South Carolina S 396: License Fee on Corporations

Bill Text

2025-2026 Bill 396 Text of Previous Version (Feb. 26, 2025) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 396

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING 
SECTION 12-20-50, RELATING TO THE IMPOSITION OF LICENSE TAXES ON CORPORATIONS, 
SO AS TO PROVIDE THAT THE FEE DOES NOT APPLY TO ANY PORTION OF THE FIRST FIFTY MILLION 
DOLLARS OF CERTAIN CAPITAL STOCK AND PAID-IN OR CAPITAL SURPLUS; AND BY 
AMENDING SECTION 33-44-409, RELATING TO STANDARDS OF CONDUCT, SO AS TO PROVIDE 
AN EXCEPTION TO REFRAINING FROM COMPETING.

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

SECTION 1. Section 12-20-50 of the S.C. Code is amended by adding:

 (D)(1) A corporation subject to the 
provisions of this section whose corporate headquarters, as defined in Section 
12-6-3410, and principal place of business, as defined in Section 12-6-30, are 
in South Carolina may exclude the first fifty million dollars of equity 
contributions from a qualifying entity from its paid-in or capital surplus 
subject to the annual license fee. To qualify for this exclusion, the 
corporation must obtain a certificate from the South Carolina Research 
Authority certifying that the exclusions result from equity contributions from 
a qualifying entity.

 (2) 
For purposes of this subsection, a qualifying entity includes:

 (a) 
a venture capital fund as defined pursuant to 17 C.F.R. Section 275.203(1) 1;

 (b) 
an angel or accredited investor, as defined pursuant to 17 C.F.R. Section 
230.501; and

 (c) 
a private investment firm that does not solicit capital from investors, 
excluding another qualifying entity or the general public, and meets one of the 
exemptions outlined in the Investment Company Act of 1940.

 (3) 
A corporation claiming this exclusion must:

 (a) 
submit an annual report to the department that contains the name of each 
qualifying entity, the date of the equity contribution, the manner in which the 
qualifying entity meets the requirements of item (2), the amount of the paid-in 
or capital surplus for each year that is attributable to each qualifying 
entity, and any other information that the department may require; and

 (b) 
keep detailed books and records, including segregating out equity contributions 
attributable to each qualifying entity and retaining information concerning the 
information required to be provided in subitem (a).

SECTION 2. Section 33-44-409(b)(3) of the S.C. Code is amended to 
read:

 (3) to refrain from competing with the 
company in the conduct of the company's business before the dissolution of the 
company. This item does not apply when a member is also a 
member of another LLC and there is not an enforceable noncompete provision in 
the operating agreement.

SECTION 3. This act takes effect upon approval 
by the Governor and first applies to the tax year beginning after July 1, 2025.

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This web page was last updated on February 26, 2025 at 03:49 PM