H. 3567–SENATE AMENDMENTS AMENDED AND RETURNED TO THE SENATE
The Senate Amendments to the following Bill were taken up for consideration:
H. 3567 <http://www.scstatehouse.net/cgi-bin/web_bh10.exe?bill1=3567&session=117> ( Word <http://www.scstatehouse.net/sess117_2007-2008/bills/3567.doc> version) — Reps. Rice, Gullick, Cotty and Agnew: A BILL TO AMEND SECTION 12-21-620, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TAXATION ON CIGARETTES, SO AS TO INCREASE THE AMOUNT OF TAX ON EACH CIGARETTE FROM THREE AND ONE-HALF MILLS TO TWO CENTS; TO ADD SECTION 44-6-157 SO AS TO PROVIDE THAT THE REVENUE GENERATED FROM THE TAXATION ON CIGARETTES MUST BE USED TO EXPAND MEDICAID COVERAGE TO CHILDREN EIGHTEEN YEARS OF AGE AND YOUNGER WHOSE FAMILY INCOME DOES NOT EXCEED TWO HUNDRED PERCENT OF THE FEDERAL POVERTY LEVEL; AND TO CREATE THE HEALTH CARE TRUST FUND TO PROVIDE MEDICAID BENEFITS TO INDIVIDUALS WHOSE FAMILY INCOME DOES NOT EXCEED ONE HUNDRED PERCENT OF THE FEDERAL POVERTY LEVEL AND WHO ARE UNINSURED AND TO PROVIDE THAT REVENUE IN EXCESS OF THE CHILDREN’S MEDICAID COVERAGE FROM THE CIGARETTE TAX MUST BE CREDITED TO THE HEALTH CARE TRUST FUND; AND TO AMEND SECTION 12-36-910, AS AMENDED, RELATING TO SALES TAXES GENERALLY, SO AS TO PROVIDE THAT AS OF JULY 1, 2009, THE THREE PERCENT SALES TAX IS ELIMINATED ON UNPREPARED FOOD WHICH LAWFULLY MAY BE PURCHASED WITH UNITED STATES DEPARTMENT OF AGRICULTURE FOOD COUPONS, TO PROVIDE FOR CERTAIN GENERAL FUND TRANSFERS TO THE EDUCATION IMPROVEMENT ACT FUND FOR EACH FISCAL YEAR TO OFFSET EIA REVENUES LOST AS A RESULT OF THE LOSS OF SALES TAX ON THE SALE OF UNPREPARED FOOD, AND TO REDUCE THE SALES TAX ON UNPREPARED FOOD TO TWO PERCENT AS OF JULY 1, 2007, AND ONE PERCENT AS OF JULY 1, 2008.
Rep. SHOOPMAN moved to recommit the Bill to the Committee on Ways and Means.
Rep. OTT moved to table the motion.
Rep. MULVANEY demanded the yeas and nays which were taken, resulting as follows:
Yeas 84; Nays 31
Those who voted in the affirmative are:
Alexander Allen Anderson
Anthony Bales Ballentine
Bannister Bingham Bowen
Brady Branham Brantley
Breeland G. Brown R. Brown
Clyburn Cobb-Hunter Coleman
Cotty Crawford Dantzler
Davenport Delleney Erickson
Frye Funderburk Govan
Gullick Hagood Harrison
Hart Harvin Haskins
Hayes Herbkersman Hiott
Hodges Hosey Howard
Huggins Hutson Jefferson
Jennings Kelly Kennedy
Knight Limehouse Lucas
Mack Mahaffey McLeod
Miller Mitchell Moss
J. H. Neal J. M. Neal Neilson
Ott Owens Parks
Phillips Pinson E. H. Pitts
Rice Rutherford Scarborough
Scott Sellers Simrill
Skelton F. N. Smith G. M. Smith
J. E. Smith J. R. Smith Spires
Stavrinakis Stewart Taylor
Toole Vick Weeks
Whitmire Williams Young
Total–84
Those who voted in the negative are:
Barfield Battle Bedingfield
Cato Chalk Clemmons
Cooper Duncan Edge
Gambrell Haley Hardwick
Harrell Kirsh Leach
Littlejohn Loftis Lowe
Mulvaney Perry M. A. Pitts
Sandifer Shoopman D. C. Smith
G. R. Smith Talley Thompson
Umphlett Walker White
Witherspoon
Total–31
So, the motion to recommit the Bill was tabled.
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Reps. HARRELL and COOPER proposed the following Amendment No. 4A (Doc Name COUNCIL\BBM\10648HTC08), which was tabled:
Amend the bill, as and if amended, by striking the remainder of the bill after line 12 beginning on page 2 and inserting:
/ (B) For all purposes of reporting, payment, collection, and enforcement, the surtax imposed by this section is deemed to be imposed pursuant to Section 12-21-620.
(C) For purposes of this section and Section 12-21-620(2), ‘cigarette’ means:
(1) any roll for smoking containing tobacco wrapped in paper or in any substance other than a tobacco leaf; or
(2) any roll for smoking containing tobacco, wrapped in any substance, weighing three pounds per thousand or less, however labeled or named, which because of its appearance, size, type of tobacco used in the filler, or its packaging, pricing, marketing, or labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in item (1). However, such a roll is not considered to be a cigarette for purposes of this section and Section 12-21-620(2) if the roll is not treated like a cigarette for federal excise tax purposes under the applicable federal law in effect on July 1, 2008.
(D) Notwithstanding another provision of law providing for the crediting of the revenues of license or other taxes, the revenue of the surtax imposed pursuant to this section must be credited to the general fund of the State and used to replace income and sales tax revenues not collected in a fiscal year in the following amounts:
(1) the amount of state sales tax revenue as estimated by the Board of Economic Advisors not collected because of:
(a) the sales tax exemption allowed pursuant to Section 12-36-2120(76); and
(b) the exemption allowed pursuant to Section 12-36-2120(74) reduced by the amount of sales tax revenue not collected pursuant to that exemption as it applied in fiscal year 2007-2008.
(2) five million dollars for the smoking cessation income tax credit pursuant to Section 12-6-3671 with any unused revenue added to the amounts available pursuant to item (4) of this subsection;
(3) four million dollars for cancer screening with any unused revenue added to the amounts available pursuant to item (4) of this subsection;
(4) the balance of the revenue, as estimated by the Board of Economic Advisors, for the small business health insurance income tax credit allowed pursuant to Section 12-6-3673.
(E) Revenue of the tax imposed pursuant to subsection (A) replacing sales tax revenue must be credited as sales tax revenues are credited by law."
SECTION 2. Section 1 of Act 99 of 2007 is amended by deleting subsections B and C which read:
B. Notwithstanding the sales and use rates imposed pursuant to Chapter 36, Title 12 of the 1976 Code, the rate of tax imposed pursuant to that chapter on the gross proceeds of sales of items described in subsection A of this section is five and one-half percent for such sales from July 1, 2007.
C. Beginning with the February 15, 2008, forecast by the Board of Economic Advisors of annual general fund revenue growth for the upcoming fiscal year, and annually thereafter, if the forecast of that growth equals at least five percent of the most recent estimate by the board of general fund revenues for the current fiscal year, then the applicable state sales and use tax rate imposed on items described in subsection A. of this section is reduced, effective the following July first, by one and one-half percent in the first year and by one percent every year thereafter. That reduced rate applies until a subsequent reduction takes effect. If the February fifteenth forecast meets the requirement for a rate reduction, the board promptly shall certify this result in writing to the Department of Revenue. On the July first that the rate attains zero, the provisions of subsections B. and C. of this section no longer apply.
SECTION 3. Section 12-36-2120 of the 1976 Code, is amended by adding a new item (76) to read:
"(76) the gross proceeds of the sale of legend or prescription drugs or medicines, legend or prescription biologicals, and legend or prescription bioabsorbable implant devices dispensed or administered to a patient or otherwise used in the treatment of a patient in the office of a medical doctor licensed pursuant to Chapter 47 of Title 40 or of a dentist licensed pursuant to Chapter 15 of Title 40, and not otherwise exempted."
SECTION 4. Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:
"Section 12-6-3671. (A) There is allowed as a refundable credit against the income tax liability of a resident individual the expenses incurred by the taxpayer in a taxable year for participating in a smoking cessation program undertaken by the taxpayer prescribed by and under the supervision of a physician licensed pursuant to Chapter 47 of Title 40, to include physicians fees and costs of FDA approved smoking cessation therapies and other smoking cessation methods approved by the supervising physician. Only a taxpayer who has expenses for a smoking cessation program no portion of which is paid or covered by a third party payer, is eligible for this credit. The Department of Revenue shall prescribe a form on which this credit must be claimed that must be filed with the taxpayer’s South Carolina individual income tax return. The form must require that information and documentation determined necessary by the department for the administration of this credit.
(B) The credit allowed pursuant to this section is not included in the calculation of the taxpayer’s income tax liability on the return, but is instead calculated by the Department of Revenue after the close of the filing season and paid to the taxpayer as provided in subsection (C).
(C) Each eligible taxpayer incurring smoking cessation expenses in any year is entitled to a credit for that year in the amount of three hundred dollars or the amount of his expenses, whichever is less. If the amount available to fund this credit as provided by law in any year is not sufficient to give all eligible taxpayers their full credit, then the Department of Revenue shall proportionately reduce these credits accordingly. If the amount available to fund these credits as provided by law in any year exceeds the total amount of the credits claimed by all taxpayers as provided above, then any taxpayer with expenses over three hundred dollars for that year is entitled to an additional credit as determined by the department equal to his excess expenses stated as a percentage of all excess expenses times the available funds.
Section 12-6-3672. (A) There is allowed as a refundable credit against the income tax liability of a resident individual the costs incurred by the taxpayer in a taxable year for cancer screening. Only a taxpayer who has expenses for such a screening no portion of which is paid or covered by a third party payer, is eligible for this credit. The Department of Revenue shall prescribe a form on which this credit must be claimed that must be filed with the taxpayer’s South Carolina individual income tax return. The form must require that information and documentation determined necessary by the department for the administration of this credit.
(B) The credit allowed pursuant to this section is not included in the calculation of the taxpayer’s income tax liability on the return, but is instead calculated by the Department of Revenue after the close of the filing season and paid to the taxpayer as provided in subsection (C).
(C) Each eligible taxpayer incurring cancer screening expenses in any year is entitled to a credit for that year in the amount of three hundred dollars for each screening or the amount of the expenses, whichever is less. If the amount available to fund this credit as provided by law in any year is not sufficient to give all eligible taxpayers their full credit, then the Department of Revenue shall proportionately reduce these credits accordingly. If the amount available to fund these credits as provided by law in any year exceeds the total amount of the credits claimed by all taxpayers as provided above, then any taxpayer with expenses over three hundred dollars for that year is entitled to an additional credit as determined by the department equal to his excess expenses stated as a percentage of all excess expenses times the available funds.
Section 12-6-3673. (A) As used in this section, a ‘qualifying small business taxpayer’ is a taxpayer resident and domiciled in this State with fewer than twenty employees, all of whom are based in this State claiming a federal income deduction for employee health insurance premiums on all employees.
(B) A qualifying small business taxpayer is allowed a refundable state income tax credit as provided in subsection (C) against the tax imposed pursuant to this chapter for health insurance premiums deducted by the taxpayer on the taxpayer’s federal income tax return. The Department of Revenue shall prescribe a form on which this credit must be claimed that must be filed with the taxpayer’s South Carolina individual income tax return. The form must require that information and documentation determined necessary by the department for the administration of this credit.
The credit allowed pursuant to this section is not included in the calculation of the taxpayer’s income tax liability on the return, but is instead calculated by the Department of Revenue after the close of the filing season and paid to the taxpayer as provided in subsection (C).
(C) Each eligible taxpayer deducting health insurance premium expenses in any year is entitled to a credit for that year in the amount of three hundred dollars or the amount of the expenses, whichever is less for each employee covered. If the amount available to fund this credit as provided by law in any year is not sufficient to give all eligible taxpayers their full credit, then the Department of Revenue shall proportionately reduce these credits accordingly. If the amount available to fund these credits as provided by law in any year exceeds the total amount of the credits claimed by all taxpayers as provided above, then any taxpayer with expenses over three hundred dollars for that year is entitled to an additional credit as determined by the department equal to his excess expenses stated as a percentage of all excess expenses times the available funds."
SECTION 5. This act takes effect upon approval by the Governor, and where not otherwise provided, sales tax provisions in this act take effect July 1, 2008, and income tax provisions in this act apply for taxable years beginning after 2007. /
Renumber sections to conform.
Amend title to conform.
Rep. COOPER explained the amendment.
Rep. SCOTT moved to table the amendment.
Rep. COBB-HUNTER demanded the yeas and nays which were taken, resulting as follows:
Yeas 60; Nays 58
Those who voted in the affirmative are:
Alexander Allen Anderson
Anthony Bales Battle
Bowen Bowers Branham
Brantley Breeland G. Brown
R. Brown Clyburn Cobb-Hunter
Coleman Cotty Dantzler
Davenport Funderburk Govan
Gullick Haley Hart
Harvin Hayes Hodges
Hosey Howard Jefferson
Jennings Kennedy Knight
Mack Mahaffey McLeod
Miller Mitchell Moss
J. H. Neal J. M. Neal Neilson
Ott Owens Parks
Phillips Pinson Rice
Rutherford Sandifer Scott
Sellers D. C. Smith F. N. Smith
J. E. Smith Stavrinakis Vick
Walker Weeks Williams
Total–60
Those who voted in the negative are:
Ballentine Bannister Barfield
Bedingfield Bingham Brady
Cato Chalk Clemmons
Cooper Crawford Daning
Delleney Duncan Edge
Erickson Frye Gambrell
Hagood Hardwick Harrell
Harrison Haskins Herbkersman
Hiott Huggins Hutson
Kelly Kirsh Leach
Limehouse Littlejohn Loftis
Lowe Lucas Merrill
Mulvaney Perry E. H. Pitts
M. A. Pitts Scarborough Shoopman
Simrill Skelton G. R. Smith
J. R. Smith Spires Stewart
Talley Taylor Thompson
Toole Umphlett Viers
White Whitmire Witherspoon
Young
Total–58
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