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Subcommittee advances extension, registration changes for angel investor tax credit
Summary
The Economic Development Legislative Subcommittee gave a favorable report to House Bill 4134, which would provide a 35% nonrefundable tax credit for angel investors, extend the program for 10 years, rename the act, and—by amendment—require qualified businesses to be registered and in good standing with the Secretary of State.
House Bill 4134, titled in discussion as the High Growth Small Business Job Creation Act (Angel Investor Tax Credit), received a favorable report from the Economic Development Legislative Subcommittee after adoption of an amendment that clarifies registration and oversight requirements for qualified businesses.
Rep. Mike Akaski, Chair of the Economic Development Legislative Subcommittee, opened consideration of House Bill 4134. The bill would provide a 35% nonrefundable income tax credit for angel investors who fund early-stage businesses in South Carolina, prevent the program's sunset by authorizing a 10-year extension (expiration described in the hearing as "until February" without a year specified), and rename the act for clarity.
Rep. David Weeks offered an amendment, described in the hearing as requested by the Department of Revenue and the Secretary of State. The amendment requires that corporations, LLCs, or limited partnerships be on file with the Secretary of State and be in good standing to qualify as a registered qualified business under the act. The amendment also clarifies roles: the Secretary of State shall post qualified business registrations and revocations on its website, while the Department of Revenue shall oversee and administer registrations and reporting under the chapter. Rep. Weeks moved adoption of the amendment and it was adopted on a voice vote.
Public testimony supporting the bill included Bob Quinn, President and CEO of the South Carolina Research Authority (SCRA), who testified that since 2013 some 381 South Carolina-based companies have qualified for the credit, with more than $300,000,000 in qualified investments and the creation or retention of more than 1,600 "high-paying" jobs; he said the average salary at SCRA member companies was $92,000. Shannon Wiley, general counsel and public information director for the Secretary of State's Office, testified in support of Rep. Weeks' amendment and offered to answer office implementation questions. Dwight Drake, an attorney with Nelson Mullins Riley and Scarborough representing SCRA, provided legislative history about prior sunsets and extensions of the program and described how language in the code might be misunderstood without the clarifying amendment now adopted.
The subcommittee held a roll-call vote on a favorable report of House Bill 4134 as amended. The roll call recorded the following votes: Representative Kaske, Aye; Representative Whitmire, Aye; Representative Lowe, Aye; Representative Weeks, Aye; Representative Dillard, Aye. By a vote of 5 to 0, the subcommittee recorded a favorable report on HB4134, as amended.
The amendment adopted in committee adds administrative and registration requirements intended to clarify oversight by the Secretary of State and the Department of Revenue; no further committee schedule or floor action was specified during the hearing.
