What CPI increase did South Carolina use to limit local general-operating millage increases in 2006?

Plain-English summary

The CPI-based limit used for South Carolina local general-operating millage increases in 2006 was 3.4%. The Department used the average increase in the Consumer Price Index for All Urban Consumers (CPI-U), published by the U.S. Department of Labor's Bureau of Labor Statistics. It states that the average CPI-U increase for calendar year 2005 was 3.4%.

Under § 6-1-320(A), a local governing body generally could increase its millage rate for general operating purposes above the preceding year's rate only by the prior calendar year's average CPI increase. Accordingly, the general-operating rate determined for 2006 could be increased by 3.4% over the rate determined for 2005.

There was a different starting point in a reassessment year: the rollback millage calculated under § 12-37-251(E) had to be used instead of the previous year's millage rate.

What this means for you

This letter is a historical calculation notice for local governments and property-tax practitioners. For 2006, use 3.4% as the CPI component of the general-operating millage limit, while applying rollback millage in a reassessment year.

Common questions

Q: What CPI measure did the Department use?
A: The average increase in the CPI-U for the January-through-December 2005 period.

Q: What was the announced percentage?
A: 3.4% for the 2006 general-operating millage calculation.

Q: Does the prior year's millage always supply the starting rate?
A: No. In a reassessment year, the statute requires rollback millage under § 12-37-251(E) instead.

Subject

Consumer Price Index for Millage Calculation

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL06-2.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 12265, Columbia, South Carolina 29211
Website Address: http://www.sctax.org

SC INFORMATION LETTER #06-2

SUBJECT:

Consumer Price Index for Millage Calculation
(Property Tax)

DATE:

February 7, 2006

SUPERSEDES:

All previous documents and oral directives that conflict with this
bulletin

REFERENCE:

S. C. Code Ann. Section 6-1-320(A)(2005 Supp.)
Act No. 145 of 2005

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2000)
S. C. Code Ann. Section 1-23-10(4) (2005 Supp.)
SC Revenue Procedure #05-2

SCOPE:

An Information Letter is a written statement issued to the public
by the Department to announce general information useful in
complying with the laws administered by the Department. An
Information Letter has no precedential value.

Section 6-1-320(A) of the South Carolina Code of Laws (“Code”) reads as follows:
Notwithstanding Section 12-37-251(E), a local governing body may increase the
millage rate imposed for general operating purposes above the rate imposed for
such purposes for the preceding tax year only to the extent of the increase in the
average of the twelve monthly consumer price indexes for the most recent twelvemonth period consisting of January through December of the preceding calendar
year. However, in the year in which a reassessment program is implemented, the
rollback millage, as calculated pursuant to Section 12-37-251(E), must be used in
lieu of the previous year’s millage rate.
For purposes of the above section, the Department of Revenue uses the average increase in
the Consumer Price Index for All Urban Consumers (CPI-U) which is published by the U.S.
Department of Labor’s Bureau of Statistics. The average increase in the CPI-U for calendar
year 2005 was 3.4%. Accordingly, in determining the millage rate in 2006 to be imposed
for general operating purposes, the millage rate may be increased by 3.4% over the millage
rate determined for this purpose in 2005.