South Carolina S 856: Community development corporation tax credit

Bill Text

2025-2026 Bill 856 Text of Previous Version (Jan. 28, 2026) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 856

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 ADDING SECTION 
12-6-3531 SO AS TO ALLOW A TAX CREDIT TO A TAXPAYER THAT INVESTS IN A COMMUNITY 
DEVELOPMENT CORPORATION OR IN A COMMUNITY FINANCIAL INSTITUTION.

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

SECTION 1. Article 25, Chapter 6, Title 12 of the S.C. Code is 
amended by adding:

 Section 
12-6-3531. (A)(1) 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. A taxpayer that makes a cash 
donation to a certified community development corporation or community 
development financial institution may claim a credit equal to fifty percent of 
the donation.

 (2) 
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 and certifying that the credit taken or 
available to that taxpayer will not exceed the annual aggregate dollar 
limitation of all those credits as provided in subsection (B). 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 fifteen million dollars for all taxpayers and all taxable years 
and three million dollars for all taxpayers in one taxable year.

 (C) The 
Department of Commerce shall authorize the tax credits each year on a first-come, 
first-served basis. A single community development corporation or community 
development financial institution may not receive more than twenty-five percent 
of the total annual tax credits authorized pursuant to this section. Twenty-five 
percent of annual tax credits must be held in a reserve account during the 
first three quarters of each tax year and made available exclusively to small, 
rural-based, community development corporations. During the first three 
quarters of any tax year, an individual community development corporation or a 
community development financial institution must not be authorized to receive 
more than fifteen percent of the statewide total annual credits. During the 
fourth quarter of each tax year, all remaining tax credits are available to all 
certified community development corporations or community development financial 
institutions.

 (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 
subsections (A) and (C).

 (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 three 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) The 
department must not authorize any tax credits after the annual aggregate 
limitation set forth in subsection (B) has been reached.

 (G) Banks 
and financial institutions with tax liabilities in this State 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.

 (H) For 
purposes of this section:

 (1) 
"Community development corporation" means a nonprofit corporation which:

 (a) 
is chartered pursuant to Chapter 31, Title 33;

 (b) 
is tax exempt pursuant to Section 501(c)(3) of the Internal Revenue Code of 
1986, as amended;

 (c) 
has a primary mission of developing and improving low-income communities and 
neighborhoods through economic and related development;

 (d) 
has activities and decisions initiated, managed, and controlled by the 
constituents of those local communities;

 (e) 
has a primary function