When did a South Carolina manufacturer report property, and who reported sold manufacturing assets under Revenue Ruling 05-20?

Plain-English summary

South Carolina Revenue Ruling #05-20 explained the special property-tax calendar for manufacturers. A manufacturer generally returned its real and tangible personal property to the Department of Revenue by the last day of the fourth month after the end of its regular income-tax accounting year.

The property-tax year remained a calendar year even when the manufacturer used a fiscal accounting year. The Department assessed the property, the county later billed the tax, and payment generally was due by January 15 following the property-tax year. This could leave more than a year between the return and final payment.

If an accounting-period change caused more than one accounting year to end in the same calendar year, the manufacturer filed after each year end and the Department used the return showing the greatest value. A new manufacturer generally had to make a return for each property-tax year in which it operated. An existing manufacturer ordinarily did not file a second return merely because it placed new property in service after its fiscal year end; if still owned, that property was reported using the next accounting-year end.

Asset sales required a sequence analysis. The seller's year end, purchaser's year end, sale date, and December 31 ownership determined which party returned the property and paid the ensuing year's tax. In some sequences the purchaser was jointly liable even when the seller filed the return.

RR 16-12 expressly superseded and reformatted this guidance without intending to change its positions.

What this means for you

Manufacturers with fiscal years

Do not assume a March 1 or April 30 deadline. Under the ruling, the manufacturer-specific return was due four months after that manufacturer's income-tax year end.

Businesses buying or selling manufacturing assets

The contract closing date alone did not determine who returned the property. Both parties' year ends and December 31 title could change the result, and joint liability was possible.

New manufacturers and accounting-period changes

A new manufacturer could need a December 31-based first return when it began after its normal year end. A manufacturer with two year ends in one calendar year filed two returns, with the greater value used for assessment.

Common questions

Q: When was a manufacturer's return generally due?
A: By the last day of the fourth month after its regular income-tax accounting year ended.

Q: Was tax paid when the return was filed?
A: No. The county billed later, and the ruling generally placed final payment on January 15 after the property-tax year.

Q: Did equipment installed after a fiscal year end require an immediate second return?
A: Generally no for an existing manufacturer. If still owned, it was reported using the next accounting-year end.

Q: Is RR 05-20 current?
A: No. RR 16-12 expressly superseded it and presented updated return, assessment, payment, startup, closure, and asset-sale scenarios.

Citations and references

• S.C. Code Ann. § 12-37-610 — real-property tax liability
• S.C. Code Ann. § 12-37-715 — personal property generally taxed once per property-tax year
• S.C. Code Ann. §§ 12-37-900 and 12-37-905 — general return provisions discussed by the ruling
• S.C. Code Ann. § 12-37-970 — manufacturer returns, multiple year ends, and asset-sale rules
• S.C. Code Ann. §§ 12-45-70 and 12-45-180 — tax-payment period and penalties
• SC Revenue Ruling 16-12 — expressly superseded and updated RR 05-20

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: RR05-20.pdf
• Official superseding RR 16-12 PDF: RR16-12.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 REVENUE RULING #05-20

SUBJECT:

Reporting and Taxation of Property Owned by a Manufacturer
(Property Tax)

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous advisory opinions and any oral directives in
conflict herewith.

REFERENCES:

S. C. Code Ann. Section 12-37-610(Supp. 2004)
S. C. Code Ann. Section 12-37-715(2000)
S. C. Code Ann. Section 12-37-900(2000)
S. C. Code Ann. Section 12-37-905(2000)
S. C. Code Ann. Section 12-37-970(2000)
S. C. Code Ann. Section 12-45-70(2000)

AUTHORITY:

S. C. Code Ann. Section 12-4-320(2000)
S. C. Code Ann. Section 1-23-10(4)(Supp. 2004)
SC Revenue Procedure #05-2

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the
public and to Department personnel. It is an advisory opinion
issued to apply principles of tax law to a set of facts or general
category of taxpayers. It is the Department’s position until
superseded or modified by a change in statute, regulation, court
decision, or another Departmental advisory opinion.

INTRODUCTION:
The South Carolina Code of Laws (“Code”) includes a number of different statutes which
address the filing of property tax returns and paying of property taxes. As a general rule,
property taxes are paid in arrears. 1 The reporting of property subject to property taxes
occurs as of a certain date; however, the last day to actually pay the property taxes
associated with the listed property generally occurs later. Often that date is a year or
more after the year in which the taxpayer must report the property. When the property

1

One exception to this rule is motor vehicles and similar property assessed by the county
auditor.
1

tax return must be filed and which property must be reported, varies based on the type of
business that is involved, the type of property involved, and whether the property is
assessed by the county auditor or assessor or the Department of Revenue (“Department”).
This document addresses the rules regarding the filing of property tax returns and the
paying of property taxes by manufacturers, including how returns are filed for short
taxable years of manufacturers, what happens when a manufacturer begins business in
this State or places new property in service in this State, and who lists the property for
taxation and is liable for the property taxes when there is a sale of the property.

LAW AND DISCUSSION
General Laws Regarding Filing of Property Tax Returns for Manufacturers
Code Section 12-37-610 provides that:
Each person is liable to pay taxes and assessments on the real
property that, as of December thirty-first of the year preceding the
tax year, he owns in fee, for life, or as trustee, as recorded in the
public records for deeds of the county in which the property is
located, or on the real property that, as of December thirty-first of
the year preceding the tax year, he has care of as guardian, executor
or committee or may have the care of as guardian, executor, trustee
or committee.
Code Section 12-37-900 provides in relevant part that:
Every person required by law to list property shall, annually, between
the first day of January and the first day of March, make out and
deliver to the auditor of the county in which the property is by law to
be returned for taxation a statement, verified by his oath, of all the
real estate which has been sold or transferred since the last listing of
property for which he was responsible and to whom, and of all real
and personal property possessed by him, or under his control, on the
thirty-first day of December next preceding, either as owner, agent,
parent, husband, guardian, executor, administrator, trustee, receiver,
officer, partner, factor or holder with the value thereof, on such
thirty-first day of December, at the place of return... 2

2

Code Section 12-37-905 also addresses the filing of property tax returns and the
reporting of property, however, it concerns taxpayers who are required to make a
property tax return with the county auditor. Except for property not used in its business
and motor vehicles licensed for use on the public highways, manufacturers do not report
their property to the county auditor.
2

Code Section 12-37-970 provides as follows:
The assessment for property taxation of merchants’ inventories,
equipment, furniture and fixtures, and manufacturers’ real and
tangible personal property, and the machinery, equipment, furniture
and fixtures of all other taxpayers required to file returns with the
South Carolina Department of Revenue for purposes of assessment
for property taxation, must be determined by the department from
property tax returns submitted by the taxpayers to the department on
or before the last day of the fourth month after the close of the
accounting period regularly employed by the taxpayer for income tax
purposes in accordance with Chapter 7 3 [sic] of this title. The
department by regulation shall prescribe the form of return required
by this section, the information to be contained in it, and the manner
in which the return must be submitted. Every taxpayer required to
make a return to the department of property for assessment for
property taxation must make the return to the department not less
than once each calendar year. Whenever by a change of accounting
period, or otherwise, more than one accounting period ends within
any one calendar year, the taxpayer must make one such return within
the prescribed time for filing following the end of each of the
accounting periods and the department shall determine the
assessment from the return setting forth the greatest value.
When property required to be returned as herein provided is sold after
the end of the seller’s accounting year and before January first next
ensuing and when the purchaser’s accounting year ends after the
seller’s and before January first next ensuing, the property must be
returned by the seller as of the end of his accounting period. The
purchaser is not required to list and return the property as of the close
of his accounting period during the calendar year of sale. The seller
and the purchaser are jointly and singularly liable for the tax that is
due and payable by reason of this provision. The provision of this
section does not apply to motor vehicles licensed for use on public
highways.
When property required to be returned as provided in this section is
sold before the end of the seller’s accounting year and before January
first next ensuing and when the purchaser’s accounting year ends
before the date of the purchase and before January first next ensuing,
the property must be listed and returned by the taxpayer holding title
as of December thirty-first and is liable for the tax for the ensuing
year. [sic]

3

Chapter 7 has been recodified in current Chapter 6.
3

The Department of Revenue shall forward the assessments prepared
as a result of the returns submitted pursuant to this section to the
appropriate local taxing authorities no later than August fifteenth of
the applicable tax year.
Code Section 12-37-715 provides that “Notwithstanding any other provision of law, no
personal property may be taxed more than once in any tax year.”
Code Section 12-45-70 provides in relevant part that “all taxes are due and payable
between the thirtieth day of September and the fifteenth day of January after their
assessment in each year….”

Property Tax - Manufacturers in General
For property tax purposes, manufacturers are treated differently than individuals,
merchants and other businesses.
First, under Code Section 12-4-540, most of a manufacturer’s property is assessed by the
Department. The real and personal property of individuals is assessed by the county
assessor or auditor, respectively. The personal property of merchants is assessed by the
Department while the real property of merchants is assessed by the county assessor.
Second, unless exempted or specifically changed by statute, manufacturers are assessed
at 10 1/2% on both their real and personal property. By contrast, merchants and
individuals are assessed at varying rates on their real and personal property, though
business personal property, including merchant’s business personal property is assessed
at 10 1/2%.
Third, manufacturers’ tangible personal property depreciates based on a statutory set
schedule that is set forth in Code Section 12-37-930, subject to a 10% residual. By
contrast, merchants depreciate their tangible personal property based on income tax
depreciation, subject to a 10% residual. As a general rule, individuals not in business
value their taxable personal property based on guide books published by the Department.
Lastly, manufacturers may adopt an accounting year that is different from the calendar
year and the adoption of an accounting year other than a calendar year may impact the
time period for reporting a manufacturer’s property for taxation. 4 The property tax laws
in many instances are geared towards calendar year taxpayers making it difficult to
determine when a manufacturer who uses an accounting year other than a calendar year
must file its property tax return and pay its property tax.
4

Merchants may also adopt a tax year for income tax purposes other than a calendar year.
However, this generally only has an effect on the returns they must file for their tangible
personal property under Code Section 12-37-970. While personal property filings by
merchants are not specifically addressed in this document, the same principles that are
discussed in this document apply to the tangible personal property tax filings of
merchants required to report property to the Department.
4

General Concepts Related to Property Taxes for Manufacturers for this
Document
The statutes relating to property tax can often be confusing and may refer to terms that
may have several different meanings depending on the context used. For example, a
statute may refer to the “tax year” and it may mean either the taxpayer’s income tax year
which can be either or a fiscal or a calendar year or it may refer to the property tax year
as defined below. The term “assess” usually means to determine the taxable value of the
property by applying the South Carolina assessment ratio to the fair market value of the
taxpayer’s property. However, in certain other statutory contexts the term “assess”
means to determine the amount of taxes owed by a taxpayer by applying the millage rate
to the assessed (taxable) value of the taxpayer’s property. For purposes of this document,
the following terms are defined as follows:
Accounting Year:

This is the year regularly employed by a manufacturer for income
tax accounting purposes. It is either a calendar year or a fiscal year
chosen by the manufacturer. It is also referred to as the accounting
period. See Code Section 12-37-970.

Property Tax Year:

This is the calendar year in which the auditor records the assessed
value of the property on the county tax books and in which the
county bills the taxpayer for taxes due. See Code Section 12-37610, 12-39-140 and 12-39-150.

Return Due Date:

The final day for filing a manufacturer’s property tax return. See
Code Section 12-37-970.

Billing Date:

This is the time frame during which the county, after receiving
information from the Department concerning the manufacturer’s
return, will bill the manufacturer for the property tax due (based on
the millage established by the county and the assessed value of the
property). The bill for the taxes is usually sent to the manufacturer
sometime between September and November of the property tax
year.

Final Payment Date: Property taxes must be paid between September 30th of the
property tax year and January 15th of the calendar year following
the property tax year. As such, the last day for paying property
taxes without penalty is the January 15th of the calendar year
following the property tax year. See 12-45-180.
Assess:

To determine the taxable value of property by applying an
assessment ratio to the fair market value of the property. See Code
Sections12-39-150 and 12-43-220.

5

Assessment Date:

The date that the county auditor records the assessed value of the
property on the county duplicate list as described in Code Section
12-39-140 and 12-39-150. This date is no later than September
30th of the property tax year.

Filing of a Property Tax Return by Manufacturers
Ordinarily, related statutes should be construed to give full force and effect to each
statute and to the extent possible similar statutory provisions should be harmonized and
reconciled. When two statutes are capable of coexistence, absent a clear legislative intent
to the contrary, each must be regarded as effective, and in interpreting related and coexisting statutes, the statutes must be harmonized unless they are irreconcilable and in
hopeless conflict. 73 Am. Jur. Statutes §168 (2001). Thus, Code Sections 12-37-610,
12-37-900, and 12-37-970 should be read together and each given effect as much as
possible. However, where the provisions of these statutes are in direct conflict, other
rules of statutory construction must be applied to determine which statutory provision
controls.
In Wilder v. South Carolina State Highway Dept., 228 S.C. 448, 454, 90 S.E. 2d 635, 638
(1955), the South Carolina Supreme Court stated that “where there is a statute dealing
with a subject in general terms and another statute dealing with a part of the same subject
in a more minute and definite way, the special statute will be considered as an exception
to, or qualification of, the general statute and given effect.” In this instance, there are two
statutes that address when the filing of property tax returns must occur.
Code Section 12-37-900 is a general provision concerning property tax returns. It
requires the filing of a property tax return on or before March 1st for property held as of
the preceding December 31st.
Code Section 12-37-970 is a specific provision that addresses property tax returns of
manufacturers. 5 As a general rule, it requires that a manufacturer’s property taxes be
determined from returns filed on or before the last day of the fourth month after the close
of the accounting year regularly employed by the taxpayer for income tax purposes in
accordance with the income tax provisions of the South Carolina Code. Under this
provision, the manufacturer’s property tax return is usually due four months after the last
day of its accounting year. The provisions in Code Section 12-37-970 that are specific to
taxpayers that are manufacturers take precedence over the general rules contained in
Code Section 12-37-900 to the extent that the two provisions cannot be harmonized. See
5

Code Section 12-37-905 is a third statute that discusses the date for filing returns with a
county auditor. However, as noted, it is not relevant to this discussion since
manufacturers generally do not file returns with the county auditors, except for property
that is not used in the business and motor vehicles licensed for use on the public
highways.
6

S.C. Atty. Gen. Op. No. 2509 (September 12, 1968), which concludes that Code Section
12-37-970 controls in determining when a manufacturer is required to file a property tax
return.
Under Code Section 12-37-970, if the taxpayer is engaged in the business of
manufacturing, absent a change in the manufacturer’s accounting year or the other
situations described in this document, the manufacturer must file property tax returns for
its real and tangible personal property by the end of the fourth month after the close of its
accounting year.
The following chart provides guidance to manufacturers on when to file their property tax
return with the Department.
Manufacturer’s
Accounting Year
January 1 – December 31
February 1 – January 31
March 1 – February 28/29
April 1 – March 31
May 1 – April 30
June 1 – May 31
July 1 – June 30
August 1 – July 31
September 1 – August 31
October 1 – September 30
November 1 – October 31
December 1 – November 30

For Property Owned as of

Return Due Date

December 31
January 31
February 28/29
March 31
April 30
May 31
June 30
July 31
August 31
September 30
October 31
November 30

April 30
May 31
June 30
July 31
August 31
September 30
October 31
November 30
December 31
January 31
February 28/29
March 31

Payment of Property Taxes by Manufacturers
For the purpose of paying property taxes, all manufacturers are treated alike without
regard to when their accounting year ends. All of a manufacturer’s real and tangible
personal property (other than motor vehicles licensed for use on the public highways) is
assessed by September 30th of the property tax year (this is the calendar year after the
calendar year in which the manufacturer’s accounting year ends) and the manufacturer is
generally billed for the taxes due sometime between September and November of the
property tax year. Code Section 12-45-70 requires that all property taxes be paid
between September 30th of the tax year in which the taxes are assessed and January 15th
of the following year

7

The following chart, using accounting years ending from December 2004 through
November 2005 as examples, will help explain when payment must be made for taxes.
Manufacturer
Accounting
Year Ending
12/31/2004
01/31/2005
02/28/2005
03/31/2005
04/30/2005
05/31/2005
06/30/2005
07/31/2005
08/31/2005
09/30/2005
10/31/2005
11/30/2005

Property
Tax Year

Return Due
Date

2005
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006
2006

04/30/2005
05/31/2005
06/30/2005
07/31/2005
08/31/2005
09/30/2005
10/31/2005
11/30/2005
12/31/2005
01/31/2006
02/28/2006
03/31/2006

Estimated County
Billing Dates for
Taxes
Fall 2005
Fall 2006
Fall 2006
Fall 2006
Fall 2006
Fall 2006
Fall 2006
Fall 2006
Fall 2006
Fall 2006
Fall 2006
Fall 2006

Final Tax
Payment Date
01/15/2006
01/15/2007
01/15/2007
01/15/2007
01/15/2007
01/15/2007
01/15/2007
01/15/2007
01/15/2007
01/15/2007
01/15/2007
01/15/2007

Change in Accounting Tax Year of Manufacturer
The first paragraph of Code Section 12-37-970 provides that if, as a result of a change in
accounting year or for some other reason, a manufacturer that is subject to Code Section
12-37-970 has more than one accounting year that ends in the same calendar year, the
manufacturer must file a return by the fourth month following the close of each
accounting year. As provided in Code Section 12-37-970, the Department will use the
return that sets forth the greatest value to compute the taxes owed. Code Section 12-37970. This provision assures that a manufacturer pays property taxes at least once for each
property tax year, but also assures that the property is not taxed twice for any given
property tax year in accordance with Code Section 12-37-715.
For example, assume that a manufacturer has an accounting year that begins July 1, 2003
and ends June 30, 2004. The manufacturer undergoes an accounting year change and
changes its accounting year from one that ends June 30th to one that ends December 31st.
For the 2005 property tax year, the manufacturer must file two returns with the
Department. The first return, for the accounting year beginning July 1, 2003 and ending
June 30, 2004, is due by October 31, 2004. The return for the accounting year beginning
July 1, 2004 and ending December 31, 2004, is due by April 30, 2005. The Department
will use the return that has the greater value for the assets for purposes of determining the
tax due for the 2005 property tax year.

8

Manufacturer’s First Year in Business in this State
Code Section 12-37-970 has no provision specifically directed at a manufacturer’s first
year of business in this State, as it does for a manufacturer that changes its accounting
year during a calendar year. 6 However, Code Section 12-37-970 provides that every
taxpayer required to make a property tax return to the Department must do so not less
than once each calendar year. The longstanding administrative policy of the Department
has been to interpret this provision as requiring a property tax return for each property
(calendar) year a manufacturer is in business in this State. A manufacturer who started
business in this State after the close of its accounting year, but before December 31st,
would not have any property tax liability for the following property tax year if its only
property tax responsibilities were expressed in the first sentence of Code Section 12-37970. This apparent gap is corrected by the provision of Code Section 12-37-970 that
requires a return for each property tax year, read in conjunction with Code Section 12-37900. Read together, they require a new manufacturer to list property it holds as of
December 31st for taxation. Therefore, a new manufacturer that has never filed a return
before in this State is required to file a property tax return for assets that it owns as of
December 31st.
Administrative interpretations of statutes by the agency charged with their administration
and not expressly changed by the legislative body are entitled to great weight. Marchant
v. Hamilton, 279 S.C. 497, 309 S.E.2d 781(1983). When as in this case, the construction
or administrative interpretation of a statute has been applied for a number of years and
has not been changed by the legislature, there is created a strong presumption that such
interpretation or construction is correct. Ryder Truck Lines, Inc. v. South Carolina Tax
Commission, 248 S.C. 148, 149 S.E.2d 435 (1966); Etiwan Fertilizer Company v. South
Carolina Tax Commission, 217 S.C. 354, 60 S.E.2d 682 (1950). However, while such a
manufacturer must report assets it owns as of December 31st of the calendar year it begins
business in this State, the Department has allowed the manufacturer to file this return
with the Department by April 30th of the next calendar year.
Scenario #1
Manufacturer Begins Business in State:
Manufacturer’s Accounting Year Ends:

May 30, 2004
June 30, 2004

Under Scenario 1, the manufacturer is required to file its property tax return based
on the assets it holds in this State on June 30, 2004. The manufacturer’s return must
be filed by September 30, 2004. The property taxes for the property that are
reported in the September 30, 2004 return will be due by January 15, 2006. Because
the new manufacturer will make a return for the 2005 property tax year, no
additional return is required for that year.
6

If the manufacturer is purchasing the assets of an existing South Carolina business, see
the discussion below concerning Sale of a Manufacturer’s Assets During the Calendar
Year.
9

Scenario #2
Manufacturer’s Accounting Year Ends:
June 30, 2004
Manufacturer Begins Business in this State: September 30, 2004
Under Scenario 2, the manufacturer is required to file its property tax return based
on assets that it holds in this State as of December 31, 2004. Since the manufacturer
is required to file a return for each property tax year that it is in operation in this
State, the manufacturer must file a return for property it owns in this State as of the
last day of the calendar year in which it begins business in this State, i.e., December
31, 2004. This return must be filed by April 30, 2005. The property taxes for the
property that are reported on the April 30, 2005 return will be due by January 15,
2006.

Manufacturer Places Assets in Service after the End of its Accounting Year
but Before January 1st of the Next Calendar Year
The statute again has no specific provision relating to how an existing manufacturer who
files a return based on its accounting year is to report property that is placed in service
after the end of its accounting year. Code Section 12-37-970 provides that every taxpayer
required to make a return to the Department for assessment for taxation must make the
return to the Department not less than once each calendar year. In this case, however, the
manufacturer has already filed a return based on its accounting year reporting all property
that it owned as of the close of its accounting year. In such instances, the Department has
not required a manufacturer to file a second return reporting property placed in service
subsequent to the close of its accounting year but before December 31st of the calendar
year. This position is consistent with South Carolina Attorney General Opinion 2509
(September 12, 1968), which found that a taxpayer that lists its property as of the close of
its accounting year for the ensuing property tax year is not required to list and to pay
property tax on property placed in service after the close of its accounting year but before
December 31st of that year, but instead is required to list that property at the close of its
next accounting year if it owns the property at that time.
Scenario:
Manufacturer’s Accounting Year Ends:
Manufacturer Places Additional
Property in Service in this State:

June 30, 2004
September 30, 2004

Under this scenario, the manufacturer is required to report all property that it holds
as of June 30, 2004 on its 2005 property tax return which is due by October 31,
2004. The property taxes for the property that is reported on the October 31, 2004
return will be due by January 15, 2006. The manufacturer is not required to file a
second property tax return for the assets it placed in service on September 30, 2004.

10

These assets will be reported, along with the manufacturer’s other assets, on the
manufacturer’s property tax return for its year ending June 30, 2005. This return
must be filed by October 31, 2005. The property taxes for the property that are
reported on the October 31, 2005 return will be due by January 15, 2007.

Sales of a Manufacturer’s Assets During the Calendar Year
Questions often arise as to who must file returns and who must pay the property taxes due
when there is a sale of the assets of a manufacturer during the year. The following six
scenarios should help explain the seller’s and purchaser’s responsibilities in most
situations when such sales occur. Other more complicated scenarios involving multiple
sales of assets can only be reviewed on a case-by-case basis using these scenarios for
guidance. The statutory authority for determining the seller’s and purchaser’s
responsibilities in each of these scenarios can be found in paragraphs one, two or three of
Code Section 12-37-970.
The scenarios are as follows:
•
•
•
•
•
•

(Scenario 1) the seller’s accounting year ends, the sale occurs, the purchaser’s
accounting year ends.
(Scenario 2) the seller’s accounting year ends, the purchaser’s accounting year
ends, the sale occurs.
(Scenario 3) the purchaser’s accounting year ends, the sale occurs, the seller’s
accounting year ends.
(Scenario 4) the sale occurs, the seller’s accounting year ends, the purchaser’s
accounting year ends.
(Scenario 5) the sale occurs, the purchaser’s accounting year ends, the seller’s
accounting year ends.
(Scenario 6) the purchaser’s accounting year ends, the seller’s accounting year
ends, the sale occurs.

Scenario #1:
Seller’s Accounting Year Ends:
Sale Occurs:
Purchaser’s Accounting Year Ends:

March 31, 2004
June 30, 2004
September 30, 2004

Code Section 12-37-970, paragraph two provides that when a manufacturer’s
property is sold after the end of the seller’s accounting year and before January
first of the next calendar year and when the purchaser’s accounting year ends
after the seller’s and before January first of the next calendar year, the property
must be returned by the seller as of the end of its accounting year. The
purchaser is not required to list and return the property as of the close of its
accounting year during the calendar year of sale. The seller and the purchaser
are jointly and severally liable for the tax that is due and payable by reason of
this provision. Under this provision, the seller and the purchaser have the
following responsibilities.
11

Seller’s Responsibilities: The seller is liable for the property taxes on the sold
property for the 2005 property tax year. The seller must report the sold property
on its 2005 property tax return – the return for its accounting year ending on
March 31, 2004 which has to be filed by July 31, 2004. The seller will not be
assessed on this property until September of 2005 and taxes with respect to such
property will be due by January 15, 2006.
Purchaser’s Responsibilities: The purchaser is not required to report the
purchased property on its 2005 property tax return; however, the purchaser is
jointly responsible with the seller for the taxes due on such property for the
2005 property tax year.
The purchaser is liable for the property taxes on the purchased property for the
2006 property tax year. The purchaser must report the purchased property on its
2006 property tax return – the return for its accounting year ending on
September 30, 2005 which must be filed by January 31, 2006. Payment for
taxes on that property will be due by January 15, 2007.
Scenario #2:
Seller’s Accounting Year Ends:
Purchaser’s Accounting Year Ends:
Sale Occurs:

March 31, 2004
September 30, 2004
December 31, 2004

Code Section 12-37-970, paragraph two provides that when a manufacturer’s
property is sold after the end of the seller’s accounting year and before January
first of the next calendar year and when the purchaser’s accounting year ends
after the seller’s and before January first of the next calendar year, the property
must be returned by the seller as of the end of his accounting year. The
purchaser is not required to list and return the property as of the close of his
accounting year during the calendar year of sale. The seller and the purchaser
are jointly and severally liable for the tax that is due and payable by reason of
this provision. Under this provision, the seller and the purchaser have the
following responsibilities.
Seller’s Responsibilities: The seller is liable for the property taxes on the sold
property for the 2005 property tax year. The seller must report the sold property
on its 2005 property tax return – the return for its accounting year ending on
March 31, 2004 which must be filed by July 31, 2004. The seller will be
assessed on this property in September of 2005 and taxes with respect to such
property will be due by January 15, 2006.
Purchaser’s Responsibilities: The purchaser is not required to report the
purchased property on its 2005 property tax return; however, the purchaser is
jointly responsible with the seller for the taxes due on such property for the
2005 property tax year.

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The purchaser is liable for the property taxes on the purchased property for the
2006 property tax year. The purchaser must report the purchased property on its
2006 property tax return – the return for its accounting year ending on
September 30, 2005 which must be filed by January 31, 2006. Payment for
taxes on that property will be due by January 15, 2007.
Scenario #3:
Purchaser’s Accounting Year Ends:
Sale Occurs:
Seller’s Accounting Year Ends:

April 30, 2004
September 30, 2004
November 30, 2004

Under Code Section 12-37-970, paragraph 3, when property required to be
returned under this section is sold before the end of the seller’s accounting year
and before the next January first and the purchaser’s accounting year ends
before the date of the purchase and before the next January first, the property
must be listed and returned by the taxpayer holding title as of December thirtyfirst and that person is liable for the tax for the ensuing year. [Emphasis added]
Further, Code Section 12-37-970, paragraph one provides that every taxpayer
required to make a return to the Department for assessment for taxation must
make the return to the Department not less than once each calendar year.
Reading the provisions of Code Section 12-37-970 together and consistent with
Code Section 12-37-900, the Department’s long standing administrative policy
has been to interpret the law as requiring that the manufacturer holding title as
of December 31st of the calendar year of sale to file a property tax return
reporting the property that is the subject of the sale. If the purchaser is the party
holding title on December 31st, this would require that the purchaser file a
second return reporting the purchased property as of December 31st. The
manufacturer who must report the property is also liable for the tax on the
property for the ensuing property tax year. This assures that the property is
taxed for the ensuing property tax year. Consistent with Code Section 12-37970, the manufacturer who is responsible for filing the return must file the
return with the Department by April 30th of the next calendar year. Under
scenario #3, the seller and the purchaser have the following responsibilities
under the statute.
Seller’s Responsibilities: For the 2005 property tax year, none with respect to
the property sold.
Purchaser’s Responsibilities: The purchaser must file a return for all property it
owns as of April 30, 2004. This return is due by August 31, 2004. The
purchaser is liable for the property taxes on this property for the 2005 property
tax year. The purchaser must report the purchased property on a separate return
provided it owns the property as of December 31st and it has already filed a
return for its existing property on its return for its accounting year ending April

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30, 2004. 7 The return for the purchased property will be due on April 30, 2005
and the purchaser will be responsible for the 2005 property tax year taxes for
that property. The purchaser will be assessed on all its property reported on
both returns in September of 2005 and the taxes for the reported property will
be due by January 15, 2006. The purchaser will also file a return on August 31,
2005 for all property that it owns as of April 30, 2005.
Scenario #4:
Sale Occurs:
Seller’s Accounting Year Ends:
Purchaser’s Accounting Year Ends:

March 31, 2004
June 30, 2004
December 31, 2004

Under the general rule of Code Section 12-37-970, paragraph one, a
manufacturer must report property based on property it holds as of the end of
the close of its accounting year. In this instance, the seller does not own the
property as of the end of the close of its accounting year, but the purchaser does
own the property as of the end of its accounting year. So the purchaser and the
seller have the following responsibilities with respect to the property.
Seller’s Responsibilities: For the 2005 property tax year, none with respect to
the property sold.
Purchaser’s Responsibilities: The purchaser is liable for the property taxes on
the purchased property for the 2005 property tax year since it owns the
purchased property as of the end of its accounting year, December 31, 2004.
The purchaser must report the purchased property on its 2005 property tax
return which is due April 30, 2005. The purchaser will be assessed on this
property in September of 2005 and taxes on the property must be paid by
January 15, 2006. The purchaser will continue to file returns and pay the
property taxes on the purchased property until the property is sold again.
Scenario #5:
Sale Occurs:
Purchaser’s Accounting Year Ends:
Seller’s Accounting Year Ends:

March 31, 2004
June 30, 2004
December 31, 2004

Under the general rule of Code Section 12-37-970, paragraph one, a
manufacturer must report property based on property it holds as of the end of
the close of its accounting year. In this instance, the seller does not own the

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As noted above, this document does not adderess multiple sale scenarios, so if the
purchaser sells some or all of the property purchased before December 31st of the
calendar year of sale, it may have to be reported by the new purchaser depending on the
facts of the situation.
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property as of the end of the close of its accounting year, but the purchaser does
own the property as of the end of its accounting year. So the purchaser and the
seller have the following responsibilities with respect to the property.
Seller’s Responsibilities: For the 2005 property tax year, none with respect to
the property sold.
Purchaser’s Responsibilities: The purchaser is liable for the property taxes on
the purchased property for the 2005 property tax year since it owns the property
at the close of its accounting year, June 30, 2004. The purchaser must report the
purchased property on its 2005 property tax return which is due on October 30,
2004. The purchaser will be assessed on this property in September of 2005 and
taxes on the purchased property must be paid by January 15, 2006. The
purchaser will continue to file returns and pay the property taxes on the property
until the purchased property is sold again.
Scenario #6
Purchaser’s Accounting Year Ends:
Seller’s Accounting Year Ends:
Sale Occurs:

March 31, 2004
June 30, 2004
December 31, 2004

Under the general rule of Code Section 12-37-970, paragraph one, a
manufacturer must report property based on property it holds as of the end of
the close of its accounting year. In this instance, the seller owns the property as
of the end of the close of its accounting year. Therefore, the seller will report
the property on its property tax return for the 2005 property tax year. The
purchaser and the seller have the following responsibilities with respect to the
property.
Seller’s responsibilities – The seller is liable for the property taxes on the sold
property for the 2005 property tax year since the seller owns the sold property
as of the end its accounting year, June 30, 2004. This return is due October 30,
2004. The seller will be assessed on this property in September of 2005 and
taxes on the property must be paid by January 15, 2006.
Purchaser’s responsibilities – None with respect to the property purchased for
the 2005 property tax year. For the 2006 property tax year, the purchaser must
report the purchased property on its return for its accounting year ending March
31, 2005 which is due on July 31, 2005. The purchaser must pay the property
taxes for the 2006 property tax year on the purchased property. The purchaser
will continue to file returns and pay the property tax on the purchased property
until the property is sold again

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SUMMARY:
The statutes regarding the filing of property tax returns and the payment of property taxes
are generally designed to assure that property in this State gets taxed for each property
tax year, but does not get taxed more than once for any given property tax year. The
rules are also designed to minimize the administrative burden on manufacturer’s by
requiring that they file a return only once for each property tax year, except in very
limited instances. To this end, the laws have provided for only one party to the
transaction to file a return for property that has been sold during the calendar year. These
rules, that are discussed in detail above, can be summarized as follows:
For the calendar year of sale, if the seller owns the property as of the close of its
accounting year, the seller reports the property for the next property tax year and is liable
for the property taxes on the sold property (in some instances, the purchaser is jointly
liable for the taxes on that property).
For the calendar year of sale, if the seller does not own the property as of the close of its
accounting year but the purchaser does own such property as of the end of its accounting
year, the purchaser reports the property for taxation and is liable for the taxes on that
property for the next property tax year.
For the calendar year of sale, if neither the seller or the purchaser own the property as of
the end of their accounting years for the calendar year of sale, then the manufacturer that
owns the property on December 31st of that year, must report the property and is liable
for property taxes on that property for the next property tax year.
For questions about this document, please contact Jerilynn VanStory at (803)898-5151.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Burnet R. Maybank
Burnet R. Maybank III, Director
, 2005
December 30
Columbia, South Carolina

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