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Bill 1334

                    Current Status

Bill Number:                      1334
Type of Legislation:              General Bill GB
Introducing Body:                 Senate
Introduced Date:                  20020605
Primary Sponsor:                  Ritchie
All Sponsors:                     Ritchie
Drafted Document Number:          l:\council\bills\dka\4797mm02.doc
Residing Body:                    Senate
Current Committee:                Finance Committee 06 SF
Subject:                          Venture capital investment, net capital 
                                  gain from investment is one hundred percent 
                                  income tax deductible


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
Senate  20020605  Introduced, read first time,           06 SF
                  referred to Committee


              Versions of This 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:

SECTION 1. 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."

SECTION 2. This act takes effect upon approval by the Governor.

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