code Sections 14 7701, 7702, and 7703 have the same meaning for South Carolina 15 income tax purposes, unless a different meaning is clearly 16 required. 17 (B) All elections made for federal income tax purposes in 18 connection with Internal Revenue Code Sections adopted by this 19 State automatically apply for South Carolina income tax purposes 20 unless otherwise provided. A taxpayer may not make an election 21 solely for South Carolina income tax purposes except for elections 22 not applicable for federal purposes, including filing a combined or 23 composite return as provided in Sections 12-6-5020 and 24 12-6-5030, respectively. 25 (C) For purposes of Internal Revenue Code Sections 67 (Two 26 Percent Floor on Miscellaneous Itemized Deductions), 71 27 (Alimony and Separate Maintenance Payments), 85 28 (Unemployment Compensation), 165 (Losses), 170 (Charitable 29 Contributions), 213 (Medical and Dental Expenses), 219 30 (Retirement Savings), 469 (Passive Activity Losses and Credits 31 Limited), and 631 (Gain or Loss in the Case of Timber, Coal, or 32 Domestic Iron Ore), “Adjusted Gross Income” for South Carolina 33 income tax purposes means a taxpayer’s adjusted gross income for 34 federal income tax purposes without regard to the adjustments 35 required by Article 9 and Article 17 of this chapter. 36 (D) For a taxpayer utilizing the provisions of Internal Revenue 37 Code Section 1341 (Computation of Tax where Taxpayer Restores 38 Substantial Amount Held under Claim of Right) for South 39 Carolina tax purposes the phrase “taxes imposed by this chapter” 40 means taxes imposed by Chapter 6 of this title. 41 (E) The terms defined in Internal Revenue Code Sections 7701, 42 7702, and 7703 have the same meaning for South Carolina income 43 tax purposes, unless a different meaning is clearly required.

1 [3777-4] 1 (F)(C) If a taxpayer complies with the provisions of Internal 2 Revenue Code Section 367 (Foreign Corporations), it is not 3 necessary for the taxpayer to obtain the approval of the 4 department. The taxpayer shall attach a copy of the approval 5 received from the Internal Revenue Service to its next South 6 Carolina income tax return.” 7 SECTION 4. Section 12-6-50(11) of the 1976 Code is amended 8 to read: 9 “(11) Sections 861 through 908, 912, and 931 through 940, and 10 944 through 989 relating to the taxation of foreign income;” 11 SECTION 5. Section 12-6-2210(A) of the 1976 Code is 12 amended to read: 13 “(A) If the entire business of a taxpayer is transacted or 14 conducted within this State, the income tax as provided in this 15 chapter is measured by the entire net income of the taxpayer for 16 the taxable year. The entire business of the taxpayer is transacted 17 and or conducted within the State if the taxpayer is not subject to a 18 net income tax or a franchise tax measured by net income in 19 another state, the District of Columbia, a territory or possession of 20 the United States, or a foreign country, or and would not be subject 21 to a net income tax in another such taxing jurisdiction if the other 22 taxing jurisdiction adopted the net income tax laws of this State.” 23 SECTION 6. Section 12-6-3330(C)(2) of the 1976 Code is 24 amended to read: 25 “(2) The term ‘South Carolina earned income’ means income 26 which that is earned income within the meaning of Internal 27 Revenue Code Section 911(d)(2) or 401(c)(2)(C) which and is 28 taxable in this State, except that: 29 (a) it does not include an amount: 30 ( i) received from a retirement plan or an annuity; 31 ( ii) paid or distributed from an individual retirement plan 32 as defined in Internal Revenue Code Section 7701(a)(37); 33 (iii) received as deferred compensation; or 34 ( iv) received for services performed by an individual 35 employed by his spouse within the meaning of Internal Revenue 36 Code Section 3121(b)(3)(A)(B) as amended through December 31, 37 1987; and 38 (b) Internal Revenue Code Section 911(d)(2)(B) must be 39 applied without regard to the phrase ‘not in excess of thirty percent 40 of his share of net profits of such trade or business’.” 41 SECTION 7. Section 12-6-3410(J)(1) and (4) are amended to 42 read:

1 [3777-5] 1 “(1) ‘Corporate headquarters’ means the facility or portion of a 2 facility where corporate staff employees are physically employed, 3 and where the majority of the company’s financial, personnel, 4 legal, planning, information technology, or other headquarters 5 related functions are handled either on a regional or national basis. 6 A corporate headquarters must be a regional corporate 7 headquarters or a national corporate headquarters as defined 8 below: 9 (a) National corporate headquarters must be the sole 10 corporate headquarters in the nation and handle headquarters 11 related functions on a national basis. A national headquarters shall 12 be deemed to handle headquarters related functions on a national 13 basis from this State if the corporation has a facility in this State 14 from which the corporation engages in interstate commerce by 15 providing goods or services for customers outside of this State in 16 return for compensation. 17 (b) Regional corporate headquarters must be the sole 18 corporate headquarters within the region and must handle 19 headquarters related functions on a regional basis. For purposes of 20 this section, ‘region’ or ‘regional’ means a geographic area 21 comprised of either: 22 ( i) at least five states, including this State, or 23 (ii) two or more states, including this State, if the entire 24 business operations of the corporation are performed within fewer 25 than five states. 26 (4) ‘Headquarters related functions and services’ are those 27 functions involving financial, personnel, administrative, legal, 28 planning, information technology, or similar business functions.” 29 SECTION 8. Section 12-6-3500 of the 1976 Code is amended 30 to read: 31 “Section 12-6-3500. If the right to receive retirement income 32 by a taxpayer allowed the deduction pursuant to Section 12-6-1170 33 was earned by the taxpayer while residing in another state which 34 imposed state income tax on the employee’s contributions, a credit 35 is allowed against the taxpayer’s South Carolina income tax 36 liability in an amount sufficient to offset the taxes paid the other 37 state. This credit must be claimed over the taxpayer’s lifetime. The 38 department shall prescribe the amount of the annual credit based 39 on the taxpayer’s life expectancy at the time of the election made 40 pursuant to the taxpayer first claims the retirement income 41 deduction pursuant to Section 12-6-1170, and may require the 42 documentation it determines necessary to verify the amount of 43 income tax paid the other state on the contributions. Regardless of

1 [3777-6] 1 the tax rates applicable on the contributions in the other state, the 2 total of the credit allowed may not exceed an amount determined 3 by multiplying the contributions taxed in each year by the marginal 4 South Carolina individual income tax rate for that year.” 5 SECTION 9. Section 12-6-3520 of the 1976 Code is amended 6 to read: 7 “Section 12-6-3520. (A) There shall be is allowed as a tax 8 credit against the income tax liability of a taxpayer an amount 9 equal to fifty percent of the costs incurred by the taxpayer for 10 habitat management or construction and maintenance of 11 improvements on real property that are made to land as described 12 in Section 50-15-55(A) and which meets meet the requirements of 13 regulations promulgated by the Department of Natural Resources 14 pursuant to Section 50-15-55(A). For purposes of this section, 15 ‘costs incurred’ means those monies spent or revenue foregone for 16 habitat management or construction and maintenance, but does not 17 include revenue foregone as increases in land values or speculative 18 costs related to development. 19 (B) All costs must be incurred on land that has been designated 20 as a certified management area for endangered species enumerated 21 in Section 50-15-40 or for nongame and wildlife species 22 determined to be in need management under Section 50-15-30. 23 (C) The tax credit allowed by this section must be claimed in 24 the year that such the costs, as provided in subsection (B), are 25 incurred as provided for in subsection (B). The This credit 26 established by this section taken in one year may not exceed fifty 27 percent of the taxpayer’s income tax liability due pursuant to 28 Section 12 - 6 - 510 or 12 - 6 - 530 for that year. If the amount of the 29 credit exceeds the taxpayer’s income tax liability for that taxable 30 year, the taxpayer may carry forward any the excess for up to ten 31 years. 32 (D) If during any taxable year the landowner voluntarily 33 chooses to leave the agreement made concerning the certified areas 34 during any taxable year after taking the tax credit, then the 35 taxpayer’s tax liability for the current taxable year must be 36 increased by the full amount of any credit claimed in prior 37 previous years with respect to the property. 38 (E)(1) An ‘S’ corporation, limited liability company, or 39 partnership that qualifies for the credit under pursuant to this 40 section as an ‘S’ corporation or partnership entitles may pass 41 through the credit earned to each shareholder of the ‘S’ 42 corporation, member of the limited liability company, or partner of 43 the partnership to a nonrefundable credit against taxes. Any credit

1 [3777-7] 1 generated by an ‘S’ corporation must first be used against any tax 2 liability of the ‘S’ corporation under Section 12-6-530. Any 3 remaining credit passes through to the shareholders of the ‘S’ 4 corporation. 5 (2) The amount of the credit allowed a shareholder, member, 6 or partner, or owner of a limited liability company pursuant to this 7 section is equal to the shareholder’s percentage of stock 8 ownership, the member’s interest in the limited liability company, 9 or the partner’s interest in the partnership, for the taxable year, 10 multiplied by the amount of the credit that the taxpayer would 11 have been entitled to if it were taxed as a corporation earned by the 12 entity. Credit earned by an ‘S’ corporation owing corporate level 13 income tax must be used first at the entity level. Only the 14 remaining credit passes through to the shareholders of the ‘S’ 15 corporation. 16 (3) For purposes of this subsection, ‘limited liability 17 company’ means a limited liability company taxed like a 18 partnership.” 19 SECTION 10. Section 12-10-30 of the 1976 Code, as last 20 amended by Act 399 of 2000, is further amended to read: 21 “Section 12-10-30. As used in this chapter: 22 (1) ‘Council’ means the Advisory Coordinating Council for 23 Economic Development. 24 (2) ‘Department’ means the South Carolina Department of 25 Revenue. 26 (3) ‘Employee’ means an employee of the qualifying business 27 who works full time within the enterprise zone at the project. 28 (4) ‘Gross wages’ means wages subject to withholding. 29 (5) ‘Job development credit’ means the amount a qualifying 30 business may claim as a credit against employee withholding 31 pursuant to Sections 12-10-80 and 12-10-81 and a revitalization 32 agreement. 33 (6) ‘New job’ means a job created or reinstated as defined in 34 Section 12-6-3360(M)(3). 35 (7) ‘Qualifying business’ means a business that meets the 36 requirements of Section 12-10-50 and other applicable 37 requirements of this chapter and, where required pursuant to 38 Section 12-10-50, enters into a revitalization agreement with the 39 council to undertake a project pursuant to the provisions of this 40 chapter. 41 (8) ‘Project’ means an investment for one or more purposes 42 pursuant to this chapter needed for a qualifying business to locate,

1 [3777-8] 1 remain, or expand in this State and otherwise fulfill the 2 requirements of this chapter. 3 (9) ‘Preliminary revitalization agreement’ means the 4 application by the qualifying business for benefits pursuant to 5 Section 12-10-80 or 12 - 10 - 81 if the council approves the 6 application and agrees in writing at the time of approval to allow 7 the approved application to serve as the preliminary revitalization 8 agreement. The date of the preliminary revitalization agreement is 9 the date of the council approval. 10 (10) ‘Revitalization agreement’ means an executed agreement 11 entered into between the council and a qualifying business that 12 describes the project and the negotiated terms and conditions for a 13 business to qualify for a job development credit pursuant to 14 Section 12-10-80 or 12-10-81. 15 (11) ‘Qualifying expenditures’ means those expenditures that 16 meet the requirements of Section 12-10-80(C) or 12-10-81(D). 17 (12) ‘Withholding’ means employee withholding pursuant to 18 Chapter 8 of this title. 19 (13) ‘Technology employee’ means an employee whose job 20 qualifies for jobs tax credit pursuant to at a technology intensive 21 facility as defined in Section 12-6-3360(M)(14) who is directly 22 engaged in technology intensive activities at that facility. 23 (14) ‘Production employee’ means an employee directly 24 engaged in manufacturing or processing at a manufacturing or 25 processing facility as defined in Section 12 - 6 - 3360(M). 26 (15) ‘Retraining agreement’ means an agreement entered into 27 between a business and the council in which a qualifying business 28 is entitled to retraining credit pursuant to Section 12 - 10 - 95. 29 (16) ‘Retraining credit’ means the amount that a business may 30 claim as a credit against withholding pursuant to Section 12 - 10 - 95 31 and the retraining agreement. 32 (17) ‘Technology intensive activities’ means the design, 33 development, and introduction of new products or innovative 34 manufacturing processes, or both, through the systematic 35 application of scientific and technical knowledge at a technology 36 intensive facility as defined in Section 12 - 6 - 3360(M).” 37 SECTION 11. Section 12-10-50 of the 1976 Code, as last 38 amended by Act 399 of 2000, is further amended to read: 39 “Section 12-10-50. (A) To qualify for the benefits provided in 40 this chapter, a business must be located within this State and must: 41 (1) be engaged primarily in a business of the type identified in 42 Section 12-6-3360;

1 [3777-9] 1 (2) provide a benefits package, including health care, to 2 full-time employees at the project; 3 (3) enter into a revitalization agreement that is approved by the 4 council and that describes a minimum job requirement and 5 minimum capital investment requirement for the project as 6 provided in Section 12-10-90, except that a revitalization 7 agreement is not required for a qualifying business with respect to 8 Section 12-10-80(D); and 9 (4) have negotiated incentives that council has determined are 10 appropriate for the project, and the council shall certify that: 11 (a) the total benefits of the project exceed the costs to the 12 public; and 13 (b) the business otherwise fulfills the requirements of this 14 chapter. 15 (B) To qualify for benefits pursuant to Section 12 - 10 - 95, a 16 business must: 17 (1) be engaged in manufacturing or processing operations or 18 technology intensive activities at a manufacturing, processing, or 19 technology intensive facility as defined in Section 12 - 6 - 3360(M); 20 (2) provide a benefits package, including health care, to 21 employees being retrained; and 22 (3) enter into a retraining agreement with the council.” 23 SECTION 12. Section 12-10-80 of the 1976 Code, as last 24 amended by Act 399 of 2000, is further amended to read: 25 “Section 12-10-80. (A) A business that qualifies pursuant to 26 Section 12-10-50(A) and has submitted independently audited 27 proof to the council that the business has met the minimum job 28 requirement and minimum capital investment provided for in the 29 revitalization agreement may claim job development credits as 30 determined by this section. 31 (1) A business may claim job development credits against its 32 withholding on its quarterly state withholding tax return for the 33 amount of job development credits allowable pursuant to this 34 section. 35 (2) A business that is current with respect to its withholding 36 tax and other tax due and owing the State and that has maintained 37 its minimum employment and investment levels identified in the 38 revitalization agreement may claim the credit on a quarterly basis 39 beginning with the first quarter after the council’s certification to 40 the department that the minimum employment and capital 41 investment levels were met for the entire quarter. If a qualifying 42 business is not current as to all taxes due and owing to the State as 43 of the date of the return on which the credit would be claimed,

1 [3777-10] 1 without regard to extensions, the business is barred from claiming 2 the credit that would otherwise be allowed for that quarter. 3 (3) A qualifying business may receive claim its initial job 4 development credit only after the council has certified to the 5 department that the qualifying business has met the required 6 minimum employment and capital investment levels. 7 (4) To be eligible to apply to the council to claim a job 8 development credit, a qualifying business shall create at least ten 9 new, full-time jobs, as defined in Section 12-6-3360(M), at the 10 project described in the revitalization agreement within five years 11 of the effective date of the agreement. 12 (5) A qualifying business is eligible to claim a job 13 development credit pursuant to the revitalization agreement for not 14 more than fifteen years. 15 (6) To the extent any return of an overpayment of 16 withholding that results from claiming job development credits is 17 not used as permitted by subsection (C) or (D) by Section 18 12 - 10 - 95, it must be treated as misappropriated employee 19 withholding. 20 (7) Except as provided in subsection (D), Job development 21 credits may not be claimed for purposes of this section with regard 22 to an employee whose job was created in this State before the 23 taxable year of the qualifying business in which it enters into a 24 preliminary revitalization agreement. 25 (8) If a qualifying business claims job development credits 26 pursuant to this section, it shall make its payroll books and records 27 available for inspection by the council and the department at the 28 times the council and the department request. Each qualifying 29 business claiming job development credits pursuant to this section 30 shall file with the council and the department the information and 31 documentation requested by the council or department respecting 32 employee withholding, the job development credit, and the use of 33 any overpayment of withholding resulting from the claiming of a 34 job development credit according to the revitalization agreement. 35 (9) Each qualifying business claiming in excess of ten 36 thousand dollars in a calendar year must furnish an audited report 37 prepared by an independent certified public accountant that 38 itemizes the sources and uses of the funds. The audited report must 39 be filed with the council and the department no later than June 40 thirtieth following the calendar year in which the job development 41 credits are claimed, except when a qualifying business obtains the 42 written approval by the council for an extension of that date. 43 Extensions may be granted only for good cause shown. The

1 [3777-11] 1 department shall impose a penalty pursuant to Section 12 - 54 - 210 2 for all reports filed after June thirtieth or the approved extension 3 date, whichever is later. 4 (10) Each qualifying business claiming ten thousand dollars 5 or less in any calendar year must furnish a report prepared by the 6 company that itemizes the sources and uses of the funds. This 7 report must be filed with the council and the department no later 8 than June thirtieth following the calendar year in which the job 9 development credits are claimed, except when a qualifying 10 business obtains the written approval by the council for an 11 extension of that date. Extensions may be granted only for good 12 cause shown. The department shall impose a penalty pursuant to 13 Section 12 - 54 - 210 for all reports filed after June thirtieth or the 14 approved extension date, whichever is later. 15 (11) An employer may not claim an amount that results in an 16 employee’s receiving a smaller amount of wages on either a 17 weekly or on an annual basis than the employee would receive 18 otherwise in the absence of this chapter. 19 (B)(1) The maximum job development credit a qualifying 20 business may claim for new employees is limited to the lesser of 21 withholding tax paid to the State on a quarterly basis or the sum of 22 the following amounts: 23 (a) two percent of the gross wages of each new employee 24 who earns 6.74 dollars $6.95 or more an hour but less than 8.99 25 dollars $9.27 an hour; 26 (b) three percent of the gross wages of each new 27 employee who earns 8.99 dollars 9.27 or more an hour but less 28 than 11.23 dollars $11.58 an hour; 29 (c) four percent of the gross wages of each new employee 30 who earns 11.23 dollars $11.58 or more an hour but less than 31 16.85 dollars $17.38 an hour; and 32 (d) five percent of the gross wages of each new employee 33 who earns 16.85 dollars $17.38 or more an hour. 34 (2) The hourly gross wage figures in item (1) must be 35 adjusted annually by an inflation factor determined by the State 36 Budget and Control Board. The amount that may be claimed by a 37 qualifying business is limited by subsection (C) and the 38 revitalization agreement. The council may approve a waiver of 39 ninety-five percent of the limits pursuant to subsection (C) for 40 qualifying businesses making a significant capital investment as 41 defined in Section 4-12-30(D)(4) or Section 4-29-67(D)(4). 42 (C) To claim a job development credit, the qualifying business 43 must incur qualified expenditures at the project or for utility or

1 [3777-12] 1 transportation improvements that serve the project. To be 2 qualified, the expenditures must be: 3 (1) incurred during the term of the revitalization agreement, 4 including a preliminary revitalization agreement, or within sixty 5 days before the execution of a revitalization agreement, including a 6 preliminary revitalization agreement council’s receipt of an 7 application for benefits pursuant to this section; 8 (2) authorized by the revitalization agreement; and 9 (3) used for any of the following purposes: 10 (a) training costs and facilities; 11 (b) acquiring and improving real estate whether 12 constructed or acquired by purchase, or in cases approved by the 13 council, acquired by lease or otherwise; 14 (c) improvements to both public and private utility 15 systems including water, sewer, electricity, natural gas, and 16 telecommunications; 17 (d) fixed transportation facilities including highway, rail, 18 water, and air; 19 (e) construction or improvements of real property and 20 fixtures constructed or improved primarily for the purpose of 21 complying with local, state, or federal environmental laws or 22 regulations; 23 (f) employee relocation expenses associated with new or 24 expanded technology intensive facilities as defined in Section 25 12-6-3360(M)(14); 26 (g) financing the costs of a purpose described in items (a) 27 through (f). 28 (D)(1) The amount of job development credits a qualifying 29 business may claim for its use for qualifying expenditures is 30 limited according to the designation of the county as defined in 31 Section 12-6-3360(B) as follows: 32 (1)(a) one hundred percent of the maximum job 33 development credits may be claimed by businesses located in 34 counties designated as ‘least developed’; 35 (2)(b) eighty-five percent of the maximum job 36 development credits may be claimed by businesses located in 37 counties designated as ‘underdeveloped’; 38 (3)(c) seventy percent of the maximum job development 39 credits may be claimed by businesses located in counties 40 designated as ‘moderately developed’; or 41 (4)(d) fifty-five percent of the maximum job development 42 credits may be claimed by businesses located in counties 43 designated as ‘developed’.

1 [3777-13] 1 (2) The amount that may be claimed as a job development 2 credit by a qualifying business is limited by this subsection and by 3 the revitalization agreement. The council may approve a waiver of 4 ninety - five percent of the limits provided in item (1) for a 5 qualifying business making a significant capital investment as 6 defined in Section 4 - 12 - 30(D)(4), 4 - 29 - 67(D)(4), or 12 - 44 - 30(8). 7 (3) The county designation of the county in which the 8 project is located at the time the qualifying business enters into a 9 preliminary revitalization agreement with the council remains in 10 effect for the entire period of the revitalization agreement, except 11 as to additional jobs created pursuant to an amendment to a 12 revitalization agreement entered into before June 1, 1997, as 13 provided in Section 12-10-60. In that case the county designation 14 on the date of the amendment remains in effect for the remaining 15 period of the revitalization agreement as to any additional jobs 16 created after the effective date of the amendment. This item does 17 not apply to a business whose application for job development fees 18 or credits pursuant to Section 12-10-81 has been approved by 19 council before the effective date of this act. 20 (E) The council shall certify to the department the maximum 21 job development credit for each qualifying business. After 22 receiving certification, the department shall remit an amount equal 23 to the difference between the maximum job development credit 24 and the job development credit actually claimed to the State Rural 25 Infrastructure Fund as defined and provided in Section 12-10-85. 26 (D)Subject to the conditions in this section, a qualifying 27 business in this State may negotiate with the council to claim a job 28 development credit for retraining according to the procedure in 29 subsection (A) in an amount equal to five hundred dollars a year 30 for each production and technology employee being retrained, 31 where this retraining is necessary for the qualifying business to 32 remain competitive or to introduce new technologies. This 33 retraining must be approved and performed by the appropriate 34 technical college under the jurisdiction of the State Board for 35 Technical and Comprehensive Education. The technical college 36 may provide the retraining program delivery directly or contract 37 with other training entities to accomplish the required training 38 outcomes. In addition to the yearly limits, the amount claimed as a 39 job development credit for retraining may not exceed two thousand 40 dollars over five years for each production employee being 41 retrained. Additionally, the qualifying business must match on a 42 dollar-for-dollar basis the amount claimed as a job development 43 credit for retraining. The total amount claimed as job development

1 [3777-14] 1 credits for retraining and all of the matching funds of the 2 qualifying business must be paid to the technical college that 3 provides the training to defray the cost of the training program. 4 Training cost in excess of the job development credits for 5 retraining and matching funds is the responsibility of the 6 qualifying business based on negotiations with the technical 7 college. 8 (E)(F) Any job development credit of a qualifying business 9 permanently lapses upon expiration or termination of the 10 revitalization agreement. If an employee is terminated, the 11 qualifying business immediately must cease to claim job 12 development credits as to that employee. 13 (F) The statute of limitations provided by Section 12-54-85 is 14 suspended until the end of the five-year period described in item 15 (4) of subsection (A) with respect to state withholding taxes 16 pursuant to this section for a business subject to this section. 17 (G) For purposes of the job development credit allowed by this 18 section, an employee is a person whose job was created in this 19 State. 20 (H) Job development credits may not be claimed by a 21 governmental employer who employs persons at a closed or 22 realigned military installation as defined in Section 12-10-88(E).” 23 SECTION 13. Section 12-10-81 of the 1976 Code, as last 24 amended by Act 399 of 2000, is further amended to read: 25 “Section 12-10-81. (A) A business may claim a job 26 development credit as determined by this section if the: 27 (1) council approves the use of this section for the business; 28 (2) business qualifies pursuant to Section 12-10-50; and 29 (3) business is a tire manufacturer that has more than four 30 hundred twenty-five million dollars in capital invested in this State 31 and employs more than one thousand employees in this State and 32 that commits within a period of five years from the date of a 33 revitalization agreement, to invest an additional three hundred fifty 34 million dollars and create an additional three hundred fifty jobs in 35 this State qualifying for job development fees or credits pursuant 36 to current or future revitalization agreements; except that the 37 business must submit independently audited proof to the council 38 that the business has satisfied all minimum capital investment and 39 job requirements identified in the revitalization agreements but not 40 certified by the council to the department before July 1, 2001. The 41 council, in its discretion, may extend the five-year period for two 42 additional years if the business has made a commitment to the 43 additional three hundred fifty million dollars and makes substantial

1 [3777-15] 1 progress toward satisfying the goal before the end of the initial 2 five-year period. A business that represents to the council its intent 3 to qualify pursuant to this section and is approved by the council 4 may put job development fees computed pursuant to this section 5 into an escrow account until the date the business satisfies provides 6 independently audited proof to the council that the business has 7 satisfied the capital and job requirements of this section. 8 (B)(1) A business qualifying pursuant to this section may claim 9 its job development credit against its withholding on its quarterly 10 state withholding tax return for the amount of job development 11 credit allowable pursuant to this section for not more than fifteen 12 years. Job development credits allowed pursuant to subsection (C) 13 (1)(a) through (d) of this section apply only to withholding on jobs 14 created pursuant to a revitalization agreement adopted pursuant to 15 this section and to the amounts withheld on wages and salaries on 16 those jobs. 17 (2) A business that is current with respect to its withholding 18 tax as well as any other tax due and owing the State and that has 19 maintained its minimum employment and investment levels 20 identified in the revitalization agreement may claim the credit on a 21 quarterly basis beginning with the quarter subsequent to the 22 council’s certification to the department that the minimum 23 employment and capital investment levels have been met for the 24 entire quarter. If a qualifying business is not current as to all taxes 25 due and owing to the State as of the date of the return on which the 26 credit would be claimed, without regard to extensions, the business 27 is barred from claiming the credit that would otherwise be allowed 28 for that quarter. 29 (3) To be eligible to apply to the council to claim a job 30 development credit pursuant to this section, a qualifying business 31 must create at least ten new, full-time jobs as defined in Section 32 12-6-3360(M) at the project or projects described in the 33 revitalization agreement. 34 (4) To the extent a return of an overpayment of withholding 35 that results from claiming job development credits is not used as 36 permitted by subsection (D), it must be treated as misappropriated 37 employee withholding. 38 (5) Job development credits may not be claimed for 39 purposes of this section with regard to an employee whose job was 40 created in this State before the taxable year the qualifying business 41 enters into a preliminary revitalization agreement. 42 (6) If a qualifying business claims job development credits 43 pursuant to this section, it must make its payroll books and records

1 [3777-16] 1 available for inspection by the council and the department at the 2 times the council and the department request. Each qualifying 3 business claiming job development credits pursuant to this section 4 must file with the council and the department the information and 5 documentation they request respecting employee withholding, the 6 job development credit, and the use of overpayment of withholding 7 resulting from the claiming of a job development credit according 8 to the revitalization agreement. 9 (7) Each qualifying business must furnish an audited report 10 prepared by an independent certified public accountant that 11 itemizes the sources and uses of the funds. The audited report must 12 be filed with the council and the department no later than June 13 thirtieth following the calendar year in which the job development 14 credits are claimed, except when a qualifying business obtains 15 written approval of council for an extension of that date. 16 Extensions may be granted for good cause shown. The department 17 shall impose a penalty pursuant to Section 12 - 54 - 210 for all 18 reports filed after June thirtieth or the approved extension date, 19 whichever is later. 20 (8) An employer may not claim an amount that results in an 21 employee’s receiving a smaller amount of wages on either a 22 weekly or on an annual basis than the employee would otherwise 23 receive in the absence of this chapter. 24 (C)(1) The maximum job development credit a qualifying 25 business may claim for new employees is determined by the sum 26 of the following amounts: 27 (a) two percent of the gross wages of each new employee 28 who earns $6.74 $6.95 or more an hour but less than $8.99 $9.27 29 an hour; 30 (b) three percent of the gross wages of each new 31 employee who earns $8.99 $9.27 or more an hour but less than 32 $11.23 $11.58 an hour; 33 (c) four percent of the gross wages of each new employee 34 who earns $11.23 $11.58 or more an hour but less than $16.85 35 $17.38 an hour; 36 (d) five percent of the gross wages of each new employee 37 who earns $16.85 $17.38 or more an hour; and 38 (e) the increase in the state sales and use tax of the 39 business from the year of the effective date of its revitalization 40 agreement pursuant to this section and subsequent years, over its 41 state sales and use tax for the first of the three years preceding the 42 effective date of this revitalization agreement.

1 [3777-17] 1 (2) The hourly base wages in item (1) must be adjusted 2 annually by the inflation factor determined by the State Budget and 3 Control Board. The amount that may be claimed by a qualifying 4 business is limited by subsection (E) and the negotiated terms of 5 the revitalization agreement. The business may proceed by using 6 either the job development fee escrow procedure available 7 pursuant to revitalization agreements with effective dates before 8 1997, or the job development credit, or a combination of the two. 9 For a business qualifying pursuant to this section, the council also 10 may approve or waive sections of a revitalization agreement and 11 the council’s rules as needed, in the council’s discretion, to assist 12 the business. 13 (D) To claim a job development credit, the qualifying business 14 must incur expenditures at the project or for utility or 15 transportation improvements that serve the project. To be 16 qualified, the expenditures must be: 17 (1) incurred during the term of the revitalization agreement, 18 including a preliminary revitalization agreement, or within sixty 19 days before council’s receipt of an application for benefits 20 pursuant to this section; 21 (2) authorized by the revitalization agreement; and 22 (3) used to reimburse the business for: 23 (a) training costs and facilities; 24 (b) acquiring and improving real estate whether 25 constructed or acquired by purchase, or in cases approved by the 26 council, acquired by lease or otherwise; 27 (c) improvements to both public and private utility 28 systems including water, sewer, electricity, natural gas, and 29 telecommunication; 30 (d) fixed transportation facilities including highway, rail, 31 water, and air; or 32 (e) construction or improvements of real property and 33 fixtures constructed or improved primarily for the purpose of 34 complying with local, state, or federal environmental laws or 35 regulations. 36 (E)(1) For purposes of subsection (C)(1)(a) through (d), the 37 amount of job development credits a qualifying business may 38 claim for its use for qualifying expenditures is limited according to 39 the designation of the county as defined in Section 12-6-3360(B) 40 as follows: 41 (a) one hundred percent of the maximum job development 42 credits may be claimed by businesses located in counties 43 designated as ‘least developed’;

1 [3777-18] 1 (b) eighty-five percent of the maximum job development 2 credits may be claimed by businesses located in counties 3 designated as ‘underdeveloped’; 4 (c) seventy percent of the maximum job development 5 credits may be claimed by businesses located in counties 6 designated as ‘moderately developed’; or 7 (d) fifty-five percent of the maximum job development 8 credits may be claimed by businesses located in counties 9 designated as ‘developed’. 10 (2) For purposes of this subsection, the county designation 11 of the county in which the project is located at the time the 12 qualifying business enters into a preliminary revitalization 13 agreement with the council remains in effect for the entire period 14 of the revitalization agreement. 15 (3) The amount claimed by a qualifying business is limited 16 by this subsection and the terms of the revitalization agreements. 17 The business may use either the job development escrow 18 procedure pursuant to revitalization agreements with effective 19 dates before 1997 or the job development credit, or a combination 20 of the two. For a business qualifying pursuant to this section, the 21 council also may approve or waive sections of a revitalization 22 agreement and rules of the council, in the council’s discretion, to 23 assist the business. 24 (4) The council shall certify to the department the maximum 25 job development credit for each qualifying business. After 26 receiving certification, the department shall remit an amount equal 27 to the difference between the maximum job development credit 28 and the job development credit actually claimed to the State Rural 29 Infrastructure Fund as defined and provided in Section 12-10-85. 30 (F) A job development credit of a qualifying business 31 permanently lapses upon expiration or termination of the 32 revitalization agreement. If an employee is terminated, the 33 qualifying business immediately must cease to claim job 34 development credits as to that employee. 35 (G) The statute of limitations provided by Section 12-54-85 is 36 suspended until the end of the five-year or seven-year period 37 described in item (3) of subsection (A) with respect to state 38 withholding taxes pursuant to this section for a business subject to 39 this section. 40 (H) For purposes of the job development credit allowed by this 41 section, an employee is a person whose job was created in this 42 State.”

1 [3777-19] 1 SECTION 14. Section 12-13-20 of the 1976 Code is amended 2 to read: 3 “Section 12-13-20. The term ‘net income’, as used in this 4 chapter, means taxable income as determined for a regular 5 corporation in Chapter 7 6 of this title after deducting all earnings 6 accrued, paid, credited, or set aside for the benefit of holders of 7 savings or investment accounts, any additions to reserves which 8 are required by law, regulation, or direction of appropriate 9 supervisory agencies, and a bad debt deduction. The bad debt 10 deduction allowable for South Carolina income tax purposes is the 11 amount determined under the Internal Revenue Code and the 12 applicable regulations as amended through December 31, 1986 as 13 defined in Section 12 - 6 - 40. No deductions from income are 14 allowed for any additions to undivided profits or surplus accounts 15 other than herein required, and for the purposes of this chapter, a 16 state-organized association is allowed the same deductions for bad 17 debt reserves as those allowed to federally organized associations. 18 Associations shall maintain the bad debt reserves allowed as a 19 deduction pursuant to this section in accordance with the 20 provisions of the Internal Revenue Code as amended through 21 December 31, 1986, as defined in Section 12 - 6 - 40 and shall keep a 22 permanent record. These provisions are controlling 23 notwithstanding any other provision of law.” 24 SECTION 15. Section 12-13-60 of the 1976 Code is amended 25 to read: 26 “Section 12-13-60. For the purpose of administration, 27 enforcement, collection, liens, penalties, and other similar 28 provisions, all of the provisions of Chapter 7 6 of this title that may 29 be are appropriate or applicable are adopted and made a part of this 30 chapter, including the requirement to make declarations 31 requirements of declaration and payment of estimated tax and 32 make estimated tax payments.” 33 SECTION 16. Section 12-20-90 of the 1976 Code is amended 34 to read: 35 “Section 12-20-90. The amount of the license fee required by 36 Section 12-20-50 for a bank holding company, insurance holding 37 company system, and savings and loan holding company must be 38 measured by the capital stock and paid-in surplus of the holding 39 company exclusive of the capital stock and paid-in surplus of a 40 bank, insurer, or savings and loan association that is a subsidiary 41 of the holding company. For the purposes of this section, ‘bank’, 42 ‘bank holding company’, and ‘subsidiary’ of a bank holding 43 company have the same definitions as in Section 34-24-20;

1 [3777-20] 1 ‘insurer’, ‘insurance holding company system’, and a ‘subsidiary’ 2 of an insurance holding company system have the same definitions 3 as in Section 38-21-10; and savings and loan ‘association’, 4 ‘savings and loan holding company’, and a ‘subsidiary’ of a 5 savings and loan company have the same definitions as in Section 6 34-28-300.” 7 SECTION 17. Section 12-20-110 of the 1976 Code is 8 amended to read: 9 “Section 12-20-110. The provisions of this chapter do not 10 apply to any: 11 (1) nonprofit corporation organized under Article 1 of pursuant 12 to Chapter 31 or 33 of Title 33 and exempt from income taxes 13 pursuant to Section 501 of the Internal Revenue Code of 1986; 14 (2) volunteer fire department and rescue squad; 15 (3) cooperative organized under Chapter 45 or 47 of pursuant 16 to Title 33; 17 (4) bank, building and loan association, or credit union doing a 18 strictly mutual business; 19 (5) insurance company or association including any a fraternal, 20 beneficial, or mutual protection insurance company; or 21 (6) foreign corporation whose entire income is not included in 22 excluded from gross income for federal income tax purposes due 23 to any a treaty obligation of the United States; or 24 (7) homeowners’ association within the meaning of Internal 25 Revenue Code Section 528(c)(1).” 26 SECTION 18. Section 12-28-1135(A) of the 1976 Code is 27 amended to read: 28 “(A) Each person who engages in the business of selling taxable 29 motor fuel at wholesale or retail or storing or distributing 30 purchases taxable motor fuel for resale within this State from a 31 licensed terminal supplier first shall obtain a fuel vendor license 32 which is operative for all locations controlled or operated by that 33 licensee in this State or in any other state from which the person 34 removes fuel for delivery and use in South Carolina.” 35 SECTION 19. A.Section 12-28-1730(E) of the 1976 Code is 36 amended to read: 37 “(E) The department may impose a civil penalty against every 38 terminal operator who wilfully fails to meet shipping paper 39 issuance requirements under Sections 12-28-920, 12-28-1500, and 40 12-28-1575 or files a return without the supporting schedules as 41 required by the department pursuant to Sections 12 - 28 - 1330 and 42 12 - 28 - 1340. The civil penalty imposed on the terminal operator is 43 the same as the civil penalty imposed under subsection (B).”

1 [3777-21] 1 B.Section 12-28-1730 of the 1976 Code is amended by adding: 2 “(H) If a person liable for the tax files a return without providing 3 all information required by the department, there is added to the 4 tax the amount provided in Section 12 - 54 - 43(C)(1).” 5 SECTION 20. Section 12-36-90(2)(h) of the 1976 Code is 6 amended to read: 7 “(h) the sales price, not including sales tax, of property on sales 8 which are actually charged off as bad debts or uncollectible 9 accounts for state income tax purposes. A taxpayer who pays the 10 tax on the unpaid balance of an account which has been found to 11 be worthless and is actually charged off for state income tax 12 purposes may take credit for the tax paid a deduction for the sales 13 price charged off as a bad debt or uncollectible account on a return 14 filed pursuant to this chapter, except that if an amount charged off 15 is later paid in whole or in part to the taxpayer, the amount paid 16 must be included in the first return filed after the collection and the 17 tax paid. The deduction allowed by this provision must be taken 18 within one year of the month the amount was determined to be a 19 bad debt or uncollectible account.” 20 SECTION 21. Section 12-36-130 of the 1976 Code, as last 21 amended by Section 2, Act 283 of 2000, is further amended by 22 adding a paragraph at the end to read: 23 “The term ‘sales price’ as defined in this section, also does not 24 include the sales price, not including tax, of property on sales 25 which are actually charged off as bad debts or uncollectible 26 accounts for state income tax purposes. A taxpayer who pays the 27 tax on the unpaid balance of an account which has been found to 28 be worthless and is actually charged off for state income tax 29 purposes may take a deduction for the sales price charged of as a 30 bad debt or uncollectible account on a return filed pursuant to this 31 chapter, except that if an amount charged off is later paid in whole 32 or in part to the taxpayer, the amount paid must be included in the 33 first return filed after the collection and the tax paid. The 34 deduction allowed by this paragraph must be taken within one year 35 of the month the amount was determined to be a bad debt or 36 uncollectible account.” 37 SECTION 22. Section 12-36-910(B)(3) of the 1976 Code is 38 amended to read: 39 “(3) gross proceeds accruing or proceeding from the charges for 40 the ways or means for the transmission of the voice or messages, 41 including the charges for use of equipment furnished by the seller 42 or supplier of the ways or means for the transmission of the voice 43 or messages. Charges for mobile telecommunications services

1 [3777-22] 1 subject to the tax under this item must be sourced in accordance 2 with the Mobile Telecommunications Sourcing Act as provided in 3 Title 4 of the United States Code. The term ‘charges for mobile 4 telecommunications services’ is defined for purposes of this 5 section the same as it is defined in the Mobile Telecommunications 6 Sourcing Act. All other definitions and provisions of the Mobile 7 Telecommunications Sourcing Act as provided in the Title 4 of the 8 United States Code are adopted;” 9 SECTION 23. Section 12-36-910(B) of the 1976 Code is 10 amended by adding: 11 “(5) gross proceeds accruing or proceeding from the sale or 12 recharge at retail or prepaid wireless calling arrangements. 13 (a) ‘Prepaid wireless calling arrangements’ means 14 communication services that: 15 ( i) are used exclusively to purchase wireless 16 telecommunications; 17 ( ii) are purchased in advance; 18 (iii) allow the purchaser to originate telephone calls by 19 using an access number, authorization code, or other means 20 entered manually or electronically; and 21 ( iv) are sold in units or dollars which decline with use in a 22 known amount. 23 (b) All charges for prepaid wireless calling arrangements 24 must be sourced to the: 25 ( i) location in this State where the over-the-counter sale 26 took place; 27 ( ii) shipping address if the sale did not take place at the 28 seller’s location and an item is shipped; or 29 (iii) either the billing address or location associated with 30 the mobile telephone number if the sale did not take place at the 31 seller’s location and no item is shipped.” 32 SECTION 24. Section 12-36-940 of the 1976 Code is 33 amended to read: 34 “Section 12-36-940. (A) Every Each retailer may add to the 35 sales price as a result of the five percent state sales tax: 36 (1) no amount on sales of ten cents or less; 37 (2) one cent on sales of eleven cents and over, but not in 38 excess of through twenty cents; 39 (3) two cents on sales of twenty-one cents and over, but not 40 in excess of through forty cents; 41 (4) three cents on sales of forty-one cents and over, but not 42 in excess of through sixty cents;

1 [3777-23] 1 (5) four cents on sales of sixty-one cents and over, but not in 2 excess of through eighty cents; 3 (6) five cents on sales of eighty-one cents and over, but not 4 in excess of through one dollar; 5 (7) one cent additional for each twenty cents or major 6 fraction thereon in excess of it over of one dollar. 7 (B) The inability, impracticability, refusal, or failure to add 8 these amounts to the sales price and collect them from the 9 purchaser does not relieve the taxpayer from the tax levied by this 10 article. 11 (C) For purposes of the state sales tax on accommodations and 12 applicable combined state sales and local tax for counties imposing 13 a local sales tax collected by the department on their behalf, 14 retailers may add to the sales price an amount equal to the total 15 state and local sales tax rate times the sales price. The amount 16 added to the sales price may not be less than the amount added 17 pursuant to subsection (A). In calculating the tax due, retailers 18 may round a fraction of more than one - half of a cent to the next 19 whole cent and a fraction of a cent of one - half or less must be 20 eliminated. The inability, impracticability, refusal, or failure to 21 add the tax to the sales price as allowed by this subsection and 22 collect them from the purchaser does not relieve the taxpayer of 23 his responsibility to pay tax.” 24 SECTION 25. Section 12-36-1310(B)(3) of the 1976 Code is 25 amended to read: 26 “(3) gross proceeds accruing or proceeding from the charges 27 for the ways or means for the transmission of the voice or 28 messages, including the charges for use of equipment furnished by 29 the seller or supplier of the ways or means for the transmission of 30 the voice or messages. Charges for mobile telecommunications 31 services subject to the tax under this item must be sourced in 32 accordance with the Mobile Telecommunications Sourcing Act as 33 provided in Title 4 of the United States Code. The term ‘charges 34 for mobile telecommunications services’ is defined for purposes of 35 this section the same as it is defined in the Mobile 36 Telecommunications Sourcing Act. All other definitions and 37 provisions of the Mobile Telecommunications Sourcing Act as 38 provided in Title 4 of the United States Code are adopted;” 39 SECTION 26. Section 12-37-220(C) of the 1976 Code is 40 amended to read: 41 “(C) Upon approval by the governing body of the county, the 42 five-year partial exemption allowed pursuant to subsections (A)(7), 43 and (B)(32), and (B)(34) is extended to an unrelated purchaser

1 [3777-24] 1 who acquires the facilities in an arms-length transaction and who 2 preserves the existing facilities and existing number of jobs. The 3 partial exemption applies for the purchaser for five years if the 4 purchaser otherwise meets the exemption requirements.” 5 SECTION 27. Section 12-54-43 of the 1976 Code, as last 6 amended by Act 399 of 2000, is further amended by adding an 7 appropriately lettered subsection to read: 8 “( ) A failure to deposit or pay taxes deducted and withheld 9 pursuant to Article 5 of Chapter 8 subjects the withholding agent 10 to a penalty of not less than ten dollars nor more than one thousand 11 dollars. The penalty imposed by this item applies to failure to 12 comply with the provisions of Section 12-54-250.” 13 SECTION 28. Section 12-54-44(C) of the 1976 Code is 14 amended to read: 15 “(C) A failure to deposit or pay taxes deducted and withheld 16 pursuant to Article 5 of Chapter 8 subjects the withholding agent 17 to a penalty of not less than ten dollars nor more than one thousand 18 dollars. The penalty imposed by this item applies to failure to 19 comply with the provisions of Section 12-54-250. Reserved “ 20 SECTION 29. Chapter 54, Title 12 of the 1976 Code is 21 amended by adding: 22 “Section 12-54-195. (A) As used in this section, ‘responsible 23 person’ includes any officer, partner, or employee of the taxpayer 24 who has a duty to pay to the department the sales tax due by the 25 taxpayer or use tax required or authorized to be collected by the 26 retailer pursuant to Chapter 36 of this title. 27 (B) If a retailer adds and collects the sales tax as permitted by 28 Section 12-36-940, or collects the use tax from the purchaser as 29 required by Section 12-36-1350, but the retailer fails to remit the 30 tax collected to the department, then any responsible person may 31 be held liable, individually and personally, for a penalty equal to 32 one hundred percent of the tax collected but not remitted to the 33 department. The tax is not collectible from the retailer to the 34 extent the penalty imposed by this subsection is collected from a 35 responsible person.” 36 SECTION 30. Section 12-54-85 of the 1976 Code, as last 37 amended by Act 399 of 2000, is further amended by adding an 38 appropriately numbered subsection at the end to read: 39 “( )(1) An individual taxpayer is ‘financially disabled’ if he is 40 unable to manage his financial affairs by reason of a medically 41 determinable physical or mental impairment that is expected to 42 result in death or that has lasted or is expected to last for a 43 continuous period of not less than twelve months. An individual

1 [3777-25] 1 taxpayer does not have that impairment for this purpose unless 2 proof of the existence of the impairment is provided to the 3 department in the form and manner the department requests. 4 (2) The running of the period of limitation provided in 5 subsection (F) is suspended during a period an individual taxpayer 6 is considered financially disabled. 7 (3) An individual taxpayer may not be treated as financially 8 disabled during a period that his spouse or another person is 9 authorized lawfully to act on his behalf in financial matters.” 10 SECTION 31. Section 12-54-85(F) of the 1976 Code is 11 amended to read: 12 “(F)(1) Except as provided in subsection (D) above, claims for 13 credit or refund must be filed within three years of from the time 14 the timely filed return, including extensions, was filed, or two 15 years from the date of payment the tax was paid, whichever is 16 later. If no return was filed, a claim for credit or refund must be 17 filed within two years from the date of payment the tax was paid. 18 A credit or refund may not be made after the expiration of the 19 period of limitation prescribed in this item for the filing of a claim 20 for credit or refund, unless the claim for credit or refund is filed by 21 the taxpayer or determined to be due by the department within that 22 period. 23 (2) If the claim was filed by the taxpayer during the 24 three-year period prescribed in item (1), the amount of the credit or 25 refund may not exceed the portion of the tax paid within the 26 period, immediately preceding the filing of the claim, equal to 27 three years plus the period of any extension of time for filing the 28 return. 29 (3) If the claim was not filed within the three-year period, 30 the amount of the credit or refund may not exceed the portion of 31 the tax paid during the two years immediately preceding the filing 32 of the claim. 33 (4) If no claim was filed, the credit or refund may not exceed 34 the amount which would be allowable under item (2) or (3), as the 35 case may be, as if a claim were filed on the date the credit or 36 refund is allowed. 37 (5) For the purposes of this subsection: 38 (a) A return filed before the last day prescribed for the 39 filing is considered as filed on the last day. Payment of any 40 portion of the tax made before the last day prescribed for the 41 payment of the tax is considered made on the last day. The last 42 day prescribed for filing the return or paying the tax must be 43 determined without regard to any extension of time.

1 [3777-26] 1 (b) Any tax actually withheld at the source in respect of 2 the recipient of income, is considered to have been paid by the 3 recipient on the last day prescribed for filing his return for the 4 taxable year, determined without regard to any extension of time 5 for filing the return, with respect to which the taxpayer would be 6 allowed a credit for the amount withheld. 7 (c) Any amount paid as estimated income tax for any 8 taxable year is considered to have been paid on the last day 9 prescribed for filing the return for the taxable year, determined 10 without regard to any extension of time for filing the return. 11 (6) In the case of an individual, the running of the period 12 specified in this subsection is suspended for a period of the 13 individual’s life during which he is financially disabled. For 14 purposes of this item, an individual is financially disabled if he is 15 unable to manage his financial affairs by reason of a medically 16 determinable physical or mental impairment that is not expected to 17 result in death or which has lasted or is expected to last for a 18 continuous period of not less than twelve months. An individual 19 must not be treated as financially disabled for a period during 20 which his spouse or another person is authorized to act on his 21 behalf in financial matters. An individual must not be considered 22 financially disabled unless the following statements are submitted 23 as part of the claim for credit or refund: 24 (a) a written statement signed by a physician qualified to 25 make the determination that provides the: 26 ( i) name and a brief description of the physical or 27 mental IMPAIRMENT; 28 ( ii) physician’s medical opinion that the physical or 29 mental IMPAIRMENT prevented the taxpayer from managing his 30 financial affairs; 31 (iii) physician’s medical opinion that the taxpayer’s 32 physical or mental impairment resulted in, or is expected to result 33 in, death, or that it has lasted, or is expected to last, for a 34 continuous period of not less than twelve months; and 35 ( iv) specific time period during which the taxpayer was 36 prevented by the physical or mental impairment from managing 37 his financial affairs, to the vest of the physician’s knowledge; and 38 (b) a written statement by the taxpayer or the person 39 signing the claim for credit or refund that the person, including the 40 taxpayer’s spouse, was not authorized to act on his behalf in 41 financial matters for the period during which he was unable to 42 manage his own financial affairs. Alternatively, if a person was 43 authorized to act on the taxpayer’s behalf in financial matters

1 [3777-27] 1 during part of that period of disability, the statement must contain 2 the beginning and ending dates of the period of time the person 3 was authorized; and 4 (c) other information the department may require. 5 The department, in its discretion, may adopt a determination 6 made by the Internal Revenue Service with respect to an 7 individual, and may follow rules issued by the Internal Revenue 8 Service or Department of Treasury with regard to interpreting 9 Internal Revenue Code section 6511(h).” 10 SECTION 32. Section 12-54-200 of the 1976 Code is 11 amended to read: 12 “Section 12-54-200. (a)(A) The department, at its discretion, 13 after notification as provided in subsection (b) of this section, may 14 require any a person subject to provisions of law administered by 15 the department, not including Section 12-35-330, to post a cash or 16 surety bond, deposit and maintain taxes due including associated 17 penalties and interest in a separate account in a bank or other 18 financial institution in this State, or both, if the person fails to file a 19 timely return or pay any a tax for as many as two tax filing periods 20 in a twelve-month period. 21 (B) The amount of the bond must be determined by the 22 department and may not be greater than three times the estimated 23 average liability each filing period of the person required to file the 24 return. A cash bond must be held by the State Treasurer, without 25 interest, as surety conditioned upon prompt payment of all taxes, 26 penalties, and interest imposed by law upon the person. 27 (C) If a person is required to maintain a separate account, he 28 must give the name of the financial institution, the account 29 number, and other information the department requires. Taxes, 30 penalties, and interest due must be withdrawn from the account by 31 preprinted, consecutively numbered checks signed by a properly 32 authorized officer, partner, manager, employee, or member of the 33 taxpayer and made payable to the department. Monies deposited 34 in the account may not be commingled with other funds. The 35 department, at its discretion, may apply Section 12 - 54 - 250, if the 36 amount due from the taxpayer is twenty thousand dollars or more. 37 (D) When any a person required to post a bond or maintain a 38 separate account, or both, complies with all requirements of law 39 and regulations for a period of twenty-four consecutive months, 40 the department shall return the bond and cancel the bonding and 41 separate account requirements. 42 (b)(E) The department shall may serve the notice required by 43 subsection (b) of this section by certified mail, or by delivery by an

1 [3777-28] 1 authorized agent of the department delivering the notice to the 2 person in hand or by leaving the notice at the person’s last or usual 3 place of abode or at his place of business or employment. For 4 corporations, partnerships, or trusts, the notice may be delivered by 5 certified mail, or by delivery by an authorized agent for of the 6 department delivering the notice to an officer, partner, or trustee in 7 hand, or by leaving the notice at the officer’s, partner’s, or 8 trustee’s last or usual place of abode or at his place of business or 9 employment. 10 (F) A person who fails to comply with this section is guilty of a 11 misdemeanor and, upon conviction, must be fined not more than 12 five hundred dollars or imprisoned not more than thirty days, or 13 both. Offenses under this section are triable in magistrate’s court. 14 These penalties are in addition to other penalties provided by law.” 15 SECTION 33. Section 12-54-227(A)(2) of the 1976 Code is 16 amended to read: 17 “(2) For purposes of this section, ‘delinquent tax claim’ means a 18 tax liability that is due and owing for a period longer than six 19 months and for which the taxpayer has been given at least three 20 notices requesting payment and for any subsequent tax debts 21 issued, one notice of which has been sent by certified or registered 22 mail. The notice sent by certified or registered mail must include 23 includes a statement that the taxpayer’s delinquency may be 24 referred to a collection agency in the taxpayer’s home state.” 25 SECTION 34. Section 12-54-240(B)(6) of the 1976 Code is 26 amended to read: 27 “(6) disclosure of a deficiency assessment to a probate court or 28 to an attorney conducting a closing, the filing of a tax lien for 29 uncollected taxes, and the issuance of a notice of levy;” 30 SECTION 35. Section 12-56-120 of the 1976 Code is 31 amended to read: 32 “Section 12-56-120. The department is and Internal Revenue 33 Service are exempt from the notice and appeal procedures of this 34 chapter. The sole and exclusive appeal procedures procedure for 35 the setoff of any a debt owed to the department is governed by the 36 provisions of Chapter 60 of Title 12 which provides the sole and 37 exclusive remedy for these procedures. The appeal procedure in 38 connection with a liability to the Internal Revenue Service is 39 governed by Title 26 of the United States Code.” 40 SECTION 36. Section 12-58-185(A) of the 1976 Code is 41 amended to read: 42 “(A) The department, in its discretion, may accept installment 43 payment for amounts due for a period not to exceed one year from

1 [3777-29] 1 the date the payment was due originally. Interest accrues during 2 the installment period, pursuant to Section 12 - 54 - 25. In addition, 3 the department may extend the time for payment of an amount due 4 it for a period not to exceed eighteen months from the date fixed 5 for the payment and, in exceptional cases, for a further period not 6 to exceed twelve months. An extension under pursuant to this 7 section may be granted only where if it is shown to the satisfaction 8 of the department that the payment of the amount due it upon the 9 date originally fixed for the payment will result in undue hardship 10 to the taxpayer.” 11 SECTION 37. Section 12-60-90(C) of the 1976 Code is 12 amended to read: 13 “(C) Taxpayers may be represented during the administrative tax 14 process by: 15 (1) the same individuals who can may represent them in 16 administrative tax proceedings with the Internal Revenue Service 17 pursuant to Section 10.3 (a), (b), and (c), Section 10.7 (a), (1) (c)(i) 18 through (4) and (7) (c)(vi), and (c)(viii), and Section 10.7 (b) (d) 19 and (c) (e) of United States Treasury Department Circular No. 230; 20 and 21 (2) a real estate appraiser who is registered, licensed, or 22 certified pursuant to Chapter 60 of Title 40 during the 23 administrative tax process in a matter limited to questions 24 concerning the valuation of real property.” 25 SECTION 38. Section 4-37-30(A)(15) of the 1976 Code, as 26 amended by Act 368 of 2000, is further amended to read: 27 “(15) The revenues of the tax collected in each county 28 pursuant to this section must be remitted to the State Treasurer and 29 credited to a fund separate and distinct from the general fund of the 30 State. After deducting the amount of refunds made and costs to the 31 Department of Revenue of administering the tax, not to exceed one 32 percent of the revenues, the State Treasurer shall distribute the 33 revenues and all interest earned on the revenues while on deposit 34 with him quarterly to the county in which the tax is imposed and 35 these revenues and interest earnings must be used only for the 36 purpose stated in the imposition ordinance. The State Treasurer 37 may correct misallocation misallocations costs or refunds by 38 adjusting later distributions, but these adjustments must be made in 39 the same fiscal year as the misallocation misallocations. However, 40 allocations made as a result of city or county code errors must be 41 corrected prospectively.” 42 SECTION 39. A.Section 6(A) of Act 588 of 1994 is amended 43 to read:

1 [3777-30] 1 “(A) The revenues of the tax collected in the county under this 2 act must be remitted to the State Treasurer and credited to a fund 3 separate and distinct from the general fund of the State. After 4 deducting the amount of refunds made and costs to the Department 5 of Revenue and Taxation of administering the tax, not to exceed 6 one percent of the revenues, the State Treasurer shall distribute the 7 revenues quarterly to the county treasurer who holds the debt 8 service funds established for payment of principal and interest on 9 the bonds to which the tax is applicable. The State Treasurer may 10 correct misallocation misallocations costs or refunds by adjusting 11 subsequent distributions, but these adjustments must be made in 12 the same fiscal year as the misallocation. However, allocations 13 made as a result of city or county code errors must be corrected 14 prospectively.” 15 B.Section 6 of Act 588 of 1994, as last amended by Act 458 of 16 1998, is further amended by adding at the end: 17 “(D) Annually, in the month of June, funds collected by the 18 Department of Revenue from the Cherokee County School District 19 1 School Bond-Property Tax Relief Act which are not identified as 20 to the governmental unit due the tax after reasonable effort by the 21 department to determine the source of collection must be 22 transferred to the State Treasurer’s Office. The State Treasurer 23 shall distribute these funds to the county treasurer in the county 24 area in which the tax is imposed and the revenues must be used 25 only for the purposes stated in the imposition resolution. The State 26 Treasurer shall calculate this supplemental distribution on a 27 proportional basis based on the current fiscal year’s county area 28 revenue collections.” 29 SECTION 40. A.Section 7A of Act 441 of 2000 is amended 30 to read: 31 “(A) The revenues of the tax collected in the county under this 32 act must be remitted to the State Treasurer and credited to a fund 33 separate and distinct from the general fund of the State. After 34 deducting the amount of refunds made and costs to the department 35 of administering the tax, not to exceed one percent of the revenues, 36 the State Treasurer shall distribute the revenues quarterly to the 37 county treasurer, who shall hold the debt service funds for 38 payment of principal and interest on the bonds to which the tax is 39 applicable. The State Treasurer may correct misallocation costs or 40 refunds misallocations by adjusting subsequent distributions, but 41 these adjustments must be made in the same fiscal year as the 42 misallocation. However, allocations made as a result of city or 43 county code errors must be corrected prospectively.”

1 [3777-31] 1 B.Section 7 of Act 441 of 2000 is amended by adding at the 2 end: 3 “(D) Annually, in the month of June, funds collected by the 4 Department of Revenue from the Chesterfield County School 5 District School Bond-Property Tax Relief Act which are not 6 identified as to the governmental unit due the tax after reasonable 7 effort by the department to determine the source of collection must 8 be transferred to the State Treasurer’s Office. The State Treasurer 9 shall distribute these funds to the county treasurer in the county 10 area in which the tax is imposed and the revenues must be used 11 only for the purposes stated in the imposition resolution. The State 12 Treasurer shall calculate this supplemental distribution on a 13 proportional basis based on the current fiscal year’s county area 14 revenue collections.” 15 SECTION 41. Section 12-4-580(D)(1) is amended to read: 16 “(1) ‘governmental entity’ means the State and any state 17 agency, board, committee, department, department, private or 18 public institution of higher learning; all political subdivisions of 19 the State; and all federal agencies, boards, and departments. 20 ‘Political subdivision’ includes the Municipal Association of South 21 Carolina and the South Carolina Association of Counties when 22 these organizations submit claims on behalf of their members.” 23 SECTION 42. Section 12-6-3360(B)(5) of the 1976 Code is 24 amended by adding a lettered subitem to read: 25 “(e) For a job created in a county that is not traversed by an 26 interstate highway, the credit allowed is one tier higher than the 27 credit for which jobs created in the county would otherwise 28 qualify. This subitem does not apply to a job created in a county 29 eligible for a higher tier pursuant to another provision of this 30 item.” 31 SECTION 43. Section 12-56-20(4) of the 1976 Code, is 32 amended by adding at the end: 33 “‘Delinquent debt’ also includes any fine, penalty, cost, fee, 34 assessment, surcharge, service charge, restitution, or other amount 35 imposed by a court or as a direct consequence of a final court order 36 which is received by or payable to the clerk of the appropriate 37 court or treasurer of the entity where the court is located.” 38 SECTION 44. Chapter 56, Title 12 of the 1976 Code is amended 39 by adding: 40 “Section 12-56-68. Debts imposed by a court or as a direct 41 consequence of a final court order are not subject to the procedures 42 in Sections 12-56-63 and 12-56-65.”

1 [3777-32] 1 SECTION 45. Chapter 43, Title 12, of the 1976 Code is 2 amended by adding: 3 “Section 12-43-285. (A) The governing body of a political 4 subdivision levying a property tax billed by the county auditor 5 must certify in writing to the county auditor that the millage rate 6 levied is in compliance with laws limiting the millage rate imposed 7 by that political subdivision. 8 (B) If a millage rate is in excess of that authorized by law, the 9 county treasurer must either issue refunds or transfer the total 10 amount in excess of that authorized by law, upon collection, to a 11 separate, segregated fund, which must be credited to taxpayers in 12 the following year. An entity submitting a millage rate in excess 13 of that authorized by law must pay the costs of implementing this 14 subsection or a pro rata share of the costs if more than one entity 15 submits the excessive millage rate.” 16 SECTION 46. Section 4-1-170 of the 1976 Code is amended to 17 read: 18 “Section 4-1-170. (A) By written agreement, counties may 19 develop jointly an industrial or business park with other counties 20 within the geographical boundaries of one or more of the member 21 counties as provided in Section 13 of Article VIII of the 22 Constitution of this State. The written agreement entered into by 23 the participating counties must include provisions which: 24 (1) address sharing expenses of the park; 25 (2) specify by percentage the revenue to be allocated to each 26 county; 27 (3) specify the manner in which revenue must be distributed 28 to each of the taxing entities within each of the participating 29 counties. 30 (B) For the purpose of bonded indebtedness limitation and for 31 the purpose of computing the index of taxpaying ability pursuant 32 to Section 59-20-20(3), allocation of the assessed value of property 33 within the park to the participating counties and to each of the 34 taxing entities within the participating counties must be identical to 35 the allocation of revenue received and retained by each of the 36 counties and by each of the taxing entities within the participating 37 counties. Misallocations may be corrected by adjusting later 38 distributions, but these adjustments must be made in the same 39 fiscal year as the misallocations. Provided, however, that the 40 computation of bonded indebtedness limitation is subject to the 41 requirements of Section 4-29-68(E). 42 (C) If the industrial or business park encompasses all or a 43 portion of a municipality, the counties must obtain the consent of

1 [3777-33] 1 the municipality prior to the creation of the multi-county industrial 2 park.” 3 SECTION 47. Section 12-44-80 of the 1976 Code is amended 4 by adding: 5 “(C) Misallocations of the distribution of the fee payments on 6 the project pursuant to this chapter may be corrected by adjusting 7 later distributions, but these adjustments must be made in the same 8 fiscal year as the misallocations.” 9 SECTION 48. Section 4-12-30(K) of the 1976 Code is amended 10 by adding: 11 “(4) Misallocations of the distribution of the fee-in-lieu of taxes 12 on the project to this chapter may be corrected by adjusting later 13 distributions, but these adjustments must be made in the same 14 fiscal year as the misallocations.” 15 SECTION 49. Section 12-39-250(B) of the 1976 Code is 16 amended to read: 17 “(B) Notwithstanding any other provision of law, the county tax 18 assessor or the County Board of Assessment Appeals, upon 19 application of the taxpayer, must order the county auditor to make 20 appropriate adjustments in the valuation and assessment of any 21 owner - occupied real property and improvements which have 22 sustained damage as a result of fire provided that the application 23 for correction of the assessment is made prior to before payment of 24 the tax.” 25 SECTION 50. Section 12-51-90(B) of the 1976 Code, as last 26 amended by Act 334 of 2000, is further amended to read: 27 “(B) The lump sum amount of interest is due on the whole 28 amount of the delinquent tax sale based on the month during the 29 redemption period the property is redeemed and that rate relates 30 back to the beginning of the redemption period according to the 31 following schedule: 32 Month of Redemption PeriodAmount of Interest Imposed 33 Property Redeemed 34 First three months three percent of the bid amount 35 Months four, five, and six six percent of the bid amount 36 Months seven, eight, and nine nine percent of the bid amount 37 Last three months twelve percent of the bid 38 amount 39 However, in every redemption, the amount of interest due must 40 not exceed the amount of the bid on the property submitted on 41 behalf of the forfeited land commission pursuant to Section 42 12-51-55.”

1 [3777-34] 1 SECTION 51. A.Chapter 45 of Title 12 of the 1976 Code is 2 amended by adding: 3 “Section 12-45-65. For purposes of collection of taxes on a 4 hotel, rooming house, apartment, or timeshare unit rented or leased 5 as a furnished unit, the estate includes both the real estate and the 6 personal property it contains. The real property tax notice on the 7 estate must describe the real estate, including a tax map number, 8 and also include an identifiable description and value of the 9 personal property it contains.” 10 B.Section 12-49-40 of the 1976 Code is amended to read: 11 “Section 12-49-40. (A) All personal property subject to taxation 12 shall be is liable to distress and sale for the payment of taxes, in 13 the manner provided in this title, and all real property returned 14 delinquent by the county treasurer upon which the taxes shall are 15 not be paid by distress or otherwise shall must be seized and sold 16 as provided in this title. The distress and sale of personal property 17 shall is not be a condition precedent to seizure and sale of any real 18 property under this title. 19 (B) For purposes of collection and enforcement of taxes on a 20 hotel, rooming house, apartment, or timeshare unit rented or leased 21 as a furnished unit, the estate includes both the real estate and the 22 personal property it contains. The estate must be seized and sold 23 as undivided real property as provided in this title for the sale to 24 collect delinquent taxes on real property.” 25 C.Section 12-51-50 of the 1976 Code, as last amended by Act 26 399 of 2000, is further amended to read: 27 “Section 12-51-50. The property duly advertised must be sold, 28 by the person officially charged with the collection of delinquent 29 taxes, at public auction at the courthouse or other convenient place 30 within the county, if designated and advertised, on a legal sales 31 date during regular hours for legal tender payable in full by cash, 32 cashier’s check, certified check, or money order on the date of the 33 sale. If the defaulting taxpayer or the grantee of record of the 34 property has more than one item advertised to be sold, as soon as 35 sufficient funds have been accrued to cover all of the delinquent 36 taxes, assessments, penalties, and costs, further items may not be 37 sold; except that hotel, rooming house, apartment, or timeshare 38 unit rented or lease as a furnished unit is deemed to be both the 39 real estate and the personal property it contains. It must be sold as 40 undivided real property.” 41 D.Chapter 37, Title 12 of the 1976 Code is amended by adding: 42 “Section 12-37-805. As an alternative to the procedures 43 described in Section 12-37-760, if the owner of a hotel, rooming

1 [3777-35] 1 house, apartment, or timeshare unit rented or leased as a furnished 2 unit fails to list, in any one year, personal property required by law 3 to be listed, the auditor may return a statement of the personal 4 property with the value being that of twice the average value of the 5 reported personal property contained within similar units in the 6 county.” 7 SECTION 52. The repeal or amendment by this act of any 8 law, whether temporary or permanent or civil or criminal, does not 9 affect pending actions, rights, duties, or liabilities founded thereon, 10 or alter, discharge, release or extinguish any penalty, forfeiture, or 11 liability incurred under the repealed or amended law, unless the 12 repealed or amended provision shall so expressly provide. After 13 the effective date of this act, all laws repealed or amended by this 14 act must be taken and treated as remaining in full force and effect 15 for the purpose of sustaining any pending or vested right, civil 16 action, special proceeding, criminal prosecution, or appeal existing 17 as of the effective date of this act, and for the enforcement of 18 rights, duties, penalties, forfeitures, and liabilities as they stood 19 under the repealed or amended laws. 20 SECTION 53. If any section, subsection, paragraph, 21 subparagraph, sentence, clause, phrase, or word of this act is for 22 any reason held to be unconstitutional or invalid, such holding 23 shall not affect the constitutionality or validity of the remaining 24 portions of this act, the General Assembly hereby declaring that it 25 would have passed these sections, and each and every section, 26 subsection, paragraph, subparagraph, sentence, clause, phrase, and 27 word thereof, irrespective of the fact that any one or more other 28 sections, subsections, paragraphs, subparagraphs, sentences, 29 clauses, phrases, or words hereof may be declared to be 30 unconstitutional, invalid, or otherwise ineffective. 31 SECTION 54. SECTIONS 1, 7, 10, 11, 12, and 13 of this act 32 take effect July 1, 2001. SECTIONS 22, 23, 24, 25, and 26 take 33 effect on the first day of the second month following approval by 34 the Governor. The remaining SECTIONS of this act take effect 35 upon approval by the Governor, and SECTIONS 2, 3, 4, 5, 6, 8, 9, 36 14, and 15 apply to taxable years beginning after December 31, 37 2000, SECTION 31 applies to tax periods beginning after 38 December 31, 1997, SECTION 45 applies to property tax years 39 beginning after December 31, 1999, and SECTION 51 applies 40 beginning after December 31, 2001. / 41 Renumber sections to conform. 42 Amend totals and title to conform. 43

1 [3777-36] 1 ROBERT W. HARRELL, JR. for Committee. 2 3 4 STATEMENT OF ESTIMATED FISCAL IMPACT 5 REVENUE IMPACT 1/ 6 This bill is expected to reduce general fund corporation license 7 tax revenue an estimated $26,750 in FY2001-02. 8 Explanation 9 This bill clarifies language, makes technical changes (inserts 10 omitted references and deletes obsolete sections) to existing 11 language or updates administrative procedures. The following 12 sections of the bill are expected to have a revenue impact in 13 FY2001-02. 14 Section 2. This section would conform to the Internal Revenue 15 Service (IRS) treatment of a “qualified subchapter ‘S’ subsidiary” 16 as not being a separate tax entity. A “qualified subchapter ‘S’ 17 subsidiary” is a “C” corporation with subsidiaries that issue at least 18 eighty percent of stock in the entire organization. The IRS does not 19 require separate accounting for the “C” corporations. Payment of a 20 corporation license fee by a “C” corporation under this 21 arrangement would no longer be required. According to the 22 Department of Revenue, this section is expected reduce 23 corporation license fee revenue an estimated $1,750 from one “C” 24 corporation in FY2001-02. 25 Section 17. This section would delete the requirement that 26 homeowner associations must file a tax return and remit a 27 corporation license tax. This section would make homeowners 28 associations either a non-profit organization or a charitable 29 organization. According to records with the Secretary of State and 30 the Department of Revenue, there are an estimated 2,000 31 homeowners associations in the state. Currently, an estimated one- 32 half are remitting a corporate license tax. Multiplying 1,000 33 homeowners associations by the minimum corporate license fee of 34 $25 yields an estimated reduction of $25,000 in General Fund 35 corporate license fees in FY2001-02. 36 37 Approved By: 38 William C. Gillespie 39 Board of Economic Advisors 40 41 1/ This statement meets the requirement of Section 2-7-71 for a state revenue 42 impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an 43 estimate of the shift in local property tax incidence.

1 [3777-37] 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND CHAPTER 10, TITLE 12, CODE OF LAWS OF 12 SOUTH CAROLINA, 1976, RELATING TO THE ENTERPRISE 13 ZONE ACT, BY ADDING SECTION 12-10-95 SO AS TO 14 PROVIDE FOR A WITHHOLDING CREDIT FOR 15 RETRAINING OF A PRODUCTION OR TECHNOLOGY 16 EMPLOYEE; TO AMEND SECTION 12-2-25, RELATING TO 17 TREATMENT OF A SINGLE-MEMBER LIABILITY 18 COMPANY AND A GRANTOR TRUST FOR PURPOSES OF 19 SOUTH CAROLINA INCOME TAX, SO AS TO INCLUDE A 20 “QUALIFIED SUBCHAPTER ‘S’ SUBSIDIARY” AS AN 21 ENTITY THAT IS NOT REGARDED SEPARATELY FROM 22 ITS OWNER OR GRANTOR; TO AMEND SECTIONS 12-6-40, 23 AS AMENDED, AND 12-6-50, BOTH RELATING TO 24 APPLICATION AND ADOPTION OF THE FEDERAL 25 INTERNAL REVENUE CODE TO STATE TAX LAWS, SO AS 26 TO CLARIFY THE MEANINGS OF CERTAIN TERMS IN THE 27 APPLICATION OF THE PROVISIONS AND TO EXCLUDE 28 ADDITIONAL PROVISIONS CONCERNING THE TAXATION 29 OF FOREIGN INCOME; TO AMEND SECTION 12-6-2210, 30 RELATING TO MEASUREMENT OF THE ENTIRE NET 31 INCOME OF A TAXPAYER, SO AS TO MAKE TECHNICAL 32 CHANGES; TO AMEND SECTION 12-6-3330, RELATING TO 33 THE DEFINITION OF “SOUTH CAROLINA EARNED 34 INCOME” FOR PURPOSES OF THE TWO WAGE EARNER 35 CREDIT, SO AS TO REFINE CITATIONS TO THE INTERNAL 36 REVENUE CODE; TO AMEND SECTION 12-6-3410, 37 RELATING TO DEFINITIONS FOR PURPOSES OF THE 38 CORPORATE INCOME TAX CREDIT FOR CORPORATE 39 HEADQUARTERS, SO AS TO INCLUDE INFORMATION 40 TECHNOLOGY AS A HEADQUARTERS-RELATED 41 FUNCTION; TO AMEND SECTION 12-6-3500, RELATING TO 42 RETIREMENT PLAN TAX CREDITS, SO AS TO DETERMINE

1 [3777] 1 1 THE TAXPAYER’S LIFE EXPECTANCY FROM THE TIME 2 HE FIRST CLAIMS THE RETIREMENT INCOME 3 DEDUCTION; TO AMEND SECTION 12-6-3520, RELATING 4 TO INCOME TAX CREDIT FOR HABITAT CONSTRUCTION, 5 MAINTENANCE, AND MANAGEMENT, SO AS TO MAKE A 6 TECHNICAL CLARIFICATION BY CROSS-REFERENCING 7 SPECIFIC SECTIONS IMPOSING TAX LIABILITY AND TO 8 ALLOW THE CREDIT TO A MEMBER OF A LIMITED 9 LIABILITY COMPANY TAXED AS A PARTNERSHIP; TO 10 AMEND SECTIONS 12-10-30, 12-10-50, 12-10-80, AND 11 12-10-81, ALL AS AMENDED AND ALL RELATING TO THE 12 ENTERPRISE ZONE ACT, SO AS TO CONFORM ITS 13 PROVISIONS TO INCLUDE A JOB DEVELOPMENT CREDIT 14 FOR THE TRAINING OR RETRAINING OF AN 15 INFORMATION TECHNOLOGY EMPLOYEE, TO INCLUDE 16 TECHNOLOGY INTENSIVE FACILITIES AS QUALIFYING 17 BUSINESSES, TO ADJUST THE HOURLY WAGE RANGES 18 FOR DETERMINING THE JOB CREDIT PERCENTAGE, TO 19 PROVIDE FOR PENALTIES FOR FAILURE TO TIMELY PAY 20 TAXES, TO PROVIDE FOR INDEPENDENT 21 CERTIFICATIONS OF SATISFACTION OF REQUIREMENTS, 22 AND TO EFFECT TECHNICAL CHANGES; TO AMEND 23 SECTION 12-13-20, RELATING TO THE DEFINITION OF 24 “NET INCOME” FOR PURPOSES OF INCOME TAX 25 PAYABLE BY A BUILDING AND LOAN ASSOCIATION, SO 26 AS TO UPDATE CROSS-REFERENCES; TO AMEND 27 SECTION 12-13-60, RELATING TO THE APPLICABILITY 28 AND ADOPTION OF APPROPRIATE ENFORCEMENT AND 29 ADMINISTRATION PROVISIONS OF TAX LAW TO 30 TAXATION OF BUILDING AND LOAN ASSOCIATIONS, SO 31 AS TO UPDATE CROSS-REFERENCES AND MAKE OTHER 32 TECHNICAL CHANGES; TO AMEND SECTION 12-20-90, 33 RELATING TO THE CORPORATION LICENSE FEE FOR A 34 HOLDING COMPANY, SO AS TO INSERT “INSURER” IN 35 DISTINGUISHING BETWEEN THE HOLDING COMPANY 36 AND THE SUBSIDIARY FOR PURPOSES OF CALCULATING 37 THE AMOUNT OF THE FEE; TO AMEND SECTION 38 12-20-110, RELATING TO INAPPLICABILITY OF THE 39 PROVISIONS FOR CORPORATION LICENSE FEES TO 40 CERTAIN ORGANIZATIONS, COMPANIES, AND 41 ASSOCIATIONS, SO AS TO MAKE THE PROVISIONS 42 INAPPLICABLE TO A HOMEOWNERS’ ASSOCIATION AND 43 TO MAKE TECHNICAL CHANGES; TO AMEND SECTION

1 [3777] 2 1 12-28-530, RELATING TO INCREASE IN TAX RATES ON 2 MOTOR FUEL, SO AS TO INCLUDE MOTOR FUEL HELD IN 3 REGISTERED AND NONREGISTERED TANKS; TO AMEND 4 SECTION 12-28-985, RELATING TO FLOORSTOCKS TAX 5 REPORT AND PAYMENT, SO AS TO PROVIDE FOR THE 6 DEPARTMENT TO DETERMINE THE DUE DATE; TO 7 AMEND SECTION 12-28-1135, RELATING TO THE FUEL 8 VENDOR LICENSE AND FEE, SO AS TO REQUIRE THE 9 PURCHASER FROM A TERMINAL SUPPLIER TO BE 10 LICENSED; TO AMEND SECTION 12-28-1730, RELATING 11 TO MONTHLY REPORTS FROM FUEL TRANSPORTERS, SO 12 AS TO IMPOSE A CIVIL PENALTY FOR FAILURE TO 13 INCLUDE CERTAIN INFORMATION; TO AMEND SECTION 14 12-36-90, RELATING TO DEFINITIONS OF “GROSS 15 PROCEEDS OF SALE” FOR PURPOSES OF THE SALES AND 16 USE TAX, SO AS TO CHANGE THE TAX PAID ON AN 17 UNCOLLECTIBLE DEBT TO A DEDUCTION INSTEAD OF A 18 CREDIT; TO AMEND SECTION 12-36-130, AS AMENDED, 19 RELATING TO DEFINITION OF “SALES PRICE” FOR SALES 20 TAX PURPOSES, SO AS TO EXCLUDE AN AMOUNT 21 ACTUALLY CHARGED OFF AS UNCOLLECTIBLE; TO 22 AMEND SECTION 12-36-910, RELATING TO IMPOSITION 23 OF THE SALES TAX, SO AS TO REQUIRE THE SOURCING 24 OF MOBILE TELECOMMUNICATIONS SERVICES 25 CHARGES SUBJECT TO THE SALES TAX; TO AMEND 26 SECTION 12-36-940, RELATING TO AMOUNTS ADDED TO 27 THE SALES PRICE AS A RESULT OF THE STATE SALES 28 TAX, SO AS TO CLARIFY THE RANGE OF SUMS AND TO 29 PROVIDE FOR THE AMOUNTS WHICH MAY BE ADDED 30 TO THE SALES PRICE FOR PURPOSES OF THE STATE 31 SALES TAX ON ACCOMMODATIONS AND COMBINED 32 STATE SALES TAX AND LOCAL TAX FOR COUNTIES 33 IMPOSING A LOCAL TAX; TO AMEND SECTION 34 12-36-1310, RELATING TO IMPOSITION OF THE USE TAX, 35 SO AS TO REQUIRE THE SOURCING OF MOBILE 36 TELECOMMUNICATIONS SERVICES WITH CHARGES 37 SUBJECT TO THE USE TAX; TO AMEND SECTION 38 12-37-220, AS AMENDED, RELATING TO EXEMPTIONS 39 FROM AD VALOREM TAXATION, SO AS TO INCLUDE A 40 CROSS REFERENCE; TO AMEND SECTION 12-37-930, AS 41 AMENDED, RELATING TO VALUATION OF PROPERTY 42 FOR PURPOSES OF ASSESSMENT OF TAXES, SO AS TO 43 PROVIDE THAT THE DEPARTMENT OF REVENUE

1 [3777] 3 1 DESIGNATE THE BOOK OF VEHICLE VALUATIONS FOR 2 PURPOSES OF ESTABLISHING THE VALUATIONS, TO 3 REDUCE THE MAXIMUM VALUATION FROM 4 NINETY-FIVE PERCENT TO EIGHTY-FIVE PERCENT OF 5 THE SUGGESTED RETAIL PRICE OF A NEW VEHICLE, 6 WATERCRAFT, OR PERSONAL AIRCRAFT, AND TO 7 REQUIRE A TEN PERCENT REDUCTION OF THE 8 PREVIOUS YEAR’S VALUE IN SUBSEQUENT YEARS; TO 9 AMEND SECTION 12-37-2640, RELATING TO 10 DETERMINATION OF THE ASSESSED VALUE OF A 11 MOTOR VEHICLE BY THE COUNTY AUDITOR, SO AS TO 12 REQUIRE THE USE OF THE NATIONALLY RECOGNIZED 13 PUBLICATION OF VEHICLE VALUATIONS AS 14 DESIGNATED BY THE DEPARTMENT, TO PROVIDE A 15 LIMITED ALTERNATIVE, AND TO ESTABLISH A 16 MINIMUM AND MAXIMUM ASSESSED VALUE FOR A 17 MOTORCYCLE BASED ON ITS MODEL YEAR; TO AMEND 18 SECTION 12-37-2680, RELATING TO THE TIME FOR 19 DETERMINATION OF THE ASSESSED VALUE OF A 20 VEHICLE, SO AS TO DELETE THE REQUIREMENT THAT 21 THE DEPARTMENT PUBLISH A VEHICLE VALUATION 22 GUIDE; TO AMEND SECTION 12-54-43, AS AMENDED, 23 RELATING TO CIVIL PENALTIES APPLICABLE TO TAX 24 AND REVENUE LAW, AND SECTION 12-54-44, RELATING 25 TO CRIMINAL PENALTIES APPLICABLE TO TAX AND 26 REVENUE LAW, SO AS TO DELETE THE CRIMINAL 27 PENALTY FOR FAILURE TO DEPOSIT OR PAY TAXES 28 DEDUCTED AND WITHHELD FOR PAYMENT AND TO 29 PROVIDE A CIVIL PENALTY; TO AMEND CHAPTER 54, 30 TITLE 12, RELATING TO COLLECTION AND 31 ENFORCEMENT OF TAXATION, BY ADDING SECTION 32 12-54-195 SO AS TO PROVIDE FOR A PENALTY ASSESSED 33 AGAINST A PERSON WHO IS RESPONSIBLE FOR 34 REMITTING, BUT FAILS TO REMIT, SALES TAX TO THE 35 DEPARTMENT OF REVENUE; TO AMEND SECTION 36 12-54-85, AS AMENDED, RELATING TO TIME 37 LIMITATIONS AND EXCEPTIONS FOR ASSESSMENT OF 38 TAXES AND FEES, SO AS TO PROVIDE FOR SUSPENSION 39 OF THE RUNNING OF THE STATUTE OF LIMITATIONS 40 WHILE AN INDIVIDUAL TAXPAYER IS CONSIDERED 41 “FINANCIALLY DISABLED” AND TO DEFINE THAT TERM; 42 TO AMEND SECTION 12-54-200, RELATING TO THE 43 REQUIREMENT OF A BOND TO SECURE PAYMENT OF

1 [3777] 4 1 TAXES, SO AS TO PROVIDE THE ALTERNATIVE AND 2 ADDITIONAL SECURITY OF DEPOSIT AND 3 MAINTENANCE OF TAXES DUE IN A SEPARATE 4 ACCOUNT, TO DELETE THE REQUIREMENT OF NOTICE 5 BY CERTIFIED MAIL, AND TO PROVIDE THAT 6 NONCOMPLIANCE IS A MISDEMEANOR TRIABLE IN 7 MAGISTRATE’S COURT; TO AMEND SECTION 12-54-227, 8 AS AMENDED, RELATING TO OUT-OF-STATE 9 COLLECTIONS, SO AS TO DELETE THE REQUIREMENT OF 10 NOTICE BY CERTIFIED MAIL; TO AMEND SECTION 11 12-54-240, AS AMENDED, RELATING TO PROHIBITION OF 12 DISCLOSURE OF RECORDS AND REPORTS AND RETURNS 13 FILED WITH THE DEPARTMENT, SO AS TO ALLOW AN 14 EXCEPTION FOR DISCLOSURE OF A DEFICIENCY 15 ASSESSMENT TO AN ATTORNEY CONDUCTING A 16 CLOSING; TO AMEND SECTION 12-56-120, RELATING TO 17 APPEALS FROM THE SETOFF DEBT COLLECTION ACT, SO 18 AS TO PROVIDE THAT THE DEPARTMENT AND THE 19 INTERNAL REVENUE SERVICE ARE EXEMPT AND ARE 20 SUBJECT EXCLUSIVELY TO OTHER APPEAL 21 PROCEDURES; TO AMEND SECTION 12-58-185, RELATING 22 TO EXTENSIONS OF PAYMENT PERIODS, SO AS TO 23 DELETE PRESCRIBED EXTENSION PERIODS; TO AMEND 24 SECTION 12-60-90, RELATING TO THE ADMINISTRATIVE 25 TAX PROCESS FOR PURPOSES OF THE REVENUE 26 PROCEDURES ACT, SO AS TO UPDATE CITATIONS TO 27 THE INTERNAL REVENUE CODE; TO AMEND SECTION 28 4-37-30, AS AMENDED, RELATING TO SALES AND USE 29 TAXES OR TOLLS AS REVENUE FOR TRANSPORTATION 30 FACILITIES, SO AS TO CLARIFY “MISALLOCATIONS” FOR 31 PURPOSES OF ADJUSTING LATER DISTRIBUTIONS; AND 32 TO AMEND ACT 588 OF 1994, RELATING TO THE 33 CHEROKEE COUNTY SCHOOL DISTRICT 1 SCHOOL 34 BOND-PROPERTY TAX RELIEF ACT AND ACT 441 OF 2000, 35 RELATING TO THE CHESTERFIELD COUNTY SCHOOL 36 DISTRICT SCHOOL BOND-PROPERTY TAX RELIEF ACT, 37 BOTH SO AS TO CLARIFY THE METHOD AND TIMING OF 38 THE CORRECTION OF MISALLOCATION OF SALES TAX 39 REVENUES BY THE STATE TREASURER AND TO 40 PROVIDE FOR THE DISTRIBUTION OF SALES TAX 41 REVENUES UNDER THE ACT WHEN THE DEPARTMENT 42 OF REVENUE IS UNABLE TO IDENTIFY THE SOURCE OF 43 THE REVENUES.

1 [3777] 5 1 2 Be it enacted by the General Assembly of the State of South 3 Carolina: 4 5 SECTION 1. Chapter 10, Title 12 of the 1976 Code is amended 6 by adding: 7 8 “Section 12-10-95. (A) Subject to the conditions in this section, 9 a business engaged in manufacturing or processing operations or 10 technology intensive activities at a manufacturing, processing, or 11 technology intensive facility as defined in Section 12-6-3360(M) 12 and that meets the requirements of Section 12-10-50(B) may 13 negotiate with the council to claim as a credit against withholding 14 five hundred dollars a year for the retraining of a production or 15 technology employee if retraining is necessary for the qualifying 16 business to remain competitive or to introduce new technologies. 17 In addition to the yearly limits, the retraining credit claimed 18 against withholding may not exceed two thousand dollars over five 19 consecutive years for each retrained production or technology 20 employee. 21 (B) A qualifying business is eligible to claim as a retraining 22 credit against withholding the lower amount of the following: 23 (1) the retraining credit for the applicable withholding period 24 as determined by subsection (A); or 25 (2) withholding paid to the State for the applicable 26 withholding period. 27 (C) All retraining must be approved by a technical college 28 under the jurisdiction of the State Board for Technical and 29 Comprehensive Education. A qualifying business must submit a 30 retraining program for approval by the appropriate technical 31 college. The approving technical college may provide the 32 retraining itself, subject to the retraining program, or contract with 33 other training entities to provide the required retraining. 34 (D) Travel and lodging expenses and wages for retraining 35 participants are not reimbursable. 36 (E) The qualifying business must match on a dollar-for-dollar 37 basis the amount claimed as a credit against withholding for 38 retraining. When applicable, the total amount of retraining credits 39 and matching funds must be paid to the technical college that 40 provides the training. All training costs, including costs in excess 41 of the retraining credits and matching funds, are the responsibility 42 of the business.

1 [3777] 6 1 (F) A qualifying business claiming retraining credits pursuant 2 to this section is subject to the reporting and audit requirements in 3 Section 12-10-80(A). 4 (G) A qualifying business may not claim retraining credit for 5 training provided to the following production or technology 6 employees: 7 (a) temporary or contract employees; and 8 (b) employees who are subject to a revitalization agreement, 9 including a preliminary revitalization agreement.” 10 11 SECTION 2. Section 12-2-25 of the 1976 Code is amended to 12 read: 13 14 “Section 12-2-25. (A) As used in this title and unless 15 otherwise required by the context: 16 (1) ‘partnership’ includes a limited liability company taxed 17 for South Carolina income tax purposes as a partnership.; 18 (2) ‘partner’ includes any a member of a limited liability 19 company taxed for South Carolina income tax purposes as a 20 partnership.; 21 (3) ‘corporation’ includes a limited liability company or 22 professional or other association taxed for South Carolina income 23 tax purposes as a corporation.; and 24 (4) ‘shareholder’ includes any a member of a limited 25 liability company taxed for South Carolina income tax purposes as 26 a corporation. 27 (B) Single-member limited liability companies which are not 28 taxed for South Carolina income tax purposes as a corporation, and 29 grantor trusts, to the extent they are grantor trusts, will be ignored 30 for all South Carolina tax purposes. For South Carolina tax 31 purposes: 32 (1) a single - member limited liability company, which is not 33 taxed for South Carolina income tax purposes as a corporation, is 34 not regarded as an entity separate from its owner; 35 (2) a ‘qualified subchapter ‘S’ subsidiary’, as defined in 36 Section 1361(b)(3)(B) of the Internal Revenue Code, is not 37 regarded as an entity separate from the ‘S’ corporation that owns 38 the stock of the qualified subchapter ‘S’ subsidiary; and 39 (3) a grantor trust, to the extent that it is a grantor trust, is 40 not regarded as an entity separate from its grantor. 41 (C) For purposes of this section, the Internal Revenue Code 42 reference is as provided in Section 12 - 6 - 40(A).” 43

1 [3777] 7 1 SECTION 3. Section 12-6-40 of the 1976 Code, as last amended 2 by Section 7, Part II, Act 387 of 2000, is further amended to read: 3 4 “Section 12-6-40. (A)(1) ‘Internal Revenue Code’ means the 5 Internal Revenue Code of 1986 as amended through December 31, 6 1999 2000, and includes the effective date provisions contained 7 therein in it. 8 (2)(a) For purposes of this title, ‘Internal Revenue Code’ is 9 deemed to contain all changes necessary for the State to administer 10 its provisions. Unless a different meaning is required: 11 ( i) ‘Secretary’, ‘Secretary of the Treasury’, or 12 ‘Commissioner’ means the Director of the Department of 13 Revenue. 14 ( ii) ‘Internal Revenue Service’ means the department. 15 (iii) ‘Return’ means the appropriate state return. 16 ( iv) ‘Income’ includes the modifications required by 17 Article 9 of this chapter and allocation and apportionment as 18 provided in Article 17 of this chapter. 19 Other terms in the Internal Revenue Code must be given the 20 meanings necessary to effectuate this item. 21 (b) For purposes of Internal Revenue Code Sections 67 22 (Two Percent Floor on Miscellaneous Itemized Deductions), 71 23 (Alimony and Separate Maintenance Payments), 85 24 (Unemployment Compensation), 165 (Losses), 170 (Charitable 25 Contributions), 213 (Medical and Dental Expenses), 219 26 (Retirement Savings), 469 (Passive Activity Losses and Credits 27 Limited), and 631 (Gain or Loss in the Case of Timber, Coal, or 28 Domestic Iron Ore), ‘Adjusted Gross Income’ for South Carolina 29 income tax purposes means a taxpayer’s adjusted gross income for 30 federal income tax purposes without regard to the adjustments 31 required by Article 9 and Article 17 of this chapter. 32 (c) For a taxpayer utilizing the provisions of Internal 33 Revenue Code Section 1341 (Computation of Tax where Taxpayer 34 Restores Substantial Amount Held under Claim of Right) for 35 South Carolina tax purposes the phrase ‘taxes imposed by this 36 chapter’ means taxes imposed by Chapter 6 of this title. 37 (d) The terms defined in Internal Revenue Code Sections 38 7701, 7702, and 7703 have the same meaning for South Carolina 39 income tax purposes, unless a different meaning is clearly 40 required. 41 (B) All elections made for federal income tax purposes in 42 connection with Internal Revenue Code Sections adopted by this 43 State automatically apply for South Carolina income tax purposes

1 [3777] 8 1 unless otherwise provided. A taxpayer may not make an election 2 solely for South Carolina income tax purposes except for elections 3 not applicable for federal purposes, including filing a combined or 4 composite return as provided in Sections 12-6-5020 and 5 12-6-5030, respectively. 6 (C) For purposes of Internal Revenue Code Sections 67 (Two 7 Percent Floor on Miscellaneous Itemized Deductions), 71 8 (Alimony and Separate Maintenance Payments), 85 9 (Unemployment Compensation), 165 (Losses), 170 (Charitable 10 Contributions), 213 (Medical and Dental Expenses), 219 11 (Retirement Savings), 469 (Passive Activity Losses and Credits 12 Limited), and 631 (Gain or Loss in the Case of Timber, Coal, or 13 Domestic Iron Ore), “Adjusted Gross Income” for South Carolina 14 income tax purposes means a taxpayer’s adjusted gross income for 15 federal income tax purposes without regard to the adjustments 16 required by Article 9 and Article 17 of this chapter. 17 (D) For a taxpayer utilizing the provisions of Internal Revenue 18 Code Section 1341 (Computation of Tax where Taxpayer Restores 19 Substantial Amount Held under Claim of Right) for South 20 Carolina tax purposes the phrase “taxes imposed by this chapter” 21 means taxes imposed by Chapter 6 of this title. 22 (E) The terms defined in Internal Revenue Code Sections 7701, 23 7702, and 7703 have the same meaning for South Carolina income 24 tax purposes, unless a different meaning is clearly required. 25 (F)(C) If a taxpayer complies with the provisions of Internal 26 Revenue Code Section 367 (Foreign Corporations), it is not 27 necessary for the taxpayer to obtain the approval of the 28 department. The taxpayer shall attach a copy of the approval 29 received from the Internal Revenue Service to its next South 30 Carolina income tax return.” 31 32 SECTION 4. Section 12-6-50(11) of the 1976 Code is amended to 33 read: 34 35 “(11) Sections 861 through 908, 912, and 931 through 940, and 36 944 through 989 relating to the taxation of foreign income;” 37 38 SECTION 5. Section 12-6-2210(A) of the 1976 Code is amended 39 to read: 40 41 “(A) If the entire business of a taxpayer is transacted or 42 conducted within this State, the income tax as provided in this 43 chapter is measured by the entire net income of the taxpayer for

1 [3777] 9 1 the taxable year. The entire business of the taxpayer is transacted 2 and or conducted within the State if the taxpayer is not subject to a 3 net income tax or a franchise tax measured by net income in 4 another state, the District of Columbia, a territory or possession of 5 the United States, or a foreign country, or and would not be subject 6 to a net income tax in another such taxing jurisdiction if the other 7 taxing jurisdiction adopted the net income tax laws of this State.” 8 9 SECTION 6. Section 12-6-3330(C)(2) of the 1976 Code is 10 amended to read: 11 12 “(2) The term ‘South Carolina earned income’ means income 13 which that is earned income within the meaning of Internal 14 Revenue Code Section 911(d)(2) or 401(c)(2)(C) which and is 15 taxable in this State, except that: 16 (a) it does not include an amount: 17 ( i) received from a retirement plan or an annuity; 18 ( ii) paid or distributed from an individual retirement plan 19 as defined in Internal Revenue Code Section 7701(a)(37); 20 (iii) received as deferred compensation; or 21 ( iv) received for services performed by an individual 22 employed by his spouse within the meaning of Internal Revenue 23 Code Section 3121(b)(3)(A)(B) as amended through December 31, 24 1987; and 25 (b) Internal Revenue Code Section 911(d)(2)(B) must be 26 applied without regard to the phrase ‘not in excess of thirty percent 27 of his share of net profits of such trade or business’.” 28 29 SECTION 7. Section 12-6-3410(J)(1) and (4) are amended to 30 read: 31 32 (1) ‘Corporate headquarters’ means the facility or portion of a 33 facility where corporate staff employees are physically employed, 34 and where the majority of the company’s financial, personnel, 35 legal, planning, information technology, or other headquarters 36 related functions are handled either on a regional or national basis. 37 A corporate headquarters must be a regional corporate 38 headquarters or a national corporate headquarters as defined 39 below: 40 (a) National corporate headquarters must be the sole 41 corporate headquarters in the nation and handle headquarters 42 related functions on a national basis. A national headquarters shall 43 be deemed to handle headquarters related functions on a national

1 [3777] 10 1 basis from this State if the corporation has a facility in this State 2 from which the corporation engages in interstate commerce by 3 providing goods or services for customers outside of this State in 4 return for compensation. 5 (b) Regional corporate headquarters must be the sole 6 corporate headquarters within the region and must handle 7 headquarters related functions on a regional basis. For purposes of 8 this section, ‘region’ or ‘regional’ means a geographic area 9 comprised of either: 10 ( i) at least five states, including this State, or 11 (ii) two or more states, including this State, if the entire 12 business operations of the corporation are performed within fewer 13 than five states. 14 15 (4) ‘Headquarters related functions and services’ are those 16 functions involving financial, personnel, administrative, legal, 17 planning, information technology, or similar business functions.” 18 19 SECTION 8. Section 12-6-3500 of the 1976 Code is amended to 20 read: 21 22 “Section 12-6-3500. If the right to receive retirement income 23 by a taxpayer allowed the deduction pursuant to Section 12-6-1170 24 was earned by the taxpayer while residing in another state which 25 imposed state income tax on the employee’s contributions, a credit 26 is allowed against the taxpayer’s South Carolina income tax 27 liability in an amount sufficient to offset the taxes paid the other 28 state. This credit must be claimed over the taxpayer’s lifetime. The 29 department shall prescribe the amount of the annual credit based 30 on the taxpayer’s life expectancy at the time of the election made 31 pursuant to the taxpayer first claims the retirement income 32 deduction pursuant to Section 12-6-1170, and may require the 33 documentation it determines necessary to verify the amount of 34 income tax paid the other state on the contributions. Regardless of 35 the tax rates applicable on the contributions in the other state, the 36 total of the credit allowed may not exceed an amount determined 37 by multiplying the contributions taxed in each year by the marginal 38 South Carolina individual income tax rate for that year.” 39 40 SECTION 9. Section 12-6-3520 of the 1976 Code is amended to 41 read: 42

1 [3777] 11 1 “Section 12-6-3520. (A) There shall be is allowed as a tax 2 credit against the income tax liability of a taxpayer an amount 3 equal to fifty percent of the costs incurred by the taxpayer for 4 habitat management or construction and maintenance of 5 improvements on real property that are made to land as described 6 in Section 50-15-55(A) and which meets meet the requirements of 7 regulations promulgated by the Department of Natural Resources 8 pursuant to Section 50-15-55(A). For purposes of this section, 9 ‘costs incurred’ means those monies spent or revenue foregone for 10 habitat management or construction and maintenance, but does not 11 include revenue foregone as increases in land values or speculative 12 costs related to development. 13 (B) All costs must be incurred on land that has been designated 14 as a certified management area for endangered species enumerated 15 in Section 50-15-40 or for nongame and wildlife species 16 determined to be in need management under Section 50-15-30. 17 (C) The tax credit allowed by this section must be claimed in 18 the year that such the costs, as provided in subsection (B), are 19 incurred as provided for in subsection (B). The This credit 20 established by this section taken in one year may not exceed fifty 21 percent of the taxpayer’s income tax liability due pursuant to 22 Section 12 - 6 - 510 or 12 - 6 - 530 for that year. If the amount of the 23 credit exceeds the taxpayer’s income tax liability for that taxable 24 year, the taxpayer may carry forward any the excess for up to ten 25 years. 26 (D) If during any taxable year the landowner voluntarily 27 chooses to leave the agreement made concerning the certified areas 28 during any taxable year after taking the tax credit, then the 29 taxpayer’s tax liability for the current taxable year must be 30 increased by the full amount of any credit claimed in prior 31 previous years with respect to the property. 32 (E)(1) An ‘S’ corporation, limited liability company, or 33 partnership that qualifies for the credit under pursuant to this 34 section as an ‘S’ corporation or partnership entitles may pass 35 through the credit earned to each shareholder of the ‘S’ 36 corporation, member of the limited liability company, or partner of 37 the partnership to a nonrefundable credit against taxes. Any credit 38 generated by an ‘S’ corporation must first be used against any tax 39 liability of the ‘S’ corporation under Section 12-6-530. Any 40 remaining credit passes through to the shareholders of the ‘S’ 41 corporation. 42 (2) The amount of the credit allowed a shareholder, member, 43 or partner, or owner of a limited liability company pursuant to this

1 [3777] 12 1 section is equal to the shareholder’s percentage of stock 2 ownership, the member’s interest in the limited liability company, 3 or the partner’s interest in the partnership, for the taxable year, 4 multiplied by the amount of the credit that the taxpayer would 5 have been entitled to if it were taxed as a corporation earned by the 6 entity. Credit earned by an ‘S’ corporation owing corporate level 7 income tax must be used first at the entity level. Only the 8 remaining credit passes through to the shareholders of the ‘S’ 9 corporation. 10 (3) For purposes of this subsection, ‘limited liability 11 company’ means a limited liability company taxed like a 12 partnership.” 13 14 SECTION 10. Section 12-10-30 of the 1976 Code, as last 15 amended by Act 399 of 2000, is further amended to read: 16 17 Section 12-10-30. As used in this chapter: 18 (1) ‘Council’ means the Advisory Coordinating Council for 19 Economic Development. 20 (2) ‘Department’ means the South Carolina Department of 21 Revenue. 22 (3) ‘Employee’ means an employee of the qualifying business 23 who works full time within the enterprise zone at the project. 24 (4) ‘Gross wages’ means wages subject to withholding. 25 (5) ‘Job development credit’ means the amount a qualifying 26 business may claim as a credit against employee withholding 27 pursuant to Sections 12-10-80 and 12-10-81 and a revitalization 28 agreement. 29 (6) ‘New job’ means a job created or reinstated as defined in 30 Section 12-6-3360(M)(3). 31 (7) ‘Qualifying business’ means a business that meets the 32 requirements of Section 12-10-50 and other applicable 33 requirements of this chapter and, where required pursuant to 34 Section 12-10-50, enters into a revitalization agreement with the 35 council to undertake a project pursuant to the provisions of this 36 chapter. 37 (8) ‘Project’ means an investment for one or more purposes 38 pursuant to this chapter needed for a qualifying business to locate, 39 remain, or expand in this State and otherwise fulfill the 40 requirements of this chapter. 41 (9) ‘Preliminary revitalization agreement’ means the 42 application by the qualifying business for benefits pursuant to 43 Section 12-10-80 or 12 - 10 - 81 if the council approves the

1 [3777] 13 1 application and agrees in writing at the time of approval to allow 2 the approved application to serve as the preliminary revitalization 3 agreement. The date of the preliminary revitalization agreement is 4 the date of the council approval. 5 (10) ‘Revitalization agreement’ means an executed agreement 6 entered into between the council and a qualifying business that 7 describes the project and the negotiated terms and conditions for a 8 business to qualify for a job development credit pursuant to 9 Section 12-10-80 or 12-10-81. 10 (11) ‘Qualifying expenditures’ means those expenditures that 11 meet the requirements of Section 12-10-80(C) or 12-10-81(D). 12 (12) ‘Withholding’ means employee withholding pursuant to 13 Chapter 8 of this title. 14 (13) ‘Technology employee’ means an employee whose job 15 qualifies for jobs tax credit pursuant to at a technology intensive 16 facility as defined in Section 12-6-3360(M)(14) who is directly 17 engaged in technology intensive activities at that facility. 18 (14) ‘Production employee’ means an employee directly 19 engaged in manufacturing or processing at a manufacturing or 20 processing facility as defined in Section 12 - 6 - 3360(M). 21 (15) ‘Retraining agreement’ means an agreement entered into 22 between a business and the council in which a qualifying business 23 is entitled to retraining credit pursuant to Section 12 - 10 - 95. 24 (16) ‘Retraining credit’ means the amount that a business may 25 claim as a credit against withholding pursuant to Section 12 - 10 - 95 26 and the retraining agreement. 27 (17) ‘Technology intensive activities’ means the design, 28 development, and introduction of new products or innovative 29 manufacturing processes, or both, through the systematic 30 application of scientific and technical knowledge at a technology 31 intensive facility as defined in Section 12 - 6 - 3360(M).” 32 33 SECTION 11. Section 12-10-50 of the 1976 Code, as last 34 amended by Act 399 of 2000, is further amended to read: 35 36 “Section 12-10-50. (A) To qualify for the benefits provided in 37 this chapter, a business must be located within this State and must: 38 (1) be engaged primarily in a business of the type identified in 39 Section 12-6-3360; 40 (2) provide a benefits package, including health care, to 41 full-time employees at the project; 42 (3) enter into a revitalization agreement that is approved by the 43 council and that describes a minimum job requirement and

1 [3777] 14 1 minimum capital investment requirement for the project as 2 provided in Section 12-10-90, except that a revitalization 3 agreement is not required for a qualifying business with respect to 4 Section 12-10-80(D); and 5 (4) have negotiated incentives that council has determined are 6 appropriate for the project, and the council shall certify that: 7 (a) the total benefits of the project exceed the costs to the 8 public; and 9 (b) the business otherwise fulfills the requirements of this 10 chapter. 11 (B) To qualify for benefits pursuant to Section 12 - 10 - 95, a 12 business must: 13 (1) be engaged in manufacturing or processing operations or 14 technology intensive activities at a manufacturing, processing, or 15 technology intensive facility as defined in Section 12 - 6 - 3360(M); 16 (2) provide a benefits package, including health care, to 17 employees being retrained; and 18 (3) enter into a retraining agreement with the council.” 19 20 SECTION 12. Section 12-10-80 of the 1976 Code, as last 21 amended by Act 399 of 2000, is further amended to read: 22 23 “Section 12-10-80. (A) A business that qualifies pursuant to 24 Section 12-10-50(A) and has submitted independently audited 25 proof to the council that the business has met the minimum job 26 requirement and minimum capital investment provided for in the 27 revitalization agreement may claim job development credits as 28 determined by this section. 29 (1) A business may claim job development credits against its 30 withholding on its quarterly state withholding tax return for the 31 amount of job development credits allowable pursuant to this 32 section. 33 (2) A business that is current with respect to its withholding 34 tax and other tax due and owing the State and that has maintained 35 its minimum employment and investment levels identified in the 36 revitalization agreement may claim the credit on a quarterly basis 37 beginning with the first quarter after the council’s certification to 38 the department that the minimum employment and capital 39 investment levels were met for the entire quarter. If a qualifying 40 business is not current as to all taxes due and owing to the State as 41 of the date of the return on which the credit would be claimed, 42 without regard to extensions, the business is barred from claiming 43 the credit that would otherwise be allowed for that quarter.

1 [3777] 15 1 (3) A qualifying business may receive claim its initial job 2 development credit only after the council has certified to the 3 department that the qualifying business has met the required 4 minimum employment and capital investment levels. 5 (4) To be eligible to apply to the council to claim a job 6 development credit, a qualifying business shall create at least ten 7 new, full-time jobs, as defined in Section 12-6-3360(M), at the 8 project described in the revitalization agreement within five years 9 of the effective date of the agreement. 10 (5) A qualifying business is eligible to claim a job 11 development credit pursuant to the revitalization agreement for not 12 more than fifteen years. 13 (6) To the extent any return of an overpayment of 14 withholding that results from claiming job development credits is 15 not used as permitted by subsection (C) or (D) by Section 16 12 - 10 - 95, it must be treated as misappropriated employee 17 withholding. 18 (7) Except as provided in subsection (D), Job development 19 credits may not be claimed for purposes of this section with regard 20 to an employee whose job was created in this State before the 21 taxable year of the qualifying business in which it enters into a 22 preliminary revitalization agreement. 23 (8) If a qualifying business claims job development credits 24 pursuant to this section, it shall make its payroll books and records 25 available for inspection by the council and the department at the 26 times the council and the department request. Each qualifying 27 business claiming job development credits pursuant to this section 28 shall file with the council and the department the information and 29 documentation requested by the council or department respecting 30 employee withholding, the job development credit, and the use of 31 any overpayment of withholding resulting from the claiming of a 32 job development credit according to the revitalization agreement. 33 (9) Each qualifying business claiming in excess of ten 34 thousand dollars in a calendar year must furnish an audited report 35 prepared by an independent certified public accountant that 36 itemizes the sources and uses of the funds. The audited report must 37 be filed with the council and the department no later than June 38 thirtieth following the calendar year in which the job development 39 credits are claimed, except when a qualifying business obtains the 40 written approval by the council for an extension of that date. 41 Extensions may be granted only for good cause shown. The 42 department shall impose a penalty pursuant to Section 12 - 54 - 210

1 [3777] 16 1 for all reports filed after June thirtieth or the approved extension 2 date, whichever is later. 3 (10) Each qualifying business claiming ten thousand dollars 4 or less in any calendar year must furnish a report prepared by the 5 company that itemizes the sources and uses of the funds. This 6 report must be filed with the council and the department no later 7 than June thirtieth following the calendar year in which the job 8 development credits are claimed, except when a qualifying 9 business obtains the written approval by the council for an 10 extension of that date. Extensions may be granted only for good 11 cause shown. The department shall impose a penalty pursuant to 12 Section 12 - 54 - 210 for all reports filed after June thirtieth or the 13 approved extension date, whichever is later. 14 (11) An employer may not claim an amount that results in an 15 employee’s receiving a smaller amount of wages on either a 16 weekly or on an annual basis than the employee would receive 17 otherwise in the absence of this chapter. 18 (B)(1) The maximum job development credit a qualifying 19 business may claim for new employees is limited to the lesser of 20 withholding tax paid to the State on a quarterly basis or the sum of 21 the following amounts: 22 (a) two percent of the gross wages of each new employee 23 who earns 6.74 dollars $6.95 or more an hour but less than 8.99 24 dollars $9.27 an hour; 25 (b) three percent of the gross wages of each new 26 employee who earns 8.99 dollars 9.27 or more an hour but less 27 than 11.23 dollars $11.58 an hour; 28 (c) four percent of the gross wages of each new employee 29 who earns 11.23 dollars $11.58 or more an hour but less than 30 16.85 dollars $17.38 an hour; and 31 (d) five percent of the gross wages of each new employee 32 who earns 16.85 dollars $17.38 or more an hour. 33 (2) The hourly gross wage figures in item (1) must be 34 adjusted annually by an inflation factor determined by the State 35 Budget and Control Board. The amount that may be claimed by a 36 qualifying business is limited by subsection (C) and the 37 revitalization agreement. The council may approve a waiver of 38 ninety-five percent of the limits pursuant to subsection (C) for 39 qualifying businesses making a significant capital investment as 40 defined in Section 4-12-30(D)(4) or Section 4-29-67(D)(4). 41 (C) To claim a job development credit, the qualifying business 42 must incur qualified expenditures at the project or for utility or

1 [3777] 17 1 transportation improvements that serve the project. To be 2 qualified, the expenditures must be: 3 (1) incurred during the term of the revitalization agreement, 4 including a preliminary revitalization agreement, or within sixty 5 days before the execution of a revitalization agreement, including a 6 preliminary revitalization agreement council’s receipt of an 7 application for benefits pursuant to this section; 8 (2) authorized by the revitalization agreement; and 9 (3) used for any of the following purposes: 10 (a) training costs and facilities; 11 (b) acquiring and improving real estate whether 12 constructed or acquired by purchase, or in cases approved by the 13 council, acquired by lease or otherwise; 14 (c) improvements to both public and private utility 15 systems including water, sewer, electricity, natural gas, and 16 telecommunications; 17 (d) fixed transportation facilities including highway, rail, 18 water, and air; 19 (e) construction or improvements of real property and 20 fixtures constructed or improved primarily for the purpose of 21 complying with local, state, or federal environmental laws or 22 regulations; 23 (f) employee relocation expenses associated with new or 24 expanded technology intensive facilities as defined in Section 25 12-6-3360(M)(14); 26 (g) financing the costs of a purpose described in items (a) 27 through (f). 28 (D)(1) The amount of job development credits a qualifying 29 business may claim for its use for qualifying expenditures is 30 limited according to the designation of the county as defined in 31 Section 12-6-3360(B) as follows: 32 (1)(a) one hundred percent of the maximum job 33 development credits may be claimed by businesses located in 34 counties designated as ‘least developed’; 35 (2)(b) eighty-five percent of the maximum job 36 development credits may be claimed by businesses located in 37 counties designated as ‘underdeveloped’; 38 (3)(c) seventy percent of the maximum job development 39 credits may be claimed by businesses located in counties 40 designated as ‘moderately developed’; or 41 (4)(d) fifty-five percent of the maximum job development 42 credits may be claimed by businesses located in counties 43 designated as ‘developed’.

1 [3777] 18 1 (2) The amount that may be claimed as a job development 2 credit by a qualifying business is limited by this subsection and by 3 the revitalization agreement. The council may approve a waiver of 4 ninety - five percent of the limits provided in item (1) for a 5 qualifying business making a significant capital investment as 6 defined in Section 4 - 12 - 30(D)(4), 4 - 29 - 67(D)(4), or 12 - 44 - 30(8). 7 (3) The county designation of the county in which the 8 project is located at the time the qualifying business enters into a 9 preliminary revitalization agreement with the council remains in 10 effect for the entire period of the revitalization agreement, except 11 as to additional jobs created pursuant to an amendment to a 12 revitalization agreement entered into before June 1, 1997, as 13 provided in Section 12-10-60. In that case the county designation 14 on the date of the amendment remains in effect for the remaining 15 period of the revitalization agreement as to any additional jobs 16 created after the effective date of the amendment. This item does 17 not apply to a business whose application for job development fees 18 or credits pursuant to Section 12-10-81 has been approved by 19 council before the effective date of this act. 20 (E) The council shall certify to the department the maximum 21 job development credit for each qualifying business. After 22 receiving certification, the department shall remit an amount equal 23 to the difference between the maximum job development credit 24 and the job development credit actually claimed to the State Rural 25 Infrastructure Fund as defined and provided in Section 12-10-85. 26 (D)Subject to the conditions in this section, a qualifying 27 business in this State may negotiate with the council to claim a job 28 development credit for retraining according to the procedure in 29 subsection (A) in an amount equal to five hundred dollars a year 30 for each production and technology employee being retrained, 31 where this retraining is necessary for the qualifying business to 32 remain competitive or to introduce new technologies. This 33 retraining must be approved and performed by the appropriate 34 technical college under the jurisdiction of the State Board for 35 Technical and Comprehensive Education. The technical college 36 may provide the retraining program delivery directly or contract 37 with other training entities to accomplish the required training 38 outcomes. In addition to the yearly limits, the amount claimed as a 39 job development credit for retraining may not exceed two thousand 40 dollars over five years for each production employee being 41 retrained. Additionally, the qualifying business must match on a 42 dollar-for-dollar basis the amount claimed as a job development 43 credit for retraining. The total amount claimed as job development

1 [3777] 19 1 credits for retraining and all of the matching funds of the 2 qualifying business must be paid to the technical college that 3 provides the training to defray the cost of the training program. 4 Training cost in excess of the job development credits for 5 retraining and matching funds is the responsibility of the 6 qualifying business based on negotiations with the technical 7 college. 8 (E)(F) Any job development credit of a qualifying business 9 permanently lapses upon expiration or termination of the 10 revitalization agreement. If an employee is terminated, the 11 qualifying business immediately must cease to claim job 12 development credits as to that employee. 13 (F) The statute of limitations provided by Section 12-54-85 is 14 suspended until the end of the five-year period described in item 15 (4) of subsection (A) with respect to state withholding taxes 16 pursuant to this section for a business subject to this section. 17 (G) For purposes of the job development credit allowed by this 18 section, an employee is a person whose job was created in this 19 State. 20 (H) Job development credits may not be claimed by a 21 governmental employer who employs persons at a closed or 22 realigned military installation as defined in Section 12-10-88(E).” 23 24 SECTION 13. Section 12-10-81 of the 1976 Code, as last 25 amended by Act 399 of 2000, is further amended to read: 26 27 “Section 12-10-81. (A) A business may claim a job 28 development credit as determined by this section if the: 29 (1) council approves the use of this section for the business; 30 (2) business qualifies pursuant to Section 12-10-50; and 31 (3) business is a tire manufacturer that has more than four 32 hundred twenty-five million dollars in capital invested in this State 33 and employs more than one thousand employees in this State and 34 that commits within a period of five years from the date of a 35 revitalization agreement, to invest an additional three hundred fifty 36 million dollars and create an additional three hundred fifty jobs in 37 this State qualifying for job development fees or credits pursuant 38 to current or future revitalization agreements; except that the 39 business must submit independently audited proof to the council 40 that the business has satisfied all minimum capital investment and 41 job requirements identified in the revitalization agreements but not 42 certified by the council to the department before July 1, 2001. The 43 council, in its discretion, may extend the five-year period for two

1 [3777] 20 1 additional years if the business has made a commitment to the 2 additional three hundred fifty million dollars and makes substantial 3 progress toward satisfying the goal before the end of the initial 4 five-year period. A business that represents to the council its intent 5 to qualify pursuant to this section and is approved by the council 6 may put job development fees computed pursuant to this section 7 into an escrow account until the date the business satisfies provides 8 independently audited proof to the council that the business has 9 satisfied the capital and job requirements of this section. 10 (B)(1) A business qualifying pursuant to this section may claim 11 its job development credit against its withholding on its quarterly 12 state withholding tax return for the amount of job development 13 credit allowable pursuant to this section for not more than fifteen 14 years. Job development credits allowed pursuant to subsection (C) 15 (1)(a) through (d) of this section apply only to withholding on jobs 16 created pursuant to a revitalization agreement adopted pursuant to 17 this section and to the amounts withheld on wages and salaries on 18 those jobs. 19 (2) A business that is current with respect to its withholding 20 tax as well as any other tax due and owing the State and that has 21 maintained its minimum employment and investment levels 22 identified in the revitalization agreement may claim the credit on a 23 quarterly basis beginning with the quarter subsequent to the 24 council’s certification to the department that the minimum 25 employment and capital investment levels have been met for the 26 entire quarter. If a qualifying business is not current as to all taxes 27 due and owing to the State as of the date of the return on which the 28 credit would be claimed, without regard to extensions, the business 29 is barred from claiming the credit that would otherwise be allowed 30 for that quarter. 31 (3) To be eligible to apply to the council to claim a job 32 development credit pursuant to this section, a qualifying business 33 must create at least ten new, full-time jobs as defined in Section 34 12-6-3360(M) at the project or projects described in the 35 revitalization agreement. 36 (4) To the extent a return of an overpayment of withholding 37 that results from claiming job development credits is not used as 38 permitted by subsection (D), it must be treated as misappropriated 39 employee withholding. 40 (5) Job development credits may not be claimed for 41 purposes of this section with regard to an employee whose job was 42 created in this State before the taxable year the qualifying business 43 enters into a preliminary revitalization agreement.

1 [3777] 21 1 (6) If a qualifying business claims job development credits 2 pursuant to this section, it must make its payroll books and records 3 available for inspection by the council and the department at the 4 times the council and the department request. Each qualifying 5 business claiming job development credits pursuant to this section 6 must file with the council and the department the information and 7 documentation they request respecting employee withholding, the 8 job development credit, and the use of overpayment of withholding 9 resulting from the claiming of a job development credit according 10 to the revitalization agreement. 11 (7) Each qualifying business must furnish an audited report 12 prepared by an independent certified public accountant that 13 itemizes the sources and uses of the funds. The audited report must 14 be filed with the council and the department no later than June 15 thirtieth following the calendar year in which the job development 16 credits are claimed, except when a qualifying business obtains 17 written approval of council for an extension of that date. 18 Extensions may be granted for good cause shown. The department 19 shall impose a penalty pursuant to Section 12 - 54 - 210 for all 20 reports filed after June thirtieth or the approved extension date, 21 whichever is later. 22 (8) An employer may not claim an amount that results in an 23 employee’s receiving a smaller amount of wages on either a 24 weekly or on an annual basis than the employee would otherwise 25 receive in the absence of this chapter. 26 (C)(1) The maximum job development credit a qualifying 27 business may claim for new employees is determined by the sum 28 of the following amounts: 29 (a) two percent of the gross wages of each new employee 30 who earns $6.74 $6.95 or more an hour but less than $8.99 $9.27 31 an hour; 32 (b) three percent of the gross wages of each new 33 employee who earns $8.99 $9.27 or more an hour but less than 34 $11.23 $11.58 an hour; 35 (c) four percent of the gross wages of each new employee 36 who earns $11.23 $11.58 or more an hour but less than $16.85 37 $17.38 an hour; 38 (d) five percent of the gross wages of each new employee 39 who earns $16.85 $17.38 or more an hour; and 40 (e) the increase in the state sales and use tax of the 41 business from the year of the effective date of its revitalization 42 agreement pursuant to this section and subsequent years, over its

1 [3777] 22 1 state sales and use tax for the first of the three years preceding the 2 effective date of this revitalization agreement. 3 (2) The hourly base wages in item (1) must be adjusted 4 annually by the inflation factor determined by the State Budget and 5 Control Board. The amount that may be claimed by a qualifying 6 business is limited by subsection (E) and the negotiated terms of 7 the revitalization agreement. The business may proceed by using 8 either the job development fee escrow procedure available 9 pursuant to revitalization agreements with effective dates before 10 1997, or the job development credit, or a combination of the two. 11 For a business qualifying pursuant to this section, the council also 12 may approve or waive sections of a revitalization agreement and 13 the council’s rules as needed, in the council’s discretion, to assist 14 the business. 15 (D) To claim a job development credit, the qualifying business 16 must incur expenditures at the project or for utility or 17 transportation improvements that serve the project. To be 18 qualified, the expenditures must be: 19 (1) incurred during the term of the revitalization agreement, 20 including a preliminary revitalization agreement, or within sixty 21 days before council’s receipt of an application for benefits 22 pursuant to this section; 23 (2) authorized by the revitalization agreement; and 24 (3) used to reimburse the business for: 25 (a) training costs and facilities; 26 (b) acquiring and improving real estate whether 27 constructed or acquired by purchase, or in cases approved by the 28 council, acquired by lease or otherwise; 29 (c) improvements to both public and private utility 30 systems including water, sewer, electricity, natural gas, and 31 telecommunication; 32 (d) fixed transportation facilities including highway, rail, 33 water, and air; or 34 (e) construction or improvements of real property and 35 fixtures constructed or improved primarily for the purpose of 36 complying with local, state, or federal environmental laws or 37 regulations. 38 (E)(1) For purposes of subsection (C)(1)(a) through (d), the 39 amount of job development credits a qualifying business may 40 claim for its use for qualifying expenditures is limited according to 41 the designation of the county as defined in Section 12-6-3360(B) 42 as follows:

1 [3777] 23 1 (a) one hundred percent of the maximum job development 2 credits may be claimed by businesses located in counties 3 designated as ‘least developed’; 4 (b) eighty-five percent of the maximum job development 5 credits may be claimed by businesses located in counties 6 designated as ‘underdeveloped’; 7 (c) seventy percent of the maximum job development 8 credits may be claimed by businesses located in counties 9 designated as ‘moderately developed’; or 10 (d) fifty-five percent of the maximum job development 11 credits may be claimed by businesses located in counties 12 designated as ‘developed’. 13 (2) For purposes of this subsection, the county designation 14 of the county in which the project is located at the time the 15 qualifying business enters into a preliminary revitalization 16 agreement with the council remains in effect for the entire period 17 of the revitalization agreement. 18 (3) The amount claimed by a qualifying business is limited 19 by this subsection and the terms of the revitalization agreements. 20 The business may use either the job development escrow 21 procedure pursuant to revitalization agreements with effective 22 dates before 1997 or the job development credit, or a combination 23 of the two. For a business qualifying pursuant to this section, the 24 council also may approve or waive sections of a revitalization 25 agreement and rules of the council, in the council’s discretion, to 26 assist the business. 27 (4) The council shall certify to the department the maximum 28 job development credit for each qualifying business. After 29 receiving certification, the department shall remit an amount equal 30 to the difference between the maximum job development credit 31 and the job development credit actually claimed to the State Rural 32 Infrastructure Fund as defined and provided in Section 12-10-85. 33 (F) A job development credit of a qualifying business 34 permanently lapses upon expiration or termination of the 35 revitalization agreement. If an employee is terminated, the 36 qualifying business immediately must cease to claim job 37 development credits as to that employee. 38 (G) The statute of limitations provided by Section 12-54-85 is 39 suspended until the end of the five-year or seven-year period 40 described in item (3) of subsection (A) with respect to state 41 withholding taxes pursuant to this section for a business subject to 42 this section.

1 [3777] 24 1 (H) For purposes of the job development credit allowed by this 2 section, an employee is a person whose job was created in this 3 State.” 4 5 SECTION 14. Section 12-13-20 of the 1976 Code is amended to 6 read: 7 8 “Section 12-13-20. The term ‘net income’, as used in this 9 chapter, means taxable income as determined for a regular 10 corporation in Chapter 7 6 of this title after deducting all earnings 11 accrued, paid, credited, or set aside for the benefit of holders of 12 savings or investment accounts, any additions to reserves which 13 are required by law, regulation, or direction of appropriate 14 supervisory agencies, and a bad debt deduction. The bad debt 15 deduction allowable for South Carolina income tax purposes is the 16 amount determined under the Internal Revenue Code and the 17 applicable regulations as amended through December 31, 1986 as 18 defined in Section 12 - 6 - 40. No deductions from income are 19 allowed for any additions to undivided profits or surplus accounts 20 other than herein required, and for the purposes of this chapter, a 21 state-organized association is allowed the same deductions for bad 22 debt reserves as those allowed to federally organized associations. 23 Associations shall maintain the bad debt reserves allowed as a 24 deduction pursuant to this section in accordance with the 25 provisions of the Internal Revenue Code as amended through 26 December 31, 1986, as defined in Section 12 - 6 - 40 and shall keep a 27 permanent record. These provisions are controlling 28 notwithstanding any other provision of law.” 29 30 SECTION 15. Section 12-13-60 of the 1976 Code is amended to 31 read: 32 33 “Section 12-13-60. For the purpose of administration, 34 enforcement, collection, liens, penalties, and other similar 35 provisions, all of the provisions of Chapter 7 6 of this title that may 36 be are appropriate or applicable are adopted and made a part of this 37 chapter, including the requirement to make declarations 38 requirements of declaration and payment of estimated tax and 39 make estimated tax payments.” 40 41 SECTION 16. Section 12-20-90 of the 1976 Code is amended to 42 read: 43

1 [3777] 25 1 “Section 12-20-90. The amount of the license fee required by 2 Section 12-20-50 for a bank holding company, insurance holding 3 company system, and savings and loan holding company must be 4 measured by the capital stock and paid-in surplus of the holding 5 company exclusive of the capital stock and paid-in surplus of a 6 bank, insurer, or savings and loan association that is a subsidiary 7 of the holding company. For the purposes of this section, ‘bank’, 8 ‘bank holding company’, and ‘subsidiary’ of a bank holding 9 company have the same definitions as in Section 34-24-20; 10 ‘insurer’, ‘insurance holding company system’, and a ‘subsidiary’ 11 of an insurance holding company system have the same definitions 12 as in Section 38-21-10; and savings and loan ‘association’, 13 ‘savings and loan holding company’, and a ‘subsidiary’ of a 14 savings and loan company have the same definitions as in Section 15 34-28-300.” 16 17 SECTION 17. Section 12-20-110 of the 1976 Code is amended 18 to read: 19 20 “Section 12-20-110. The provisions of this chapter do not 21 apply to any: 22 (1) nonprofit corporation organized under Article 1 of pursuant 23 to Chapter 31 or 33 of Title 33 and exempt from income taxes 24 pursuant to Section 501 of the Internal Revenue Code of 1986; 25 (2) volunteer fire department and rescue squad; 26 (3) cooperative organized under Chapter 45 or 47 of pursuant 27 to Title 33; 28 (4) bank, building and loan association, or credit union doing a 29 strictly mutual business; 30 (5) insurance company or association including any a fraternal, 31 beneficial, or mutual protection insurance company; or 32 (6) foreign corporation whose entire income is not included in 33 excluded from gross income for federal income tax purposes due 34 to any a treaty obligation of the United States; or 35 (7) homeowners’ association within the meaning of Internal 36 Revenue Code Section 528(c)(1).” 37 38 SECTION 18. Section 12-28-530 of the 1976 Code is amended 39 to read: 40 41 “Section 12-28-530. (A) The tax imposed by Section 42 12-28-310 on the date of an increase in the tax rate set out in that 43 section is applicable to previously taxed taxable motor fuel:

1 [3777] 26 1 (1) in excess of one thousand gallons held in storage by an 2 end user and held in a storage tank required to be registered by the 3 South Carolina Department of Health and Environmental Control; 4 (2) inventory held for sale by a fuel vendor in excess of one 5 thousand gallons and held in an end user storage tank not 6 registered with the South Carolina Department of Health and 7 Environmental Control which is identified by an agent of the 8 department at the time of an audit of inspection. 9 (B) The tax imposed by Section 12-28-310 is applicable to 10 nonexempt inventory held by a person outside of the bulk transfer 11 system in this State in quantities which, in the aggregate with 12 respect to the person, exceed one thousand gallons, to the extent 13 the inventory previously has not been subject to the tax imposed 14 by this State under the predecessor motor fuel tax statute. 15 However, no tax is payable with respect to taxable motor fuel 16 which is dyed diesel fuel or held by an exempt user including 17 government entities described under Sections 12-28-710(A)(6) and 18 12-28-710(A)(12). Reserved 19 (C) Persons in possession of taxable motor fuel subject to this 20 section shall perform the following: 21 (1) take an inventory to determine the gallons in storage for 22 purposes of determining the tax on inventory; 23 (2) deduct the amount of taxable motor fuel in dead storage; 24 (3) deduct these gallons in which tax at the full rate 25 previously has been paid; Reserved 26 (4) take a deduction for gallons of dyed diesel fuel included 27 in item (1) above, if appropriate; 28 (5) report the gallons listed in item (1) on forms provided by 29 the department. 30 (D) The amount of the inventory tax is equal to the inventory 31 tax rate times the gallons in storage as determined under 32 subsection (B). The inventory tax rate is equal to the difference 33 between the increased tax rate minus the previous tax rate to which 34 those gallons were previously subjected to tax. 35 (E) Payment of this floorstock tax must be made in conformity 36 with Section 12-28-985. 37 (F) The department shall use storage tank information obtained 38 from the South Carolina Department of Health and Environmental 39 Control to determine persons in possession of taxable motor fuel in 40 excess of one thousand gallons subject to the provisions of this 41 section.” 42

1 [3777] 27 1 SECTION 19. Section 12-28-985 of the 1976 Code is amended 2 to read: 3 4 “Section 12-28-985. The floorstocks tax report required by 5 Section 12-28-530(A) (e) must be accompanied by payment of the 6 floorstocks tax calculated in accordance with Section 7 12-28-530(B) (D). The due date of the report must be determined 8 by the department. Payment must be made on or before the due 9 date of that report. The floorstocks tax imposed on inventory held 10 outside of the bulk transfer system on the effective date of this 11 chapter reportable under Section 12-28-530(A) is payable in two 12 equal annual installments beginning twelve months after the 13 effective date of the act. However, a person may pay the full 14 amount due with a timely filed return and may take a fifteen 15 percent discount.” 16 17 SECTION 20. Section 12-28-1135(A) of the 1976 Code is 18 amended to read: 19 20 “(A) Each person who engages in the business of selling taxable 21 motor fuel at wholesale or retail or storing or distributing 22 purchases taxable motor fuel for resale within this State from a 23 licensed terminal supplier first shall obtain a fuel vendor license 24 which is operative for all locations controlled or operated by that 25 licensee in this State or in any other state from which the person 26 removes fuel for delivery and use in South Carolina.” 27 28 SECTION 21. A.Section 12-28-1730(E) of the 1976 Code is 29 amended to read: 30 31 “(E) The department may impose a civil penalty against every 32 terminal operator who wilfully fails to meet shipping paper 33 issuance requirements under Sections 12-28-920, 12-28-1500, and 34 12-28-1575 or files a return without the supporting schedules as 35 required by the department pursuant to Sections 12 - 28 - 1330 and 36 12 - 28 - 1340. The civil penalty imposed on the terminal operator is 37 the same as the civil penalty imposed under subsection (B).” 38 39 B.Section 12-28-1730 of the 1976 Code is amended by adding: 40 41 “(H) If a person liable for the tax files a return without providing 42 all information required by the department, there is added to the 43 tax the amount provided in Section 12 - 54 - 43(C)(1).”

1 [3777] 28 1 2 SECTION 22. Section 12-36-90(2)(h) of the 1976 Code is 3 amended to read: 4 5 “(h) the sales price, not including sales tax, of property on sales 6 which are actually charged off as bad debts or uncollectible 7 accounts for state income tax purposes. A taxpayer who pays the 8 tax on the unpaid balance of an account which has been found to 9 be worthless and is actually charged off for state income tax 10 purposes may take credit for the tax paid a deduction for the sales 11 price charged off as a bad debt or uncollectible account on a return 12 filed pursuant to this chapter, except that if an amount charged off 13 is later paid in whole or in part to the taxpayer, the amount paid 14 must be included in the first return filed after the collection and the 15 tax paid. The deduction allowed by this provision must be taken 16 within one year of the month the amount was determined to be a 17 bad debt or uncollectible account.” 18 19 SECTION 23. Section 12-36-130 of the 1976 Code, as last 20 amended by Section 2, Act 283 of 2000, is further amended by 21 adding a paragraph at the end to read: 22 23 “The term ‘sales price’ as defined in this section, also does not 24 include the sales price, not including tax, of property on sales 25 which are actually charged off as bad debts or uncollectible 26 accounts for state income tax purposes. A taxpayer who pays the 27 tax on the unpaid balance of an account which has been found to 28 be worthless and is actually charged off for state income tax 29 purposes may take a deduction for the sales price charged of as a 30 bad debt or uncollectible account on a return filed pursuant to this 31 chapter, except that if an amount charged off is later paid in whole 32 or in part to the taxpayer, the amount paid must be included in the 33 first return filed after the collection and the tax paid. The 34 deduction allowed by this paragraph must be taken within one year 35 of the month the amount was determined to be a bad debt or 36 uncollectible account.” 37 38 SECTION 24. Section 12-36-910(B)(3) of the 1976 Code is 39 amended to read: 40 41 “(3) gross proceeds accruing or proceeding from the charges for 42 the ways or means for the transmission of the voice or messages, 43 including the charges for use of equipment furnished by the seller

1 [3777] 29 1 or supplier of the ways or means for the transmission of the voice 2 or messages. Charges for mobile telecommunications services 3 subject to the tax under this item must be sourced in accordance 4 with the Mobile Telecommunications Sourcing Act as provided in 5 Title 4 of the United States Code. The term ‘charges for mobile 6 telecommunications services’ is defined for purposes of this 7 section the same as it is defined in the Mobile Telecommunications 8 Sourcing Act;” 9 10 SECTION 25. Section 12-36-940 of the 1976 Code is amended 11 to read: 12 13 “Section 12-36-940. (A) Every Each retailer may add to the 14 sales price as a result of the five percent state sales tax: 15 (1) no amount on sales of ten cents or less; 16 (2) one cent on sales of eleven cents and over, but not in 17 excess of through twenty cents; 18 (3) two cents on sales of twenty-one cents and over, but not 19 in excess of through forty cents; 20 (4) three cents on sales of forty-one cents and over, but not 21 in excess of through sixty cents; 22 (5) four cents on sales of sixty-one cents and over, but not in 23 excess of through eighty cents; 24 (6) five cents on sales of eighty-one cents and over, but not 25 in excess of through one dollar; 26 (7) one cent additional for each twenty cents or major 27 fraction thereon in excess of it over of one dollar. 28 (B) The inability, impracticability, refusal, or failure to add 29 these amounts to the sales price and collect them from the 30 purchaser does not relieve the taxpayer from the tax levied by this 31 article. 32 (C) For purposes of the state sales tax on accommodations and 33 applicable combined state sales and local tax for counties imposing 34 a local sales tax collected by the department on their behalf, 35 retailers may add to the sales price an amount equal to the total 36 state and local sales tax rate times the sales price. The amount 37 added to the sales price may not be less than the amount added 38 pursuant to subsection (A). In calculating the tax due, retailers 39 may round a fraction of more than one - half of a cent to the next 40 whole cent and a fraction of a cent of one - half or less must be 41 eliminated. The inability, impracticability, refusal, or failure to 42 add the tax to the sales price as allowed by this subsection and

1 [3777] 30 1 collect them from the purchaser does not relieve the taxpayer of 2 his responsibility to pay tax.” 3 4 SECTION 26. Section 12-36-1310(B)(3) of the 1976 Code is 5 amended to read: 6 7 “(3) gross proceeds accruing or proceeding from the charges 8 for the ways or means for the transmission of the voice or 9 messages, including the charges for use of equipment furnished by 10 the seller or supplier of the ways or means for the transmission of 11 the voice or messages. Charges for mobile telecommunications 12 services subject to the tax under this item must be sourced in 13 accordance with the Mobile Telecommunications Sourcing Act as 14 provided in Title 4 of the United States Code. The term ‘charges 15 for mobile telecommunications services’ is defined for purposes of 16 this section the same as it is defined in the Mobile 17 Telecommunications Sourcing Act;” 18 19 SECTION 27. Section 12-37-220(C) of the 1976 Code is 20 amended to read: 21 22 “(C) Upon approval by the governing body of the county, the 23 five-year partial exemption allowed pursuant to subsections (A)(7), 24 and (B)(32), and (B)(34) is extended to an unrelated purchaser 25 who acquires the facilities in an arms-length transaction and who 26 preserves the existing facilities and existing number of jobs. The 27 partial exemption applies for the purchaser for five years if the 28 purchaser otherwise meets the exemption requirements.” 29 30 SECTION 28. The introductory paragraph of Section 12-37-930 31 of the 1976 Code is amended to read: 32 33 “All property must be valued for taxation at its true value in 34 money which in all cases is the price which the property would 35 bring following reasonable exposure to the market, where both the 36 seller and the buyer are willing, are not acting under compulsion, 37 and are reasonably well informed of the uses and purposes for 38 which it is adapted and for which it is capable of being used. The 39 fair market value for vehicles, watercraft, and aircraft must be 40 based on values derived from a nationally recognized publication 41 of vehicle valuations, except that the value may not exceed 42 ninety-five percent of the prior year’s value. The Department of 43 Revenue shall designate the nationally recognized publication and

1 [3777] 31 1 purchase the publication for county use in valuations. A new 2 vehicle, watercraft, or personal aircraft is valued by the county at 3 eighty - five percent of the manufacturer’s suggested retail price as 4 contained in the designated publication. The value is reduced by 5 ten percent of the previous year’s value in each subsequent year. 6 For models for which the department has provided values 7 previously, the current value is reduced by ten percent for each 8 subsequent year. However, acreage allotments or marketing quota 9 allotments for a commodity established under a program of the 10 United States Department of Agriculture is classified as 11 incorporeal hereditaments and the market value of real property to 12 which they are attached may not include the value, if any, of the 13 acreage allotment or marketing quota. Fair market value of 14 manufacturer’s machinery and equipment used in the conduct of 15 the manufacturing business, excluding vehicles, watercraft, and 16 aircraft required to be registered or licensed by a state or federal 17 agency, must be determined by reducing the original cost by an 18 annual allowance for depreciation as stated in the following 19 schedule.” 20 21 SECTION 29. Section 12-37-2640 of the 1976 Code is amended 22 to read: 23 24 “Section 12-37-2640. The auditor shall determine the assessed 25 value of the motor vehicle based on the values appearing in a 26 nationally recognized publication of vehicle valuations as 27 designated by the department, and shall calculate the amount of 28 taxes on the vehicle. If the value of a vehicle does not appear in 29 the publication, the auditor shall determine the value from other 30 available and reliable information. However, in the case of motor 31 vehicles whose If the model year of a motor vehicle is fifteen years 32 or more prior to before the tax year, the assessed value is fifty 33 dollars and in the case of a motor vehicle whose. If the model year 34 of a motor vehicle is less than fifteen years prior to before the tax 35 year, the assessed value must not be less than at least fifty dollars. 36 If a motorcycle has a model year of fifteen years or more before 37 the tax year, the assessed value is twenty dollars, and if its model 38 year is less than fifteen years before the tax year, the assessed 39 value must be at least twenty dollars. The millage to be applied to 40 motor vehicles licensed during January through December of each 41 year must be that applied to other taxable property within the 42 county, school district, special or tax district and, if applicable, the 43 municipality for the preceding regular tax year.”

1 [3777] 32 1 2 SECTION 30. Section 12-37-2680 of the 1976 Code is amended 3 to read: 4 5 “Section 12-37-2680. The assessed value of the vehicle must be 6 determined as of the first day of the month preceding the 7 beginning of the tax year for the vehicles vehicle. The assessed 8 values must be published in guides or manuals by the South 9 Carolina Department of Revenue and provided to the auditor of 10 each county as often as may be necessary to provide for current 11 values. When the value of any vehicle is not set forth in the guide 12 or manual the auditor shall determine the value from other 13 available information.” 14 15 SECTION 31. Section 12-54-43 of the 1976 Code, as last 16 amended by Act 399 of 2000, is further amended by adding an 17 appropriately lettered subsection to read: 18 19 “( ) A failure to deposit or pay taxes deducted and withheld 20 pursuant to Article 5 of Chapter 8 subjects the withholding agent 21 to a penalty of not less than ten dollars nor more than one thousand 22 dollars. The penalty imposed by this item applies to failure to 23 comply with the provisions of Section 12-54-250.” 24 25 SECTION 32. Section 12-54-44(C) of the 1976 Code is 26 amended to read: 27 28 “(C) A failure to deposit or pay taxes deducted and withheld 29 pursuant to Article 5 of Chapter 8 subjects the withholding agent 30 to a penalty of not less than ten dollars nor more than one thousand 31 dollars. The penalty imposed by this item applies to failure to 32 comply with the provisions of Section 12-54-250. Reserved ” 33 34 SECTION 33. Chapter 54, Title 12 of the 1976 Code is amended 35 by adding: 36 37 “Section 12-54-195. (A) As used in this section, ‘responsible 38 person’ includes any officer, partner, or employee of the taxpayer 39 who has a duty to pay to the department the sales tax due by the 40 taxpayer or use tax required or authorized to be collected by the 41 retailer pursuant to Chapter 36 of this title. 42 (B) If a retailer adds and collects the sales tax as permitted by 43 Section 12-36-940, or collects the use tax from the purchaser as

1 [3777] 33 1 required by Section 12-36-1350, but the retailer fails to remit the 2 tax collected to the department, then any responsible person may 3 be held liable, individually and personally, for a penalty equal to 4 one hundred percent of the tax collected but not remitted to the 5 department. The tax is not collectible from the retailer to the 6 extent the penalty imposed by this subsection is collected from a 7 responsible person.” 8 9 SECTION 34. Section 12-54-85 of the 1976 Code, as last 10 amended by Act 399 of 2000, is further amended by adding an 11 appropriately numbered subsection at the end to read: 12 13 “( )(1) An individual taxpayer is ‘financially disabled’ if he is 14 unable to manage his financial affairs by reason of a medically 15 determinable physical or mental impairment that is expected to 16 result in death or that has lasted or is expected to last for a 17 continuous period of not less than twelve months. An individual 18 taxpayer does not have that impairment for this purpose unless 19 proof of the existence of the impairment is provided to the 20 department in the form and manner the department requests. 21 (2) The running of the period of limitation provided in 22 subsection (F) is suspended during a period an individual taxpayer 23 is considered financially disabled. 24 (3) An individual taxpayer may not be treated as financially 25 disabled during a period that his spouse or another person is 26 authorized lawfully to act on his behalf in financial matters.” 27 28 SECTION 35. Section 12-54-200 of the 1976 Code is amended 29 to read: 30 31 “Section 12-54-200. (a)(A) The department, at its discretion, 32 after notification as provided in subsection (b) of this section, may 33 require any a person subject to provisions of law administered by 34 the department, not including Section 12-35-330, to post a cash or 35 surety bond, deposit and maintain taxes due including associated 36 penalties and interest in a separate account in a bank or other 37 financial institution in this State, or both, if the person fails to file a 38 timely return or pay any a tax for as many as two tax filing periods 39 in a twelve-month period. 40 (B) The amount of the bond must be determined by the 41 department and may not be greater than three times the estimated 42 average liability each filing period of the person required to file the 43 return. A cash bond must be held by the State Treasurer, without

1 [3777] 34 1 interest, as surety conditioned upon prompt payment of all taxes, 2 penalties, and interest imposed by law upon the person. 3 (C) If a person is required to maintain a separate account, he 4 must give the name of the financial institution, the account 5 number, and other information the department requires. Taxes, 6 penalties, and interest due must be withdrawn from the account by 7 preprinted, consecutively numbered checks signed by a properly 8 authorized officer, partner, manager, employee, or member of the 9 taxpayer and made payable to the department. Monies deposited 10 in the account may not be commingled with other funds. The 11 department, at its discretion, may apply Section 12 - 54 - 250, if the 12 amount due from the taxpayer is twenty thousand dollars or more. 13 (D) When any a person required to post a bond or maintain a 14 separate account, or both, complies with all requirements of law 15 and regulations for a period of twenty-four consecutive months, 16 the department shall return the bond and cancel the bonding and 17 separate account requirements. 18 (b)(E) The department shall may serve the notice required by 19 subsection (b) of this section by certified mail, or by delivery by an 20 authorized agent of the department delivering the notice to the 21 person in hand or by leaving the notice at the person’s last or usual 22 place of abode or at his place of business or employment. For 23 corporations, partnerships, or trusts, the notice may be delivered by 24 certified mail, or by delivery by an authorized agent for of the 25 department delivering the notice to an officer, partner, or trustee in 26 hand, or by leaving the notice at the officer’s, partner’s, or 27 trustee’s last or usual place of abode or at his place of business or 28 employment. 29 (F) A person who fails to comply with this section is guilty of a 30 misdemeanor and, upon conviction, must be fined not more than 31 five hundred dollars or imprisoned not more than thirty days, or 32 both. Offenses under this section are triable in magistrate’s court. 33 These penalties are in addition to other penalties provided by law.” 34 35 SECTION 36. Section 12-54-227(A)(2) of the 1976 Code is 36 amended to read: 37 38 “(2) For purposes of this section, ‘delinquent tax claim’ means a 39 tax liability that is due and owing for a period longer than six 40 months and for which the taxpayer has been given at least three 41 notices requesting payment and for any subsequent tax debts 42 issued, one notice of which has been sent by certified or registered 43 mail. The notice sent by certified or registered mail must include

1 [3777] 35 1 includes a statement that the taxpayer’s delinquency may be 2 referred to a collection agency in the taxpayer’s home state.” 3 4 SECTION 37. Section 12-54-240(B)(6) of the 1976 Code is 5 amended to read: 6 7 “(6) disclosure of a deficiency assessment to a probate court or 8 to an attorney conducting a closing, the filing of a tax lien for 9 uncollected taxes, and the issuance of a notice of levy;” 10 11 SECTION 38. Section 12-56-120 of the 1976 Code is amended 12 to read: 13 14 “Section 12-56-120. The department is and Internal Revenue 15 Service are exempt from the notice and appeal procedures of this 16 chapter. The sole and exclusive appeal procedures procedure for 17 the setoff of any a debt owed to the department is governed by the 18 provisions of Chapter 60 of Title 12 which provides the sole and 19 exclusive remedy for these procedures. The appeal procedure in 20 connection with a liability to the Internal Revenue Service is 21 governed by Title 26 of the United States Code.” 22 23 SECTION 39. Section 12-58-185(A) of the 1976 Code is 24 amended to read: 25 26 “(A) The department may extend the time for payment of an 27 amount due it for a period not to exceed eighteen months from the 28 date fixed for the payment and, in exceptional cases, for a further 29 period not to exceed twelve months. An extension under pursuant 30 to this section may be granted only where if it is shown to the 31 satisfaction of the department that the payment of the amount due 32 it upon the date originally fixed for the payment will result in 33 undue hardship to the taxpayer.” 34 35 SECTION 40. Section 12-60-90(C) of the 1976 Code is 36 amended to read: 37 38 “(C) Taxpayers may be represented during the administrative tax 39 process by: 40 (1) the same individuals who can may represent them in 41 administrative tax proceedings with the Internal Revenue Service 42 pursuant to Section 10.3 (a), (b), and (c), Section 10.7 (a), (1) (c)(i) 43 through (4) and (7) (c)(vi), and (c)(viii), and Section 10.7 (b) (d)

1 [3777] 36 1 and (c) (e) of United States Treasury Department Circular No. 230; 2 and 3 (2) a real estate appraiser who is registered, licensed, or 4 certified pursuant to Chapter 60 of Title 40 during the 5 administrative tax process in a matter limited to questions 6 concerning the valuation of real property.” 7 8 SECTION 41. Section 4-37-30(A)(15) of the 1976 Code, as 9 amended by Act 368 of 2000, is further amended to read: 10 11 “(15) The revenues of the tax collected in each county 12 pursuant to this section must be remitted to the State Treasurer and 13 credited to a fund separate and distinct from the general fund of the 14 State. After deducting the amount of refunds made and costs to the 15 Department of Revenue of administering the tax, not to exceed one 16 percent of the revenues, the State Treasurer shall distribute the 17 revenues and all interest earned on the revenues while on deposit 18 with him quarterly to the county in which the tax is imposed and 19 these revenues and interest earnings must be used only for the 20 purpose stated in the imposition ordinance. The State Treasurer 21 may correct misallocation misallocations costs or refunds by 22 adjusting later distributions, but these adjustments must be made in 23 the same fiscal year as the misallocation misallocations. However, 24 allocations made as a result of city or county code errors must be 25 corrected prospectively.” 26 27 SECTION 42. A. Section 6(A) of Act 588 of 1994 is amended 28 to read: 29 30 “(A) The revenues of the tax collected in the county under this 31 act must be remitted to the State Treasurer and credited to a fund 32 separate and distinct from the general fund of the State. After 33 deducting the amount of refunds made and costs to the Department 34 of Revenue and Taxation of administering the tax, not to exceed 35 one percent of the revenues, the State Treasurer shall distribute the 36 revenues quarterly to the county treasurer who holds the debt 37 service funds established for payment of principal and interest on 38 the bonds to which the tax is applicable. The State Treasurer may 39 correct misallocation misallocations costs or refunds by adjusting 40 subsequent distributions, but these adjustments must be made in 41 the same fiscal year as the misallocation. However, allocations 42 made as a result of city or county code errors must be corrected 43 prospectively.”

1 [3777] 37 1 2 B.Section 6 of Act 588 of 1994, as last amended by Act 458 of 3 1998, is further amended by adding at the end: 4 5 “(D) Annually, in the month of June, funds collected by the 6 Department of Revenue from the Cherokee County School District 7 1 School Bond-Property Tax Relief Act which are not identified as 8 to the governmental unit due the tax after reasonable effort by the 9 department to determine the source of collection must be 10 transferred to the State Treasurer’s Office. The State Treasurer 11 shall distribute these funds to the county treasurer in the county 12 area in which the tax is imposed and the revenues must be used 13 only for the purposes stated in the imposition resolution. The State 14 Treasurer shall calculate this supplemental distribution on a 15 proportional basis based on the current fiscal year’s county area 16 revenue collections.” 17 18 SECTION 43. A. Section 7A of Act 441 of 2000 is amended 19 to read: 20 21 “(A) The revenues of the tax collected in the county under this 22 act must be remitted to the State Treasurer and credited to a fund 23 separate and distinct from the general fund of the State. After 24 deducting the amount of refunds made and costs to the department 25 of administering the tax, not to exceed one percent of the revenues, 26 the State Treasurer shall distribute the revenues quarterly to the 27 county treasurer, who shall hold the debt service funds for 28 payment of principal and interest on the bonds to which the tax is 29 applicable. The State Treasurer may correct misallocation costs or 30 refunds misallocations by adjusting subsequent distributions, but 31 these adjustments must be made in the same fiscal year as the 32 misallocation. However, allocations made as a result of city or 33 county code errors must be corrected prospectively.” 34 35 B. Section 7 of Act 441 of 2000 is amended by adding at the 36 end: 37 38 “(D) Annually, in the month of June, funds collected by the 39 Department of Revenue from the Chesterfield County School 40 District School Bond-Property Tax Relief Act which are not 41 identified as to the governmental unit due the tax after reasonable 42 effort by the department to determine the source of collection must 43 be transferred to the State Treasurer’s Office. The State Treasurer

1 [3777] 38 1 shall distribute these funds to the county treasurer in the county 2 area in which the tax is imposed and the revenues must be used 3 only for the purposes stated in the imposition resolution. The State 4 Treasurer shall calculate this supplemental distribution on a 5 proportional basis based on the current fiscal year’s county area 6 revenue collections.” 7 8 SECTION 44. Section 12-10-45 of the 1976 Code is repealed 9 effective July 1, 2001, except that a revitalization agreement, 10 including a preliminary revitalization agreement, entered into 11 before July 1, 2001, remains subject to its provisions. 12 13 SECTION 45. The repeal or amendment by this act of any law, 14 whether temporary or permanent or civil or criminal, does not 15 affect pending actions, rights, duties, or liabilities founded thereon, 16 or alter, discharge, release or extinguish any penalty, forfeiture, or 17 liability incurred under the repealed or amended law, unless the 18 repealed or amended provision shall so expressly provide. After 19 the effective date of this act, all laws repealed or amended by this 20 act must be taken and treated as remaining in full force and effect 21 for the purpose of sustaining any pending or vested right, civil 22 action, special proceeding, criminal prosecution, or appeal existing 23 as of the effective date of this act, and for the enforcement of 24 rights, duties, penalties, forfeitures, and liabilities as they stood 25 under the repealed or amended laws. 26 27 SECTION 46. If any section, subsection, paragraph, 28 subparagraph, sentence, clause, phrase, or word of this act is for 29 any reason held to be unconstitutional or invalid, such holding 30 shall not affect the constitutionality or validity of the remaining 31 portions of this act, the General Assembly hereby declaring that it 32 would have passed these sections, and each and every section, 33 subsection, paragraph, subparagraph, sentence, clause, phrase, and 34 word thereof, irrespective of the fact that any one or more other 35 sections, subsections, paragraphs, subparagraphs, sentences, 36 clauses, phrases, or words hereof may be declared to be 37 unconstitutional, invalid, or otherwise ineffective. 38 39 SECTION 47. SECTIONS 1, 7, 10, 11, 12, and 13 of this act 40 take effect July 1, 2001. SECTIONS 22, 23, 24, 25, and 26 take 41 effect on the first day of the second month following approval by 42 the Governor. SECTION 44 takes effect July 1, 2001, and applies 43 to an agreement entered into after June 30, 2001. The remaining

1 [3777] 39 1 SECTIONS of this act take effect upon approval by the Governor, 2 and SECTIONS 2, 3, 4, 5, 6, 8, 9, 14, and 15 apply to taxable years 3 beginning after December 31, 2000, and SECTIONS 28 through 4 30 apply to personal property tax years beginning July 1, 2001, 5 and thereafter. 6 ----XX----

1 [3777] 40

Load more

  77

Copy Link