2001-2002 Bill 1334: Venture Capital Investment, Net Capital Gain from Investment Is One

BIL:1334

TYP:General Bill GB

INB:Senate

IND:20020605

PSP:Ritchie

SPO:Ritchie

DDN:l:\council\bills\dka\4797mm02.doc

RBY:Senate

COM:Finance Committee 06 SF

SUB:Venture capital investment, net capital gain from investment is one hundred percent income tax deductible

HST:

BodyDateAction DescriptionComLeg Involved

______

Senate20020605Introduced, read first time,06 SF

referred to Committee

Versions of This Bill

TXT:

A BILL

TO AMEND SECTION 12-6-1150, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEDUCTION FROM SOUTH CAROLINA TAXABLE INCOME OF NET CAPITAL GAIN, SO AS TO PROVIDE THAT A TAXPAYER WHO HAS A NET CAPITAL GAIN FROM A VENTURE CAPITAL INVESTMENT IN THIS STATE IS ALLOWED A ONE HUNDRED PERCENT DEDUCTION FROM ITS TAXABLE INCOME, AND TO DEFINE “VENTURE CAPITAL” AND “RESEARCH AND DEVELOPMENT”.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION1.Section 12-6-1150 of the 1976 Code, as last amended by Act 387 of 2000, is further amended by adding:

“(C)(1)Notwithstanding subsections (A) and (B), if a taxpayer has a net capital gain from a venture capital investment, one hundred percent of the gain is deductible from South Carolina taxable income if the venture capital investment was:

(a)made initially after December 31, 2001; and

(b)held for at least five years before its disposition.

(2)(a)‘Venture capital’ means equity financing including, without limitation, early stage research, development, commercialization, seed capital for startup enterprises, and other risk capital for expansion of entrepreneurial enterprises that are technology-based, technology incubator, or biotechnology enterprises engaged in research and development and doing business in this State.

(b)‘Research and development’ means laboratory, scientific, or experimental testing and development related to new products, new uses for existing products, or improvements to existing products. The term does not include efficiency surveys, management studies, consumer surveys, economic surveys, advertising, or promotion, or research in connection with literary, historical, or similar projects.”

SECTION2.This act takes effect upon approval by the Governor.

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