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					                                   South Carolina General Assembly
                                       119th Session, 2011-2012

H. 4506

STATUS INFORMATION

General Bill
Sponsors: Rep. Butler Garrick
Document Path: l:\council\bills\nbd\11965dg12.docx

Introduced in the House on January 10, 2012
Currently residing in the House Committee on Ways and Means

Summary: Sales and use tax exemptions


HISTORY OF LEGISLATIVE ACTIONS

    Date     Body    Action Description with journal page number
 12/6/2011   House   Prefiled
 12/6/2011   House   Referred to Committee on Ways and Means
 1/10/2012   House   Introduced and read first time (House Journal-page 64)
 1/10/2012   House   Referred to Committee on Ways and Means (House Journal-page 64)

View the latest legislative information at the LPITS web site


VERSIONS OF THIS BILL

12/6/2011
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 9                              A BILL
10
11   TO AMEND SECTION 12-36-2120, AS AMENDED, CODE OF
12   LAWS OF SOUTH CAROLINA, 1976, RELATING TO SALES
13   AND USE TAX EXEMPTIONS, SO AS TO DELETE,
14   EFFECTIVE JULY 1, 2012, EXEMPTIONS FOR ALL SALES
15   EXCEPT THOSE EXEMPT PURSUANT TO THE
16   CONSTITUTION AND LAWS OF THIS STATE AND THE
17   UNITED STATES; BY ADDING SECTION 11-11-260 SO AS
18   TO   REQUIRE    THE     GENERAL   ASSEMBLY    TO
19   APPROPRIATE THE EXCESS SALES TAX REVENUE EACH
20   YEAR TO CERTAIN AGENCIES FOR CERTAIN PURPOSES.
21
22   Be it enacted by the General Assembly of the State of South
23   Carolina:
24
25   SECTION 1. Section 12-36-2120 of the 1976 Code, as last
26   amended by Act 32 of 2011, is further amended to read:
27
28      “Section 12-36-2120. Exempted from the taxes imposed by this
29   chapter are the gross proceeds of sales, or sales price of:
30      (1) tangible personal property or receipts of any business
31   which the State is prohibited from taxing by the Constitution or
32   laws of the United States of America or by the Constitution or laws
33   of this State; and
34      (2) tangible personal property sold to the federal government;
35   (3)(a) textbooks, books, magazines, periodicals, newspapers, and
36   access to on-line information systems used in a course of study in
37   primary and secondary schools and institutions of higher learning
38   or for students’ use in the school library of these schools and
39   institutions;
40   (b) books, magazines, periodicals, newspapers, and access to
41   on-line information systems sold to publicly supported state,
42   county, or regional libraries;

     [4506]                           1
 1   Items in this category may be in any form, including microfilm,
 2   microfiche, and CD ROM; however, transactions subject to tax
 3   under Sections 12-36-910(B)(3) and 12-36-1310(B)(3) do not fall
 4   within this exemption;
 5   (4) livestock. “Livestock” is defined as domesticated animals
 6   customarily raised on South Carolina farms for use primarily as
 7   beasts of burden, or food, and certain mammals when raised for
 8   their pelts or fur. Animals such as dogs, cats, reptiles, fowls
 9   (except baby chicks and poults), and animals of a wild nature, are
10   not considered livestock;
11   (5) feed used for the production and maintenance of poultry and
12   livestock;
13   (6) insecticides, chemicals, fertilizers, soil conditioners, seeds, or
14   seedlings, or nursery stock, used solely in the production for sale
15   of farm, dairy, grove, vineyard, or garden products or in the
16   cultivation of poultry or livestock feed;
17   (7) containers and labels used in:
18   (a) preparing agricultural, dairy, grove, or garden products for sale;
19   or
20   (b) preparing turpentine gum, gum spirits of turpentine, and gum
21   resin for sale.
22   For purposes of this exemption, containers mean boxes, crates,
23   bags, bagging, ties, barrels, and other containers;
24   (8) newsprint paper, newspapers, and religious publications,
25   including the Holy Bible and the South Carolina Department of
26   Agriculture’s The Market Bulletin;
27   (9) coal, or coke or other fuel sold to manufacturers, electric power
28   companies, and transportation companies for:
29   (a) use or consumption in the production of by-products;
30   (b) the generation of heat or power used in manufacturing tangible
31   personal property for sale.           For purposes of this item,
32   “manufacturer” or “manufacturing” includes the activities of a
33   processor;
34   (c) the generation of electric power or energy for use in
35   manufacturing tangible personal property for sale;
36   (d) the generation of motive power for transportation. For the
37   purposes of this exemption, “manufacturer” or “manufacturing”
38   includes the activities of mining and quarrying;
39   (e) the generation of motive power for test flights of aircraft by the
40   manufacturer of the aircraft where:
41   (i) the taxpayer invests at least seven hundred fifty million dollars
42   in real or personal property or both comprising or located at a
43   single manufacturing facility over a seven-year period; and

     [4506]                            2
 1   (ii) the taxpayer creates at least three thousand eight hundred
 2   full-time new jobs at the single manufacturing facility during that
 3   seven-year period; or
 4   (f) the transportation of an aircraft prior to its completion from one
 5   facility of the manufacturer of the aircraft to another facility of the
 6   manufacturer of the aircraft, not including the transportation of
 7   major component parts for construction or assembly, or the
 8   transportation of personnel. This exemption only applies when:
 9   (i) the taxpayer invests at least seven hundred fifty million dollars
10   in real or personal property or both comprising or located at a
11   single manufacturing facility over a seven-year period; and
12   (ii) the taxpayer creates at least three thousand eight hundred
13   full-time new jobs at the single manufacturing facility during that
14   seven-year period.
15   To qualify for the exemptions provided for in subitems (e) and (f),
16   the taxpayer shall notify the department before the first month it
17   uses the exemption and shall make the required investment and
18   create the required number of full-time new jobs over the
19   seven-year period beginning on the date provided by the taxpayer
20   to the department in its notices. The taxpayer shall notify the
21   department in writing that it has met the seven hundred fifty
22   million dollar investment requirement and has created the three
23   thousand eight hundred full-time new jobs or, after the expiration
24   of the seven-year period, that it has not met the seven hundred fifty
25   million dollar investment requirement and created the three
26   thousand eight hundred full-time new jobs. The department may
27   assess any tax due on fuel purchased tax free pursuant to subitems
28   (e) and (f) but due the State as a result of the taxpayer’s failure to
29   meet the seven hundred fifty million dollar investment requirement
30   and create the three thousand eight hundred full-time new jobs.
31   The running of the periods of limitations for assessment of taxes
32   provided in Section 12-54-85 is suspended for the time period
33   beginning with notice to the department before the taxpayer uses
34   the exemption and ending with notice to the department that the
35   taxpayer either has met or has not met the seven hundred fifty
36   million dollar investment requirement and created the three
37   thousand eight hundred full-time new jobs.
38   As used in subitems (e) and (f), “taxpayer” includes a person who
39   bears a relationship to the taxpayer as described in Section 267(b)
40   of the Internal Revenue Code.
41   (10)(a) meals or foodstuffs used in furnishing meals to school
42   children, if the sales or use are within school buildings and are not
43   for profit;

     [4506]                             3
 1   (b) meals or foodstuffs provided to elderly or disabled persons at
 2   home by nonprofit organizations that receive only charitable
 3   contributions in addition to sale proceeds from the meals;
 4   (c) food stuffs, either prepared or packaged for the homeless or
 5   needy that are sold to nonprofit organizations, or food stuffs that
 6   are subsequently sold or donated by a nonprofit organization to
 7   another nonprofit organization. This subitem is only applicable to
 8   food stuffs which are eligible for purchase under the USDA food
 9   stamp program;
10   (d) meals or foodstuffs prepared or packaged that are sold to public
11   or nonprofit organizations for congregate or in-home service to the
12   homeless or needy or disabled adults over eighteen years of age or
13   individuals over sixty years of age. This subitem only applies to
14   meals and foodstuffs eligible for purchase under the USDA food
15   stamp program.
16   (11)(a) toll charges for the transmission of voice or messages
17   between telephone exchanges;
18   (b) charges for telegraph messages;
19   (c) carrier access charges and customer access line charges
20   established by the Federal Communications department or the
21   South Carolina Public Service department; and
22   (d) transactions involving automatic teller machines;
23   (12) water sold by public utilities, if rates and charges are of the
24   kind determined by the Public Service Commission, or water sold
25   by nonprofit corporations organized pursuant to Chapter 36 of
26   Title 33;
27   (13) fuel, lubricants, and supplies for use or consumption aboard
28   ships in intercoastal trade or foreign commerce. This exemption
29   does not exempt or exclude from the tax the sale of materials and
30   supplies used in fulfilling a contract for the painting, repair, or
31   reconditioning of ships and other watercraft;
32   (14) wrapping paper, wrapping twine, paper bags, and containers,
33   used incident to the sale and delivery of tangible personal property;
34   (15)(a) motor fuel, blended fuel, and alternative fuel subject to tax
35   under Chapter 28 of Title 12; however, gasoline used in aircraft is
36   not exempt from the sales and use tax;
37   (b) if the fuel tax is subsequently refunded under Section
38   12-28-710, the sales or use tax is due unless otherwise exempt, and
39   the person receiving the refund is liable for the sales or use tax;
40   (c) fuels used in farm machinery and farm tractors; and
41   (d) fuels used in commercial fishing vessels.
42   (16) farm machinery and their replacement parts and attachments,
43   used in planting, cultivating or harvesting farm crops, including

     [4506]                            4
 1   bulk coolers (farm dairy tanks) used in the production and
 2   preservation of milk on dairy farms, and machines used in the
 3   production of poultry and poultry products on poultry farms, when
 4   such products are sold in the original state of production or
 5   preparation for sale. This exemption does not include automobiles
 6   or trucks;
 7   (17) machines used in manufacturing, processing, recycling,
 8   compounding, mining, or quarrying tangible personal property for
 9   sale. “Machines” include the parts of machines, attachments, and
10   replacements used, or manufactured for use, on or in the operation
11   of the machines and which (a) are necessary to the operation of the
12   machines and are customarily so used, or (b) are necessary to
13   comply with the order of an agency of the United States or of this
14   State for the prevention or abatement of pollution of air, water, or
15   noise that is caused or threatened by any machine used as provided
16   in this section. This exemption does not include automobiles or
17   trucks. As used in this item “recycling” means a process by which
18   materials that otherwise would become solid waste are collected,
19   separated, or processed and reused, or returned to use in the form
20   of raw materials or products, including composting, for sale. In
21   applying this exemption to machines used in recycling, the
22   following percentage of the gross proceeds of sale, or sales price
23   of, machines used in recycling are exempt from the taxes imposed
24   by this chapter:
25         Fiscal Year of Sale       Percentage
26         Fiscal year 1997-98        fifty percent
27         After June 30, 1998        one hundred percent;
28   (18) fuel used exclusively to cure agricultural products;
29   (19) electricity used by cotton gins, manufacturers, miners, or
30   quarriers to manufacture, mine, or quarry tangible personal
31   property for sale. For purposes of this item, “manufacture” or
32   “manufacture” includes the activities of processors;
33   (20) railroad cars, locomotives, and their parts, monorail cars, and
34   the engines or motors that propel them, and their parts;
35   (21) vessels and barges of more than fifty tons burden;
36   (22) materials necessary to assemble missiles to be used by the
37   Armed Forces of the United States;
38   (23) farm, grove, vineyard, and garden products, if sold in the
39   original state of production or preparation for sale, when sold by
40   the producer or by members of the producers immediate family;
41   (24) supplies and machinery used by laundries, cleaning, dyeing,
42   pressing, or garment or other textile rental establishments in the


     [4506]                           5
 1   direct performance of their primary function, but not sales of
 2   supplies and machinery used by coin-operated laundromats;
 3   (25) motor vehicles (excluding trucks) or motorcycles, which are
 4   required to be licensed to be used on the highways, sold to a
 5   resident of another state, but who is located in South Carolina by
 6   reason of orders of the United States Armed Forces. This
 7   exemption is allowed only if within ten days of the sale the vendor
 8   is furnished a statement from a commissioned officer of the Armed
 9   Forces of a higher rank than the purchaser certifying that the buyer
10   is a member of the Armed Forces on active duty and a resident of
11   another state or if the buyer furnishes a leave and earnings
12   statement from the appropriate department of the armed services
13   which designates the state of residence of the buyer;
14   (26) all supplies, technical equipment, machinery, and electricity
15   sold to radio and television stations, and cable television systems,
16   for use in producing, broadcasting, or distributing programs. For
17   the purpose of this exemption, radio stations, television stations,
18   and cable television systems are deemed to be manufacturers;
19   (27) all plants and animals sold to any publicly supported
20   zoological park or garden or to any of its nonprofit support
21   corporations;
22   (28)(a) medicine and prosthetic devices sold by prescription,
23   prescription medicines used to prevent respiratory syncytial virus,
24   prescription medicines and therapeutic radiopharmaceuticals used
25   in the treatment of rheumatoid arthritis, cancer, lymphoma,
26   leukemia, or related diseases, including prescription medicines
27   used to relieve the effects of any such treatment, free samples of
28   prescription medicine distributed by its manufacturer and any use
29   of these free samples;
30   (b) hypodermic needles, insulin, alcohol swabs, blood sugar testing
31   strips, monolet lancets, dextrometer supplies, blood glucose
32   meters, and other similar diabetic supplies sold to diabetics under
33   the authorization and direction of a physician;
34   (c) disposable medical supplies such as bags, tubing, needles, and
35   syringes, which are dispensed by a licensed pharmacist in
36   accordance with an individual prescription written for the use of a
37   human being by a licensed health care provider, which are used for
38   the intravenous administration of a prescription drug or medicine,
39   and which come into direct contact with the prescription drug or
40   medicine. This exemption applies only to supplies used in the
41   treatment of a patient outside of a hospital, skilled nursing facility,
42   or ambulatory surgical treatment center;


     [4506]                             6
 1   (d) medicine donated by its manufacturer to a public institution of
 2   higher education for research or for the treatment of indigent
 3   patients; and
 4   (e) dental prosthetic devices;
 5   (f) prescription drugs dispensed to Medicare Part A patients
 6   residing in a nursing home are not considered sales to the nursing
 7   home and are not subject to the sales tax.
 8   (29) tangible personal property purchased by persons under a
 9   written contract with the federal government when the contract
10   necessitating the purchase provides that title and possession of the
11   property is to transfer from the contractor to the federal
12   government at the time of purchase or after the time of purchase.
13   This exemption also applies to purchases of tangible personal
14   property which becomes part of real or personal property owned
15   by the federal government or, as provided in the written contract, is
16   to transfer to the federal government. This exemption does not
17   apply to purchases of tangible personal property used or consumed
18   by the purchaser;
19   (30) office supplies, or other commodities, and services resold by
20   the Division of General Services of the State Budget and Control
21   Board to departments and agencies of the state government, if the
22   tax was paid on the divisions original purchase;
23   (31) vacation time sharing plans, vacation multiple ownership
24   interests, and exchanges of interests in vacation time sharing plans
25   and vacation multiple ownership interests as provided by Chapter
26   32 of Title 27, and any other exchange of accommodations in
27   which the accommodations to be exchanged are the primary
28   consideration;
29   (32) natural and liquefied petroleum gas and electricity used
30   exclusively in the production of poultry, livestock, swine, and
31   milk;
32   (33) electricity, natural gas, fuel oil, kerosene, LP gas, coal, or any
33   other combustible heating material or substance used for
34   residential purposes. Individual sales of kerosene or LP gas of
35   twenty gallons or less by retailers are considered used for
36   residential heating purposes;
37   (34) fifty percent of the gross proceeds of the sale of a modular
38   home regulated pursuant to Chapter 43 of Title 23, both on-frame
39   and off-frame. For purposes of this item only, “gross proceeds of
40   sale” equals the manufacturer’s net invoice price of the modular
41   home sold, including all accessories built in to the modular home
42   at the time of delivery to the purchaser and not including freight or


     [4506]                             7
 1   deposit on returnable materials. The manufacturer shall collect the
 2   tax and remit it to the Department of Revenue;
 3   (35) motion picture film sold or rented to or by theaters;
 4   (36) tangible personal property where the seller, by contract of
 5   sale, is obligated to deliver to the buyer, or to an agent or donee of
 6   the buyer, at a point outside this State or to deliver it to a carrier or
 7   to the mails for transportation to the buyer, or to an agent or donee
 8   of the buyer, at a point outside this State;
 9   (37) petroleum asphalt products, commonly used in paving,
10   purchased in this State, which are transported and consumed out of
11   this State;
12   (38) hearing aids, as defined by Section 40-25-20(5);
13   (39) concession sales at a festival by an organization devoted
14   exclusively to public or charitable purposes, if:
15   (a) all the net proceeds are used for those purposes;
16   (b) in advance of the festival, its organizers provide the
17   department, on a form it prescribes, information necessary to
18   ensure compliance with this item.
19   For purposes of this item, a “festival” does not include a
20   recognized state or county fair;
21   (40) containers and chassis, including all parts, components, and
22   attachments, sold to international shipping lines which have a
23   contractual relationship with the South Carolina State Ports
24   Authority and which are used in the import or export of goods to
25   and from this State;
26   (41) items sold by organizations exempt under Section
27   12-37-220A(3) and (4) and B(5), (6), (7), (8), (12), (16), (19), (22),
28   and (24), if the net proceeds are used exclusively for exempt
29   purposes and no benefit inures to any individual. An organization
30   whose sales are exempted by this item is also exempt from the
31   retail license tax provided in Article 5 of this chapter;
32   (42) depreciable assets, used in the operation of a business,
33   pursuant to the sale of the business. This exemption only applies
34   when the entire business is sold by the owner of it, pursuant to a
35   written contract and the purchaser continues operation of the
36   business;
37   (43) all supplies, technical equipment, machinery, and electricity
38   sold to motion picture companies for use in filming or producing
39   motion pictures. For the purposes of this item, “motion picture”
40   means any audiovisual work with a series of related images either
41   on film, tape, or other embodiment, where the images shown in
42   succession impart an impression of motion together with
43   accompanying sound, if any, which is produced, adapted, or

     [4506]                              8
 1   altered for exploitation as entertainment, advertising, promotional,
 2   industrial, or educational media; and a “motion picture company”
 3   means a company generally engaged in the business of filming or
 4   producing motion pictures;
 5   (44) electricity used to irrigate crops;
 6   (45) building materials, supplies, fixtures, and equipment for the
 7   construction, repair, or improvement of or that become a part of a
 8   self-contained enclosure or structure specifically designed,
 9   constructed, and used for the commercial housing of poultry or
10   livestock.
11   (46) War memorials or monuments honoring units or contingents
12   of the Armed Forces of the United States or of the National Guard,
13   including United States military vessels, which memorials or
14   monuments are affixed to public property;
15   (47) tangible personal property sold to charitable hospitals
16   predominantly serving children exempt under Section 12-37-220,
17   where care is provided without charge to the patient.
18   (48) solid waste disposal collection bags required pursuant to the
19   solid waste disposal plan of a county or other political subdivision
20   if the plan requires the purchase of a specifically designated
21   containment bag for solid waste disposal;
22   (49) postage purchased by a person engaged in the business of
23   selling advertising services for clients consisting of mailing, or
24   directing the mailing of, printed advertising material through the
25   United States mail directly to the client’s customers or potential
26   customers or by a person to mail or direct the mailing of printed
27   advertising material through the United States mail to a potential
28   customer;
29   (50)(a) recycling property;
30   (b) electricity, natural gas, propane, or fuels of any type, oxygen,
31   hydrogen, nitrogen, or gasses of any type, and fluids and lubricants
32   used by a qualified recycling facility;
33   (c) tangible personal property which becomes, or will become, an
34   ingredient or component part of products manufactured for sale by
35   a qualified recycling facility;
36   (d) tangible personal property of or for a qualified recycling
37   facility which is or will be used (1) for the handling or transfer of
38   postconsumer waste material, (2) in or for the manufacturing
39   process, or (3) in or for the handling or transfer of manufactured
40   products;
41   (e) machinery and equipment foundations used or to be used by a
42   qualified recycling facility;


     [4506]                            9
 1   (f) as used in this item, “recycling property”, “qualified recycling
 2   facility”, and “postconsumer waste material” have the meanings
 3   provided in Section 12-6-3460;
 4   (51) material handling systems and material handling equipment
 5   used in the operation of a distribution facility or a manufacturing
 6   facility including, but not limited to, racks used in the operation of
 7   a distribution facility or a manufacturing facility and either used or
 8   not used to support a facility structure or part of it. To qualify for
 9   this exemption, the taxpayer shall notify the department before the
10   first month it uses the exemption and shall invest at least thirty-five
11   million dollars in real or personal property in this State over the
12   five-year period beginning on the date provided by the taxpayer to
13   the department in its notices. The taxpayer shall notify the
14   department in writing that it has met the thirty-five million dollar
15   investment requirement or, after the expiration of the five years,
16   that it has not met the thirty-five million dollar investment
17   requirement. The department may assess any tax due on material
18   handling systems and material handling equipment purchased
19   tax-free pursuant to this item but due the State as a result of the
20   taxpayer’s failure to meet the thirty-five million dollar investment
21   requirement. The running of the periods of limitations for
22   assessment of taxes provided in Section 12-54-85 is suspended for
23   the time period beginning with notice to the department before the
24   taxpayer uses the exemption and ending with notice to the
25   department that the taxpayer either has met or has not met the
26   thirty-five million dollar investment requirement.
27   (52) Parts and supplies used by persons engaged in the business of
28   repairing or reconditioning aircraft owned by or leased to the
29   federal government or commercial air carriers. This exemption
30   does not extend to tools and other equipment not attached to or that
31   do not become a part of the aircraft.
32   (53) motor vehicle extended service contracts and motor vehicle
33   extended warranty contracts.
34   (54) clothing and other attire required for working in a Class 100
35   or better as defined in Federal Standard 209E clean room
36   environment.
37   (55) audiovisual masters made or used by a production company in
38   making visual and audio images for first generation reproduction.
39   For purposes of this item:
40   (a) “Audiovisual master” means an audio or video film, tape, or
41   disk, or another audio or video storage device from which all other
42   copies are made.


     [4506]                            10
 1   (b) “Production company” means a person or entity engaged in the
 2   business of making motion picture, television, or radio images for
 3   theatrical, commercial, advertising, or education purposes.
 4   (56) Machines used in research and development. “Machines”
 5   includes machines and parts of machines, attachments, and
 6   replacements which are used or manufactured for use on or in the
 7   operation of the machines, which are necessary to the operation of
 8   the machines, and which are customarily used in that way.
 9   “Machines used in research and development” means machines
10   used directly and primarily in research and development, in the
11   experimental or laboratory sense, of new products, new uses for
12   existing products, or improvement of existing products.
13   (57)(a) sales taking place during a period beginning 12:01 a.m. on
14   the first Friday in August and ending at twelve midnight the
15   following Sunday of:
16   (i) clothing;
17   (ii) clothing accessories including, but not limited to, hats, scarves,
18   hosiery, and handbags;
19   (iii) footwear;
20   (iv) school supplies including, but not limited to, pens, pencils,
21   paper, binders, notebooks, books, bookbags, lunchboxes, and
22   calculators;
23   (v) computers, printers and printer supplies, and computer
24   software;
25   (vi) bath wash clothes, blankets, bed spreads, bed linens, sheet sets,
26   comforter sets, bath towels, shower curtains, bath rugs and mats,
27   pillows, and pillow cases.
28   (b) The exemption allowed by this item does not apply to:
29   (i) sales of jewelry, cosmetics, eyewear, wallets, watches;
30   (ii) sales of furniture;
31   (iii) a sale of an item placed on layaway or similar deferred
32   payment and delivery plan however described;
33   (iv) rental of clothing or footwear;
34   (v) a sale or lease of an item for use in a trade or business.
35   (c) Before July tenth of each year, the department shall publish and
36   make available to the public and retailers a list of those articles
37   qualifying for the exemption allowed by this item.
38   (58) cooperative direct mail promotional advertising materials and
39   promotional maps, brochures, pamphlets, or discount coupons by
40   nonprofit chambers of commerce or convention and visitor bureaus
41   who are exempt from income taxation pursuant to Internal
42   Revenue Code Section 501(c) delivered at no charge by means of
43   interstate carrier, a mailing house, or a United States Post Office to

     [4506]                            11
 1   residents of this State from locations both inside and outside the
 2   State. For purposes of this item, “cooperative direct mail
 3   promotional advertising materials” means discount coupons,
 4   advertising leaflets, and similar printed advertising, including any
 5   accompanying envelopes and labels which are distributed with
 6   promotional advertising materials of more than one business in a
 7   single package to potential customers, at no charge to the potential
 8   customer, of the businesses paying for the delivery of the material.
 9   (59) facilities for transmitting electricity that is transferred, sold, or
10   exchanged by electrical utilities, municipalities, electric
11   cooperatives, or political subdivisions to a limited liability
12   company which is subject to regulation under the Federal Power
13   Act (16 U.S.C. Section 791(a)) and which is formed to operate or
14   to take functional control of electric transmission assets as defined
15   in the Federal Power Act;
16   (60) a lottery ticket sold pursuant to Chapter 150 of Title 59;
17   (61) copies of or access to legislation or other informational
18   documents provided to the general public or any other person by a
19   legislative agency when a charge for these copies is made
20   reflecting the agency’s cost of the copies. Funds received as
21   revenue from the sale of materials or as reimbursements for the
22   cost of providing certain supplies or services or refunds must be
23   remitted to the State Treasurer as collected, but in no event later
24   than twelve working days from the date of the receipt of any such
25   funds.
26   (62) seventy percent of the gross proceeds of the rental or lease of
27   portable toilets.
28   (63) prescription and over-the-counter medicines and medical
29   supplies, including diabetic supplies, diabetic diagnostic
30   equipment, and diabetic testing equipment, sold to a health care
31   clinic that provides medical and dental care without charge to all of
32   its patients.
33   (64) Sweetgrass baskets made by artists of South Carolina using
34   locally grown sweetgrass.
35   (65)(a) computer equipment, as defined in subitem (c) of this item,
36   used in connection with a technology intensive facility as defined
37   in Section 12-6-3360(M)(14)(b), where:
38   (i) the taxpayer invests at least three hundred million dollars in real
39   or personal property or both comprising or located at the facility
40   over a five-year period;
41   (ii) the taxpayer creates at least one hundred new full-time jobs at
42   the facility during that five-year period, and the average cash
43   compensation of at least one hundred of the new full-time jobs is

     [4506]                             12
 1   one hundred fifty percent of the per capita income of the State
 2   according to the most recently published data available at the time
 3   the facility’s construction starts; and
 4   (iii) at least sixty percent of the three hundred million dollars
 5   minimum investment consists of computer equipment;
 6   (b) computer equipment, as defined in subitem (c) of this item,
 7   used in connection with a manufacturing facility, where:
 8   (i) the taxpayer invests at least seven hundred fifty million dollars
 9   in real or personal property or both comprising or located at the
10   facility over a seven-year period; and
11   (ii) the taxpayer creates at least three thousand eight hundred
12   full-time new jobs at the facility during that seven-year period.
13   As used in this subitem, “taxpayer” includes a person who bears a
14   relationship to the taxpayer as described in Section 267(b) of the
15   Internal Revenue Code.
16   (c) For the purposes of this item, “computer equipment” means
17   original or replacement servers, routers, switches, power units,
18   network devices, hard drives, processors, memory modules,
19   motherboards, racks, other computer hardware and components,
20   cabling, cooling apparatus, and related or ancillary equipment,
21   machinery, and components, the primary purpose of which is to
22   store, retrieve, aggregate, search, organize, process, analyze, or
23   transfer data or any combination of these, or to support related
24   computer engineering or computer science research.
25   (d) These exemptions apply from the start of the investment in or
26   construction of the technology intensive facility or the
27   manufacturing facility. The taxpayer shall notify the Department
28   of Revenue of its use of the exemption provided in this item on or
29   before the first sales tax return filed with the department after the
30   first such use. Upon receipt of the notification, the department
31   shall issue an appropriate exemption certificate to the taxpayer to
32   be used for qualifying purposes under this item. Within six
33   months after the fifth anniversary of the taxpayer’s first use of this
34   exemption, the taxpayer shall notify the department in writing that
35   it has or has not met the investment and job requirements of this
36   item by the end of that five-year period. Once the department
37   certifies that the taxpayer has met the investment and job
38   requirements, all subsequent purchases of or investments in
39   computer equipment, including to replace originally deployed
40   computer equipment or to implement future expansions, likewise
41   shall qualify for the exemption described above, regardless of
42   when the taxpayer makes the investments.


     [4506]                            13
 1   (e) The department may assess any tax due on property purchased
 2   tax free pursuant to this item but due the State if the taxpayer
 3   subsequently fails timely to meet the investment and job
 4   requirements of this item after being granted the exemption; for
 5   purposes of determining whether the taxpayer has timely satisfied
 6   the investment requirement, replacement computer equipment
 7   counts toward the investment requirement to the extent that the
 8   value of the replacement computer equipment exceeds the cost of
 9   the computer equipment so replaced, but, provided the taxpayer
10   otherwise qualifies for the exemption, the full value of the
11   replacement computer equipment is exempt from sales and use tax.
12   The running of the periods of limitation within which the
13   department may assess taxes provided pursuant to Section
14   12-54-85 is suspended during the time period beginning with the
15   taxpayer’s first use of this exemption and ending with the later of
16   the fifth anniversary of first use or notice to the department that the
17   taxpayer either has met or has not met the investment and job
18   requirements of this item;
19   (66) electricity used by a technology intensive facility as defined in
20   Section 12-6-3360(M)(14)(b) and qualifying for the sales tax
21   exemption provided pursuant to item (65) of this section, and the
22   equipment and raw materials including, without limitation, fuel
23   used by such qualifying facility to generate, transform, transmit,
24   distribute, or manage electricity for use in such a facility. The
25   running of the periods of limitation within which the department
26   may assess taxes pursuant to Section 12-54-85 is suspended during
27   the same time period it is suspended in item (65)(d) of this section.
28   (67) effective July 1, 2011, construction materials used in the
29   construction of a new or expanded single manufacturing or
30   distribution facility, or one that serves both purposes, with a capital
31   investment of at least one hundred million dollars in real and
32   personal property at a single site in the State over an
33   eighteen-month period, or effective November 1, 2009,
34   construction materials used in the construction of a new or
35   expanded single manufacturing facility where:
36   (i) the taxpayer invests at least seven hundred fifty million dollars
37   in real or personal property or both comprising or located at the
38   facility over a seven-year period; and
39   (ii) the taxpayer creates at least three thousand eight hundred
40   full-time new jobs at the facility during that seven-year period.
41   To qualify for this exemption, the taxpayer shall notify the
42   department before the first month it uses the exemption and shall
43   make the required investment over the applicable time period

     [4506]                            14
 1   beginning on the date provided by the taxpayer to the department
 2   in its notices. The taxpayer shall notify the department in writing
 3   that it has met the investment requirement or, after the expiration
 4   of the applicable time period, that it has not met the investment
 5   requirement. The department may assess any tax due on
 6   construction materials purchased tax free pursuant to this subitem
 7   but due the State as a result of the taxpayer’s failure to meet the
 8   investment requirement. The running of the periods of limitations
 9   for assessment of taxes provided in Section 12-54-85 is suspended
10   for the time period beginning with notice to the department before
11   the taxpayer uses the exemption and ending with notice to the
12   department that the taxpayer either has met or has not met the
13   investment requirement.
14   As used in this subitem, “taxpayer” includes a person who bears a
15   relationship to the taxpayer as described in Section 267(b) of the
16   Internal Revenue Code.
17   (68) any property sold to the public through a sheriff’s sale as
18   provided by law.
19   (69) (Reserved)
20   (70)(a) gold, silver, or platinum bullion, or any combination of this
21   bullion;
22   (b) coins that are or have been legal tender in the United States or
23   other jurisdiction; and
24   (c) currency.
25   The department shall prescribe documentation that must be
26   maintained by retailers claiming the exemption allowed by this
27   item. This documentation must be sufficient to identify each
28   individual sale for which the exemption is claimed.
29   (71) any device, equipment, or machinery operated by hydrogen or
30   fuel cells, any device, equipment, or machinery used to generate,
31   produce, or distribute hydrogen and designated specifically for
32   hydrogen applications or for fuel cell applications, and any device,
33   equipment, or machinery used predominantly for the
34   manufacturing of, or research and development involving
35   hydrogen or fuel cell technologies. For purposes of this item:
36   (a) “fuel cells” means a device that directly or indirectly creates
37   electricity using hydrogen (or hydrocarbon-rich fuel) and oxygen
38   through an electro-chemical process; and
39   (b) “research and development” means laboratory, scientific, or
40   experimental testing and development of hydrogen or fuel cell
41   technologies.     Research and development does not include
42   efficiency surveys, management studies, consumer surveys,


     [4506]                           15
 1   economic surveys, advertising, or promotion, or research in
 2   connection with literary, historical, or similar projects.
 3   (72) any building materials used to construct a new or renovated
 4   building or any machinery or equipment located in a research
 5   district. However, the amount of the sales tax that would be
 6   assessed without the exemption provided by this section must be
 7   invested by the taxpayer in hydrogen or fuel cell machinery or
 8   equipment located in the same research district within twenty-four
 9   months of the purchase of an exempt item.
10   “Research district” means land owned by the State, a county, or
11   other public entity that is designated as a research district by the
12   University of South Carolina, Clemson University, the Medical
13   University of South Carolina, South Carolina State University, or
14   the Savannah River National Laboratory.
15   (73) an amusement park ride and any parts, machinery, and
16   equipment used to assemble, operate, and make up an amusement
17   park ride or performance venue facility located in a qualifying
18   amusement park or theme park and any related or required
19   machinery, equipment, and fixtures located in the same qualifying
20   amusement park or theme park.
21   (a) To qualify for the exemption, the taxpayer shall meet the
22   investment and job requirements provided in subsubitem (i) of
23   subitem (b) over a five-year period beginning on the date of the
24   taxpayer’s first use of this exemption. The taxpayer shall notify
25   the Department of Revenue of its intent to qualify and use this
26   exemption and upon receipt of the notification, the department
27   shall issue an appropriate exemption certificate to the taxpayer to
28   be used for qualifying purposes under this item. Within six
29   months after the fifth anniversary of the taxpayer’s first use of this
30   exemption, the taxpayer shall notify the department, in writing,
31   that it has or has not met the investment and job requirements of
32   this item. If the taxpayer fails to meet the investment and job
33   requirements, the taxpayer shall pay to the State the amount of the
34   tax that would have been paid but for this exemption. The running
35   of the periods of limitations for assessment of taxes provided in
36   Section 12-54-85 is suspended for this time period beginning with
37   the taxpayer’s first use of this exemption and ending with notice to
38   the department that the taxpayer has or has not met the investment
39   and job requirements of this item.
40   (b) For purposes of this item:
41   (i) “Qualifying amusement park or theme park” means a park that
42   is constructed and operated by a taxpayer who makes a capital
43   investment of at least two hundred fifty million dollars at a single

     [4506]                            16
 1   site and creates at least two hundred fifty full-time jobs and five
 2   hundred part-time or seasonal jobs.
 3   (ii) “Related or required machinery, equipment, and fixtures”
 4   means an ancillary apparatus used for or in conjunction with an
 5   amusement park ride or performance venue facility, or both,
 6   including, but not limited to, any foundation, safety fencing and
 7   equipment, ticketing, monitoring device, computer equipment,
 8   lighting, music equipment, stage, queue area, housing for a ride,
 9   electrical equipment, power transformers, and signage.
10   (iii) “Performance venue facility” means a facility for a live
11   performance, nonlive performance, including any animatronics and
12   computer-generated performance, and firework, laser, or other
13   pyrotechnic show.
14   (iv) “Taxpayer” means a single taxpayer or, collectively, a group
15   of one or more affiliated taxpayers. An “affiliated taxpayer”
16   means a person or entity related to the taxpayer that is subject to
17   common operating control and that is operated as part of the same
18   system or enterprise. The taxpayer is not required to own a
19   majority of the voting stock of the affiliate.
20   (74) durable medical equipment and related supplies:
21   (a) as defined under federal and state Medicaid and Medicare laws;
22   (b) which is paid directly by funds of this State or the United States
23   under the Medicaid or Medicare programs, where state or federal
24   law or regulation authorizing the payment prohibits the payment of
25   the sale or use tax; and
26   (c) sold by a provider who holds a South Carolina retail sales
27   license and whose principal place of business is located in this
28   State.
29   (75) unprepared food that lawfully may be purchased with United
30   States Department of Agriculture food coupons. However, the
31   exemption allowed by this item applies only to the state sales and
32   use tax imposed pursuant to this chapter.
33   (76) sales of handguns as defined pursuant to Section 16-23-10(1),
34   rifles, and shotguns during the forty-eight hours of the Second
35   Amendment Weekend. For purposes of this item, the “Second
36   Amendment Weekend” begins at 12:01 a.m. on the Friday after
37   Thanksgiving and ends at twelve midnight the following Saturday.
38   (77) Energy efficient products purchased for noncommercial home
39   or personal use with a sales price of two thousand five hundred
40   dollars per product or less.
41   (a) For the purposes of this exemption, an “energy efficient
42   product” is any energy efficient product for noncommercial home
43   or personal use consisting of any dishwasher, clothes washer, air

     [4506]                            17
 1   conditioner, ceiling fan, fluorescent light bulb, dehumidifier,
 2   programmable thermostat, refrigerator, door, or window, the
 3   energy efficiency of which has been designated by the United
 4   States Environmental Protection Agency and the United States
 5   Department of Energy as meeting or exceeding each agency’s
 6   energy-saving efficiency requirements or which have been
 7   designated as meeting or exceeding such requirements under each
 8   agency’s ENERGY STAR program, and gas, oil, or propane water
 9   heaters with an energy factor of 0.80 or greater and electric water
10   heaters with an energy factor of 2.0 or greater.
11   (b) This exemption shall not apply to purchases of energy efficient
12   products purchased for trade, business, or resale.
13   (c) The exemption provided in this item applies only to sales
14   occurring during a period commencing at 12:01 a.m. on October 1,
15   2009, and concluding at 12:00 midnight on October 31, 2009,
16   (National “Energy Efficiency Month”) and every year thereafter
17   until 2019.
18   (d) Each year until 2019, the State Energy Office shall prepare an
19   annual report on the fiscal and energy impacts of the October first
20   through October thirty-first exemption and submit the report to the
21   General Assembly no later than January first of the following year.
22   (e) Beginning with the February 15, 2009, forecast by the Board of
23   Economic Advisors of annual general fund revenue growth for the
24   upcoming fiscal year, and annually after that, if the forecast of that
25   growth then and in any adjusted forecast made before the
26   beginning of the fiscal year equals at least five percent of the most
27   recent estimate by the board of general fund revenues for the
28   current fiscal year, then the exemption allowed by this item shall
29   be allowed for the applicable year. If the February fifteenth
30   forecast or adjusted forecast annual general fund revenue growth
31   for the upcoming fiscal year meets the requirement for the credit,
32   the board promptly shall certify this result in writing to the
33   department.
34   (78) machinery and equipment, building and other raw materials,
35   and electricity used in the operation of a facility owned by an
36   organization which qualifies as a tax exempt organization pursuant
37   to the Internal Revenue Code Section 501(c)(3) when the facility is
38   principally used for researching and testing the impact of such
39   natural hazards as wind, fire, water, earthquake, and hail on
40   building materials used in residential, commercial, and agricultural
41   buildings. To qualify for this exemption, the taxpayer shall notify
42   the department of its intent to qualify and shall invest at least
43   twenty million dollars in real or personal property at a single site in

     [4506]                            18
 1   this State over the three-year period beginning on the date
 2   provided by the taxpayer to the department in its notices. After the
 3   taxpayer notifies the department of its intent to qualify and use the
 4   exemption, the department shall issue an appropriate exemption
 5   certificate to the taxpayer to be used for qualifying purposes.
 6   Within six months of the third anniversary of the taxpayer’s first
 7   use of the exemption, the taxpayer shall notify the department in
 8   writing that it has met the twenty million dollar investment
 9   requirement or, that it has not met the twenty million dollar
10   investment requirement. The department may assess any tax due
11   on the machinery and equipment purchased tax free pursuant to
12   this item but due the State as a result of the taxpayer’s failure to
13   meet the twenty million dollar investment requirement. The
14   running of the periods of limitations for assessment of taxes
15   provided in Section 12-54-85 is suspended for the time period
16   beginning with notice to the department before the taxpayer uses
17   the exemption and ending with notice to the department that the
18   taxpayer either has met or has not met the twenty million dollar
19   investment requirement.”
20
21   SECTION 2. Article 1, Chapter 11, Title 11 of the 1976 Code is
22   amended by adding:
23
24      “Section 11-11-260. (A) Beginning in fiscal year 2012-2013,
25   from the excess sales tax revenue collected if Section 12-36-2120
26   existed as it existed on June 30, 2012, each year in the annual
27   appropriations act and as the General Assembly may provide by
28   law, the General Assembly shall appropriate the following
29   amounts for the following purposes:
30        (1) one billion dollars which must be credited as provided in
31   Section 59-21-1010(A);
32        (2) two hundred million dollars to the State Department of
33   Education to be treated as a direct pass through to at-risk,
34   impoverished, underperforming, or rural public schools;
35        (3) one hundred million dollars to the State Department of
36   Education for public charter schools to ensure that school districts
37   across the state have public choice options;
38        (4) one hundred million dollars for private-public sector
39   partnerships and alliances to offer tax incentives for small
40   businesses and large corporations to invest in communities and
41   schools via mentoring and leadership programs, health and
42   wellness initiatives, technology and innovation, community
43   technology centers, per pupil resources such as laptop computers,

     [4506]                           19
 1   teacher recruitment and retention, teacher incentives, innovative
 2   programs, transportation upgrades, and capital improvements;
 3         (5) two hundred million dollars for small business health
 4   care tax incentives that entitles small businesses with no more than
 5   twenty-five full-time employees that provide health insurance
 6   coverage for their employees, to a fifty percent tax credit that will
 7   help the small business reinvest in the business while offsetting
 8   significant health care costs;
 9         (6) fifty million dollars for a revolving fund for small
10   businesses that may be applied for to aid with costs associated with
11   start-up, growth and expansion, improvements and enhancements,
12   and to help spur economic development in this state;
13         (7) to the extent allowed by law, fifty million dollars for
14   public and private South Carolina colleges and universities that
15   may be used to launch or expand innovative programs with a
16   statewide impact, including, but not limited to, arts, sciences,
17   energy, technology, humanities, health and wellness, economic
18   development, and infrastructure;
19         (8) twenty million dollars to aid small businesses that
20   produce, build, or develop environmentally conscious products;
21         (9) twenty million dollars to the Department of Health and
22   Environmental Control for sickle cell anemia public education and
23   awareness programs, sports and physical activity based testing and
24   assessments, as well as treatment centers and medical assistance
25   and resources for self-employed, unemployed, uninsured and
26   underinsured;
27         (10) twenty million dollars to the Department of Health and
28   Environmental Control for HIV/AIDS public education and
29   awareness programs, as well as treatment centers and medical
30   assistance and resources for self-employed, unemployed,
31   uninsured and underinsured;
32         (11) twenty million dollars to the Department of Health and
33   Environmental Control for cancer research, education and
34   awareness programs, as well as treatment and medical assistance
35   and resources for self-employed, unemployed, uninsured and
36   underinsured;
37         (12) twenty million dollars to the Department of Health and
38   Environmental Control for diabetes research, testing and
39   prevention, education and wellness programs, as well as treatment
40   and medical assistance and resources for self-employed,
41   unemployed, uninsured and underinsured;
42         (13) twenty-five million dollars to the Commission on
43   Prosecution Coordination for domestic violence prevention,

     [4506]                           20
 1   resources, education and awareness, transition to work initiatives,
 2   counseling, and legal assistance;
 3        (14) twenty-five million dollars to the State Infrastructure
 4   Bank for infrastructure development that is accessible statewide
 5   with an emphasis on the fastest growing counties or areas where
 6   growth and development may be equal to or already exceeding
 7   infrastructure;
 8        (15) twenty million dollars to the Department of Health and
 9   Environmental Control for health and wellness programs in public
10   schools, including, but not limited to, education and awareness,
11   disease prevention, obesity prevention, and healthy foods,
12   including school snacks and lunches;
13        (16) thirty million dollars to the Department of Public Safety
14   for public safety initiatives, including, but not limited to,
15   community-based incentive programs, innovative resources,
16   equipment and technology for law enforcement agencies and
17   officers across the state.
18      (B)(1) The appropriations contained in subsection (A) are not
19   intended to replace or supplant appropriations to the agencies or
20   appropriations for the same purpose.
21        (2) Any state agency receiving an appropriation pursuant to
22   subsection (A) must expend the monies in strict accordance with
23   the law.
24      (C) In any year in which the excess sales tax revenue collected
25   if Section 12-36-2120 existed as it existed on June 30, 2012, is not
26   fully appropriated in subsection (A), as the General Assembly
27   provides by law, the amount not appropriated shall be deposited in
28   an account separate from the contingency reserve fund, the general
29   reserve fund, and the capital reserve fund, to prevent future
30   deficits.”
31
32   SECTION 3. This act takes effect on July 1, 2012.
33                            ----XX----
34




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