The South Carolina angel tax credit: a renewal

UPDATE: Fortunately, we are not in the business of making political predictions: the SC angel tax credit was extended by the SC legislature on March 12 (in this legislation). The extension is to the end of 2025 and so, assuming the governor signs the this into law, angel investing is 35% more attractive again!

Thanks to everyone that worked behind the scenes to make this extension happen, and best of luck to the early stage companies that will be getting more funding as a result over the next six years.

Perhaps more importantly than the last post, the second reason for quieter celebration is that the credit expired at the end of 2019.

While people can use the credits they already have, new investments into South Carolina’s early stage companies in 2020 will not have the same benefit. A $10,000 investment this year has lost its potential $3,500 tax benefit, making it lower return for the same risk – and therefore less attractive today than it was last December (everything else being equal).

Renewal of the credit was discussed right through 2019, from these house proceedings back in January 2019, various legislative mechanics, and votes. But ultimately the renewal (a one-word amendment to the existing legislation) has not (yet) been passed.

Given the disruptions everywhere since, it seems unlikely it will be back soon. It’s a small thing given the hardships South Carolinians face right now, of course, but it’s still a real shame.