2017 South Carolina Code of Laws
Title 12 - Taxation
CHAPTER 6 - SOUTH CAROLINA INCOME TAX ACT
Section 12-6-3530. Community development tax credits.

Section repealed effective June 30, 2020.

(A) A taxpayer may claim as a credit against his state income tax, bank tax, or premium tax liability thirty-three percent of all amounts invested in a community development corporation or in a community development financial institution, as defined in Section 34-43-20(2) or (3).

To qualify for this credit the taxpayer must obtain a certificate from the South Carolina Department of Commerce certifying that the entity into which the funds are invested is a community development corporation or a community development financial institution within the meaning of Section 34-43-20(2) or (3) and certifying that the credit taken or available to that taxpayer will not exceed the aggregate five million dollar limitation of all those credits as provided in subsection (B) when added to the credits previously taken or available to other taxpayers making similar investments. A taxpayer who invested in good faith in a certified corporation or institution may claim the credit provided in this section, notwithstanding the fact that the certification is later revoked or not renewed by the department.

(B) The total amount of credits allowed pursuant to this section may not exceed in the aggregate five million dollars for all taxpayers and all calendar years and one million dollars for all taxpayers in one calendar year.

(C) A single community development corporation or community development financial institution may not receive more than twenty-five percent of the total tax credits authorized pursuant to this section in any one calendar year.

(D) The department shall monitor the investments made by taxpayers in community development corporations and community development financial institutions as permitted by this section and shall perform the functions as provided in subsection (A) above.

(E) If the amount of the credit determined, pursuant to subsection (A), exceeds the taxpayer's state tax liability for the applicable taxable year, the taxpayer may carry over the excess to the immediately succeeding taxable years. However, the credit carry-over may not be used for a taxable year that begins on or after ten years from the date of the acquisition of stock or other equity interest that is the basis for a credit pursuant to this section. The amount of the credit carry-over from a taxable year must be reduced to the extent that the carry-over is used by the taxpayer to obtain a credit provided for in this section for a later taxable year.

(F) Notwithstanding the provisions of subsections (A), (B), (C), (D), and (E) above, if on April 1, 2001, or as soon after that as the department is able to determine, the total amount of tax credits which may be claimed by all taxpayers exceeds the total amount of tax credits authorized by this section, the credits must be determined on a pro rata basis. For purposes of this subsection, a community development corporation or community development financial institution for which an investment may be claimed as a tax credit pursuant to this section must report all investments made before April 1, 2001, to the department by April 1, 2001, which shall inform, as soon as reasonably possible, all community development corporations and community development financial institutions of the total of all investments in all institutions and corporations as of April 1, 2001.

(G) If stock or another equity interest that is the basis for a credit provided for in this section is redeemed by the community development corporation or the community development financial institution within five years of the date it is acquired, the credit provided by this section for the stock or other equity interest is disallowed, and credit previously claimed and allowed with respect to the redeemed stock or other equity interest must be paid to the Department of Revenue with the appropriate return of the taxpayer covering the period in which the redemption occurred. When payments are made to the Department of Revenue pursuant to this section, the amount collected must be handled as if no credit had been allowed.

(H) To receive the credit provided by this section, a taxpayer shall:

(1) claim the credit on his annual state income or premium tax return as prescribed by the Department of Revenue; and

(2) file with the Department of Revenue and with his annual state income or premium tax return a copy of the form issued by the department as to the stock or other equity interest that is the basis for a credit claimed pursuant to this section, by the taxpayer, including an undertaking by the taxpayer to report to the Department of Revenue a redemption of the stock or other equity interest by the community development corporation or the community development financial institution.

(I) The department shall complete forms prescribed by the Department of Revenue which must show as to each stock or other equity interest in a community development corporation or a community development financial institution that is the basis for a credit pursuant to this section:

(1) the name, address, and identification number of the taxpayer who acquired the stock or other equity interest; and

(2) the nature of the stock or other equity interest acquired by the taxpayer and the amount advanced for it.

These forms must be filed with the Department of Revenue on or before the fifteenth day of the third month following the month in which the stock or other equity interest is acquired. Copies of the forms to be provided to the Department of Revenue must be mailed to the taxpayer on or before the fifteenth day of the second month following the month in which the acquisition is made.

(J) A taxpayer may not claim the tax credit provided in this section unless the community development corporation or community development financial institution in which the investment is made has been certified at the time the investment is made.

(K) If the community development financial institution in which the investment is made is a tax-exempt nonprofit corporation, the tax credit provided in this section is not allowed if the taxpayer claims the investment as a deduction pursuant to Section 170 of the Internal Revenue Code.

(L) Banks and financial institutions chartered by the State of South Carolina may invest in community development corporations and community development financial institutions incorporated pursuant to the laws of this State, up to a maximum of ten percent of a chartered bank or financial institution's total capital and surplus.

HISTORY: 2000 Act No. 314, Section 2, eff May 30, 2000, applicable to tax years beginning after 2000; 2001 Act No. 89, Section 52, eff July 20, 2001.

Editor's Note

2000 Act No. 314, Section 1, as last amended by 2015 Act No. 46, provides:

"SECTION 1. Section 4 of Act 314 of 2000, as last amended by Act 248 of 2010, is further amended to read:

"SECTION 4. Unless reauthorized by the General Assembly, the provisions of this act shall terminate on June 30, 2020, and this act and all other laws and regulations governing, authorizing, and otherwise dealing with community development corporations and community development financial institutions are deemed repealed on that date."