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9 A BILL
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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;
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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
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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;
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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
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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;
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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
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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.
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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,
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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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