How did the June 2008 South Carolina Supreme Court one-subject-rule decision affect the 2007 tax legislation summarized in SC IL #07-16 (per SC IL #08-12)?

Plain-English summary

This Information Letter tells taxpayers how a June 2008 South Carolina Supreme Court decision affected the 2007 tax legislation the Department had previously summarized. On June 23, 2008, the Court issued its opinion in The South Carolina Public Interest Foundation, et al. v. Robert W. Harrell, Jr., et al. (Opinion No. 26506), deciding whether certain 2007 Acts violated the one-subject rule of the South Carolina Constitution (Article III, § 17). The Court reviewed Act Nos. 49, 83, 110, and 116.

The Court upheld the majority of the tax sections at issue. It ruled unconstitutional and severed a handful of provisions:

• From Act No. 83: § 5 (certain credits of large manufacturers — withholding taxes), § 6 (a new exemption for amusement park rides, machinery, and equipment), and § 8 (Venture Capital Tax Credit Certificates — revised).
• From Act No. 116: § 11 (an increase in the number of wine tastings allowed).

Bottom line: because identical provisions to the severed sections had been enacted in other Acts, the decision does not affect the legislation the Department summarized in SC Information Letter #07-16 (its main 2007 legislative update). The Department directs readers to the Supreme Court's website for a copy of the decision.

What this means for you

If you relied on the Department's 2007 legislative summary (SC Information Letter #07-16), this letter is reassurance: the one-subject-rule decision trimmed a few provisions from Acts 83 and 116, but the same tax changes survived because they were also enacted elsewhere, so the 2007 summary remains accurate.

Common questions

Q: What did the Supreme Court decide?
A: It reviewed 2007 Acts 49, 83, 110, and 116 under the constitutional one-subject rule, upheld most of the tax sections, and severed a few sections of Acts 83 and 116.

Q: Does this change the Department's 2007 legislative update?
A: No. Because identical provisions were enacted in other Acts, the decision does not affect the legislation summarized in SC Information Letter #07-16.

Subject

Tax Legislative Update for 2007 – Supreme Court Opinion

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/IL08-12.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 #08-12

SUBJECT:

Tax Legislative Update for 2007 – Supreme Court Opinion

DATE:

June 24, 2008

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (2000)
S.C. Code Ann. Section 1-23-10(4) (Supp. 2006)
SC Revenue Procedure #05-2

SCOPE:

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

On June 23, 2008, the South Carolina Supreme Court issued an opinion in The South Carolina
Public Interest Foundation, et al vs. Robert W. Harrell, Jr., et al, Opinion No. 26506 concerning
whether certain acts passed by the General Assembly in 2007 violate the one subject rule of the
South Carolina Constitution, Article III, §17. The Court reviewed Act Nos. 49, 83, 110, and 116.
On August 31, 2007, the Department issued SC Information Letter #07-16 summarizing most of
the significant changes in tax and regulatory laws administered by the Department that were
enacted during the 2007 legislative session. It provides a summary by subject matter and
provides cross references where more than one bill with identical or related subject matters were
ratified by the General Assembly.
The Court upheld the majority of the tax sections in question. The sections summarized in SC
Information Letter #07-16 that were ruled unconstitutional and severed in Act No. 83 are §5
(certain credits of large manufacturers – withholding taxes), §6 (amusement park rides,
machinery and equipment – new exemption), and §8 (Venture Capital Tax Credit Certificates –
Revised), and the section ruled unconstitutional and severed from Act No. 116 is §11 (increase in
number of wine tastings allowed). Since identical provisions in these sections were enacted in
other Acts, this decision does not effect the legislation summarized in South Carolina
Information Letter #07-16. A copy of the Supreme Court decision can be obtained from the
Supreme Courts website at www.judicial.state.sc.us.
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