View From the Dome (May 21, 2021): General Fund Revenues are $412M Above Expected Collections, Per BEA Report

As part of SCACPA’s dedication to Advocacy on behalf of the CPA Profession, here is your weekly update of actions being taken during the 124th Legislative Session, prepared in cooperation with our lobbying partner, Copper Dome Strategies.

Friday, May 21, 2021

After adjourning Sine Die on May 13, the General Assembly will return to session in the coming weeks for unfinished business, including finalizing the state budget, redistricting and appropriating funds from the federal American Rescue Plan Act.

The Tax Conformity bill relating to the application of the Internal Revenue Code to state income tax laws was signed into law Tuesday.

Despite positive economic trends, the State Board of Economic Advisors did not change their revenue estimate as underlying conditions and assumptions are unchanged from April.

All federal, pandemic-related unemployment benefit programs will be terminated statewide effective June 30. The termination is due to an unprecedented workforce shortage, including those in the hospitality, tourism, manufacturing and healthcare sectors. For more details, click here.

The “South Carolina Electronic Notary Public Act,” which establishes procedures for electronic notaries public, was signed into law.

COVID Vaccination Reminder: All South Carolinians aged 12 and older are eligible to receive COVID-19 vaccinations. Online appointments can now be made at scdhec.gov/vaxlocator. For more information from DHEC on the virus, click here. Stay safe!

TAX

H.4017 (Reps. Simrill and Pope) tax conformity relating to the application of the Internal Revenue Code to state income tax laws was signed into law Tuesday. The law decouples with 10 federal provisions. It also exempts the first $10,200 of federal unemployment payments from income tax. The law also authorizes $61,300,000 from the federal American Rescue Plan Act to the state general fund to account for the income tax exemption.

The following bills were also signed into law:

S.527 (Senator Alexander) defines “legally separated” for the purposes of imposition of the property tax so that each spouse can claim the 4% assessment ratio.

S.609 (Senator Alexander) authorizes state agencies and political subdivisions to conduct criminal background checks on their employees and contractors that have access to federal tax information.

S.677 (Senator Davis) provides for the allocation of a tax credit or unused credit amount carried forward that is earned by a partnership or limited liability company taxed as a partnership.

S.627 (Senators Bennett, Adams, Kimbrell, M. Johnson, Davis and others) relating to income tax rates for pass-through trade and business income and “S” corporations at the entity level (SALT Limitations). It creates an election for the business to pay the tax at the entity level, making it a direct tax and circumventing the current $10,000 limit on state and local taxes on the personal return. It also cleans up some language, including changing electing entity to “qualified” entity.

S.689 (Senators Leatherman, Massey, Malloy and others), a Joint Resolution that extends the income tax filing due date for individuals to the same date as federal returns are due and S.463 (Senators Alexander, Cromer, Grooms, Scott and Loftis) removes the expiration date for tax credits for the purchase of geothermal machinery and equipment.

H.3899 (Reps. Elliott, G. R. Smith, Erickson and others) Exceptional needs child tax credit.

H.3482 (Reps. Stavrinakis and Kirby) authorizes a county to establish an alternative payment schedule for property tax.

S.436 (Senator Cromer) deletes an aggregate credit provision and sets an annual limit for community development tax credits. The law sunsets in 2023.

BOARD OF ECONOMIC ADVISORS

The State Board of Economic Advisors (BEA) met Thursday and despite positive economic trends did not change the revenue estimate as underlying conditions and assumptions are unchanged from April. General Fund revenues are $412 million above expected collections through April and corporate filings had a record high in April. The impact of individual tax filings being delayed until May 17 on refunds and non-witholdings is yet to be determined. The strong collections may result in a larger surplus for the current fiscal year.

Legislators have $385 million in new recurring revenue to appropriate for the next fiscal year beginning July 1, 2021. One-time surplus revenue is now estimated to be $1.334 billion. The BEA is statutorily charged to provide the General Assembly with the official revenue estimate for lawmakers to draft the annual state budget. For more information, click here.

SINE DIE ADJOURNMENT

The General Assembly has adopted H.4285 (Reps. Lucas, Simrill and Rutherford) a Concurrent Resolution to allow the bodies to meet post adjournment at the call of the President Pro Tem of the Senate and the Speaker of the House of Representatives to consider certain specified matters, including the state budget. The schedule is as follows:

May 24-28 – Ways and Means Budget Subcommittees

June 1-3 – Full Ways and Means Committee deliberations

June 8-10 – House Floor Budget deliberations

June 14-18 – Conference Committee meets

June 21-23 – Conference Report adopted by both chambers

June 29 – Address gubernatorial vetoes

The General Assembly will also meet again in the fall to address redistricting and to appropriate the $2.1 billion in federal funds from the American Rescue Plan Act and the $525 million from the Savannah River Site (SRS) lawsuit settlement.

ENERGY/UTILITIES

S.304 (Senators Climer and Fanning) relating to electric vehicle charging stations when a person or corporation using an electric vehicle charging station is not an electric utility. The bill provides that any increase in customer demand or energy consumption associated with transportation electrification shall not constitute revenues for an electrical utility.

The bill requires the Department of Revenue to study the effects of electric vehicles on the collection of the state’s motor fuel tax. The bill was signed into law Tuesday.

FIREARMS

H.3094 (Reps. B. Cox, White, Lucas, Burns and others) that enacts the “Open Carry With Training Act” was signed into law Tuesday. The bill allows holders of concealed weapons permits to carry openly and eliminates the necessity to conceal the weapon. Business owners and private employers may post signs prohibiting or allowing weapons on their premises. It remains unlawful to carry a weapon into numerous places, including correctional facilities, courthouses and daycare facilities.

JUDICIAL/LEGAL

S.631 (Senator Talley) that enacts the “South Carolina Electronic Notary Public Act” was signed into law on Tuesday. It establishes procedures for electronic notaries public and establishes fees and training requirements. Electronic notaries would be optional and could not be used for wills and trusts. This act takes effect upon approval by the governor. Electronic online notary public applications will not be accepted for processing until the administrative rules are in effect and vendors of technology are approved by the Secretary of State.

HIGHER EDUCATION

S.231 (Senators Shealy, McLeod and Matthews) that enacts the “Student Identification Card Suicide Prevention Act” was signed into law Tuesday. The bill requires public schools and public and private institutions of higher learning to add the telephone number for the National Suicide Prevention Hotline to student identification cards. This act takes effect on July 1, 2022.

HEALTHCARE

S.503 (Senator Hutto) that would allow Physician’s Assistants (PAs) and Advanced Practice Registered Nurses (APRNs) to issue orders for certain home health services was signed into law on Tuesday. The act takes effect 60 days after approval of the governor.

S.455 (Senator Davis) to create an additional category for temporary licensure for graduate nurses was signed into law on Tuesday and takes effect immediately.

ALCOHOL

S.619 (Senators Rankin, Leatherman, Hutto, Fanning and Climer) known as the “Gallo bill” was signed into law on Tuesday. California-based E&J Gallo Winery is planning a $400 million economic development deal expected to bring nearly 500 jobs to Chester County and was seeking this legislation to allow for wine tastings at stand-alone facilities in tourist areas.

H.4006 (Reps. G. M. Smith and Weeks) that extends an increased limit for certain off-premise alcohol sales by breweries was signed into law on Tuesday. The provision was enacted into law last year and this bill extends it until May 31, 2022.

ANIMAL WELFARE

H.3539 (Reps. Davis and Martin) requires an official form of identification for the transportation on a public road and the release of live swine. The bill was signed into law on Tuesday.

UP NEXT

Several subcommittees of the House Ways and Means Committee will meet to hear from state agencies as they craft their revised version of the state budget.

REAR VIEWS 2021

Look to SCACPA’s “View from the Dome” updates on the SCACPA website and our social media every week during the legislative session. Sine Die adjournment is scheduled for May 13. You can always stay up-to-date with SCACPA’s respective blog pages for Governmental Topics, Legislative Topics and Regulatory Topics.

May 14: Conformity Bill Awaits Gov.’s Signature; Decouples with 10 Federal Provisions, Exempts $10,200 of Unemployment Payments

May 7: Tax Conformity Bill Reaches Calendar for Senate Readings

April 30: With Two Weeks Left in Legislative Session, Here are 10 Tax Bills About to be Considered by the Full SC House Ways and Means Committee

April 23: House is Signaling its Approval of Senate’s COVID-19 Liability Safe Harbor Act

April 16: Crossover Deadline Passes, Senate Finance Committee Starts Draft of New $31B State Budget

April 9: Conformity Moves Through House, with Tax Break for $10,000 in Unemployment Benefits

April 2: Senate Approves Bill Concerning Attorney’s Fees Connected to DOR Actions

March 26: House Receives Senate’s Bill for Pass-Through Trade and Business

March 19: Conformity Begins its Journey with Approval from a House Ways and Means Subcommittee

March 12: Senate Finance Committee to Consider a Pass-Through Trade and Business Bill

March 5: House Ways and Means Committee is Cautious With its Version of State Budget

Feb. 26: Senate Approves “COVID-19 Liability Safe Harbor Act,” Bill Now Heads to House