House Measure Encourages Investment In South Carolina BusinessesDavid Dykes / Greenville Online
The South Carolina House of Representatives on Wednesday, by a vote of 78 to 18, passed economic development legislation designed to spark new business growth and private sector innovation in the state.
Supporters said the Bill Wylie Entrepreneurship Act will better enable so-called "angel investors" to reinvest resources back into South Carolina to help spur the growth and expansion of small businesses."This bill directly addresses the most important issue facing our state for the next two decades – jobs," said House Speaker Bobby Harrell.
According to the legislation, an angel investor could claim a nonrefundable state income tax credit of 35 percent of a qualified investment in a start-up company.Total tax credits couldn't exceed $5 million for all taxpayers in any one taxable year, and total tax credits couldn't exceed $100,000 for an individual taxpayer in a single taxable year, according to the legislation.
The measure says an angel investor is an accredited investor who is a state resident or a nonresident who is obligated to pay taxes in the state. In addition, it could be a pass-through entity formed for investment purposes that has no business operations and doesn't have committed capital exceeding $5 million.
According to the legislation, a pass-through entity means a partnership, S-corporation or a limited liability company taxed as a partnership. It says a venture capital fund or commodity fund with institutional investors or a hedge fund wouldn't qualify.
A spokesman for Harrell said the measure should receive a procedural third reading today before being sent to the Senate. Supporters said similar tax-credit incentive programs have been implemented in 23 states, including North Carolina and Georgia.
"Thriving small businesses and entrepreneurs will play a critical role in our state's economic recovery," Harrell said. "The Bill Wylie Entrepreneurship Act will give private sector businesses better access to the capital they need to get off the ground, expand and create jobs."
Harrell said the bill was the brainchild of former Greenville Rep. Bill Wylie, who died last September.
Harrell said Wylie had been working on the legislation during last year's off session and had planned to introduce it this year. " While Bill is no longer with us, it is only fitting that the legislation he worked so hard to create lives on with this important economic development measure adopted by the House today," Harrell said.