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S.F. No. 256 - K-12 Scholarships Income Tax Credit and Extension to Tuition (Second Engrossment)
 
Author: Senator Roger C. Chamberlain
 
Prepared By: Jenna Larson, Senate Fiscal Analyst (651/296-5259)
 
Date: March 20, 2017



 

Section 1. Equity and opportunity donations to qualified foundations. Requires individual filers to include equity and opportunity in education donations when calculating Minnesota taxable income. Because these amounts would be deducted at the federal level as a charitable contribution for purposes of federal taxable income, they must be added back to Minnesota taxable income for purposes of claiming the credit authorized in section 5.

Section 2. Equity and opportunity donations to qualified foundations. Requires corporations to include equity and opportunity in education donations when calculating Minnesota taxable income. Because these amounts would be deducted at the federal level as a charitable contribution for purposes of federal taxable income, they must be added back to Minnesota taxable income for purposes of claiming the credit authorized is section 5.

Section 3. Inflation adjustment. Requires the commissioner of revenue to annually adjust the K-12 education credit maximum amount and income threshold for inflation.

Section 4. Equity and opportunity in education tax credit.

Subd. 1. Establishes definitions for the purposes of the equity and opportunity in education tax credit. 

Subd. 2. Authorizes a credit of 70 percent of the donation amount made in a taxable year, up to specified amounts. Allows amounts in excess of the maximum to be carried forward for up to five tax years. 

Subd. 3. Requires taxpayers to apply to the commissioner of revenue for a tax credit certificate in order to claim the credit. The maximum amount of credits that may be allocated by the commissioner in a tax year is $35 million. 

           Subd. 4. Establishes responsibilities for qualified foundations. 

           Subd. 5. Establishes responsibilities for the commissioner.

Section 5. Purpose statement; tax expenditures.

Subd. 1. States that the equity and opportunity tax credit is a tax expenditure and the effects must be measured, as required under Minnesota Statutes, section 3.192

Subd. 2. Specifies that effectiveness is measured based on the total number of eligible students who receive opportunity scholarships and better educational opportunities because of donations that qualify for the tax credit.

Effective dates. Section 3 is effective for taxable years beginning after December 31, 2018. All other sections are effective for taxable years beginning after December 31, 2017.

 
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