1. Taxpayer means an individual, corporation, partnership, trust or other entity that has state income, bank, or insurance premium tax liability and has made a qualified investment.
2. Qualified investment means qualified stock or qualified interest purchased for cash in Palmetto Seed Capital corporation or the Palmetto Seed Capital Fund Limited Partnership.
3. Qualified stock means authorized but unissued shares of stock in the corporation. Qualified interest means a general partnership interest in the fund for the corporation and a limited partnership interest for all other persons.
4. State tax liability means total income tax liability after the application of all tax credits except the Palmetto Seed Capital Credit.

If the amount of the credit exceeds the tax liability, the excess may be carried over for credit against your income taxes in the next ten succeeding taxable years until the total amount of the tax credit has been taken.

If a qualified investment is redeemed by the Palmetto Seed Capital Corporation or the Palmetto Seed Capital Fund Limited Partnership within five years of the date it is purchased, the credit is disallowed and any credit previously claimed and allowed must be paid to the Department of Revenue with the appropriate return of the taxpayer for the period in which the redemption occurred.

The total amount of credits allowed for all taxpayers on all taxable years may not exceed in the aggregate, five million dollars. The credit will be allowed to taxpayers who purchase these qualified investments based on the date of purchase until the funds are exhausted.

A corporation which files or is required to file a consolidated return is entitled to the Palmetto Seed Capital Credit on a consolidated basis. The tax credit may be determined on a consolidated basis regardless of whether or not the corporation entitled to the credit contributed to the tax liability of the consolidated group.

The merger, consolidation, or reorganization of a corporation where tax attributes survive does not create new eligibility in a succeeding corporation but unused credits may be transferred and continued by the succeeding corporation. In addition, a corporation may assign its rights to its unused credit to another corporation if it transfers all, or substantially all, of the assets of the corporation or all, or substantially all, of the assets of a trade or business or operating division of a corporation to another corporation.

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