Propane Sales Tax by nzo10276

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									BIL:     3383
TYP:     General Bill GB
INB:     House
IND:     20010130
PSP:     Coates
SPO:     Coates, Allison, Barfield, Barrett, Battle, Bingham, Bowers, Harvin,
         Hayes, J. Hines, Koon, Lucas, McGee, Owens, Sandifer, Scarborough,
         Sharpe, Sheheen, Sinclair, G.M. Smith, J.R. Smith, Talley, Thompson,
         Walker, Weeks, Witherspoon, White
DDN:     l:\council\bills\swb\5116djc01.doc
RBY:     Senate
COM:     Finance Committee 06 SF
SUB:     Sales tax exemption on sale of propane gas when used for certain
         agriculture purposes; Fuel, Taxation




HST:

Body     Date       Action Description                        Com     Leg Involved
______   ________   _______________________________________   _______ ____________
Senate   20010522   Introduced, read first time,              06 SF
                    referred to Committee
House    20010518   Read third time, sent to Senate
House    20010517   Read second time, unanimous
                    consent for third reading on
                    Friday, 20010518
House    20010517   Co-Sponsor added (Rule 5.2) by Rep.                White
House    20010516   Committee report: Favorable               30 HWM
House    20010130   Introduced, read first time,              30 HWM
                    referred to Committee


Versions of This Bill


Revised on 20010516


TXT:
 1   Indicates Matter Stricken
 2   Indicates New Matter
 3
 4   COMMITTEE REPORT
 5   May 16, 2001
 6
 7                                                       H. 3383
 8
 9   Introduced by Reps. Coates, Allison, Barfield, Barrett, Battle,
10   Bingham, Bowers, Harvin, Hayes, J. Hines, Koon, Lucas, McGee,
11   Owens, Sandifer, Scarborough, Sharpe, Sheheen, Sinclair,
12   G.M. Smith, J.R. Smith, Talley, Thompson, Walker, Weeks and
13   Witherspoon
14
15   S. Printed 5/16/01--H.
16   Read the first time January 30, 2001.
17
18
19            THE COMMITTEE ON WAYS AND MEANS
20      To whom was referred a Bill (H. 3383) to amend Section
21   12-36-2120, as amended, Code of Laws of South Carolina, 1976,
22   relating to sales tax exemptions generally including the exemption
23   for the sale of natural gas, etc., respectfully
24                                  REPORT:
25      That they have duly and carefully considered the same and
26   recommend that the same do pass:
27
28   ROBERT W. HARRELL, JR. for Committee.
29
30
31         STATEMENT OF ESTIMATED FISCAL IMPACT
32   REVENUE IMPACT1/
33     This bill is expected to reduce general fund sales and use tax
34   revenue by an estimated $142,080 in FY2001-02. Of this amount,
35   general fund sales and use tax revenue would be reduced by
36   $113,664 and EIA funds would be reduced by $28,416 in FY2001-
37   02.
38   Explanation
39     Current law exempts natural and liquefied petroleum gas used to
40   produce poultry, livestock, swine, and milk. Natural and liquefied
41   petroleum gas used to cure tobacco is also exempt from sales and
42   use tax liability. This bill would exempt propane gas from sales

     [3383-1]
 1   and use tax used to heat greenhouses that grow agricultural plants
 2   that will eventually be replanted. These plants could include
 3   tobacco transplants and various horticultural products grown in the
 4   state.     Based on conversations with Clemson University
 5   Agricultural Extension Service officials, approximately 90 percent
 6   of the state’s tobacco harvests now originate from greenhouses as
 7   opposed to outdoor plant beds. Based on data from the South
 8   Carolina Agricultural Statistics Service and conversations with
 9   Clemson University, tobacco farmers in the state can expect to
10   harvest an estimated 30,600 acres of tobacco in 2001-2002 that
11   originate from greenhouse transplants. According to tobacco
12   production cost estimates compiled by Clemson University, the
13   state’s tobacco farmers utilizing greenhouse technology can expect
14   to consume approximately 581,400 gallons of propane gas to heat
15   their greenhouses at an average price of $1.15 per gallon in 2001-
16   2002.      Based on conversations with Clemson University,
17   greenhouses used in the production of horticultural products
18   require more than three times the propane to produce their harvests
19   compared to the propane required by tobacco farmers for similar
20   purposes, or 1,889,550 gallons. Multiplying the average cost of
21   gas per gallon of propane by the gallons of propane estimated to be
22   consumed by tobacco farmers and horticulturists to grow their
23   harvests in 2001-2002, and applying the five percent sales tax
24   reduces General Fund sales and use tax revenue by an estimated
25   $142,080 in FY2001-02. Of this amount, General Fund sales and
26   use tax revenue would be reduced by $113,664 and EIA funds
27   would be reduced by $28,416 in FY2001-02.
28
29                                           Approved By:
30                                           William C. Gillespie
31                                           Board of Economic Advisors
32
33   1/ This statement meets the requirement of Section 2-7-71 for a state revenue
34   impact, Section 2-7-76 for a local revenue impact, and Section 6-1-85(B) for an
35   estimate of the shift in local property tax incidence.




     [3383-2]
 1
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 8
 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   TAX EXEMPTIONS GENERALLY INCLUDING THE
14   EXEMPTION FOR THE SALE OF NATURAL GAS, LP GAS,
15   AND    ELECTRICITY    TO      PRODUCE    CERTAIN
16   AGRICULTURAL PRODUCTS OR ANIMALS SO AS TO
17   PROVIDE THAT SUCH EXEMPTION ALSO INCLUDES THE
18   SALE OF PROPANE GAS FOR THIS PURPOSE AND TO
19   PROVIDE THAT THE SALE OF THESE GASES OR
20   ELECTRICITY TO PRODUCE AGRICULTURAL PLANTS IN
21   GREENHOUSES THAT WILL SUBSEQUENTLY BE
22   REPLANTED IS ALSO EXEMPT FROM THE SALES TAX.
23
24   Be it enacted by the General Assembly of the State of South
25   Carolina:
26
27   SECTION 1. Section 12-36-2120(32) of the 1976 Code, as last
28   amended by Act 171 of 1991, is further amended to read:
29
30      “(32) natural, propane, and liquefied petroleum gas and
31   electricity used exclusively in the production of poultry, livestock,
32   swine, and milk and to produce agricultural plants in greenhouses
33   that subsequently will be replanted;”
34
35   SECTION 2. This act takes effect upon approval by the Governor.
36                            ----XX----




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