United States

South Carolina updates IRC conformity and changes due dates

TAX ALERT  | 

On April 21, 2016, South Carolina Governor Nikki R. Haley signed into law H4328, which updates the state’s Internal Revenue Code (IRC) conformity date and makes changes to corporate, flow-through entity, and building and loan association due dates.

Pursuant to the bill, effective April 21, 2016, South Carolina’s IRC conformity date is updated to the IRC as amended through Dec. 31, 2015. The bill also contains a limited automatic updating provision, under which South Carolina’s conformity to any IRC section that was wholly or partially expired on Dec. 31, 2015, will automatically update if that section or partial section is extended without amendment by the federal government during 2016.

Further, the bill updates or adds the following filing dates for tax years beginning after 2015:

  • Corporate annual reports are due on the 15th day of fourth month following the close of the accounting period. Under prior law, the due date of the corporate annual report was the 15th day of third month following the close of the accounting period.
  • Foreign corporations that do not maintain an office or place of business in the United States but have South Carolina nexus are required to file corporate annual reports on the 15th day of sixth month following the close of the accounting period.
  • S corporations and partnerships must file annual returns and pay any withholding tax due on or before the 15th day of the third month following the close of its tax year.  Under prior law, the due date for S corporations and partnership annual returns and withholding payments was the 15th day of the fourth month following the close of the entity’s tax year.
  • Annual reports for building and loan associations are due on the 15th day of fourth month following the close of the accounting period. Under prior law, the due date of the building and loan association annual reports was the 15th day of third month following the close of the accounting period.

Lastly, the bill conforms the due dates for quarterly withholding returns and payments to IRC section 6071, except for the fourth quarter return and payment, which is due on the last day of January following the calendar year of the withholding. Under prior law, the fourth quarter withholding return and payment was due on the last day of February.

South Carolina taxpayers should review the changes to the IRC between the prior conformity date of Dec. 31, 2014, and the present conformity date of Dec. 31, 2015. These changes may have a substantial impact on cash taxes and deferreds. Additionally, taxpayers should update their tax calendars to reflect the due date changes implemented by H4328.

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