Legislation Detail
SB 48 TUITION SCHOLARSHIPS & TAX CREDITS
Actions: [1] SCC/SEC/STBTC/SFC-SCC
Scheduled: Not Scheduled
Senate Bill 48 (SB 48) authorizes tuition scholarship organizations to award education scholarships to certain private schools. SB 48 creates the Education Scholarship Income Tax Credit and the Education Scholarship Corporate Income Tax Credit. It provides a delayed repeal.Legislation Overview:
Senate Bill 48 (SB 48) authorizes tuition scholarship organizations to award education scholarships to certain private schools. SB 226868 creates the Education Scholarship Income Tax Credit and the Education Scholarship Corporate Income Tax Credit. It provides a delayed repeal. SECTION 1 provides certification and authorization for tuition scholarship organizations to award education scholarships to qualified schools. A. The department may authorize a tuition scholarship organization to award education scholarships to qualified schools pursuant to this section based on (1) a percentage of student enrollment as specified in this Subsection.; (2) no more than 400 eligible students per school year may receive education scholarships; and (3) the amount of an education scholarship that may be used by an eligible student shall not exceed $9,000 for each school year. B. An organization that seeks to be a tuition scholarship organization to provide education scholarships shall apply to the department. Applications shall include documentation as specified in this subsection, including: federal tax exemption; funding from contributions within the year; 90 percent of the annual funding is awarded as scholarships and all revenue from the fund investments are expended solely on education scholarships; periodic scholarship payments are issued as checks to the student’s parent and mailed to the qualified school; an education scholarship is portable; criminal background checks conducted on organization’s employees and board members; the organization has in place systems to provide for financial accountability, including independent annual audits and a surety bond. C. No later than 30 days prior to the start of a school year or the start of a semester, a tuition scholarship organization shall provide the names of eligible students who received education scholarships and the students' previous school district or charter school affiliations. The tuition scholarship organization shall provide verification that the eligible students have been awarded education scholarships and have enrolled in qualified schools. D. A qualified school participating in a scholarship program shall certify to the scholarship organization that the school meets the criteria specified in this subsection. E. On or before June 1 of each year, a tuition scholarship organization shall report the following information to the department: the organization’s address; total contributions received and contribution receipts issued; total scholarships awarded; and the total scholarships awarded. F. A tuition scholarship organization shall document contributions, maintain records of contributions and make an annual report to to the department and specified committees as specified in this subsection G. Provides definitions as used in this section. SECTION 2 adds to the Income Tax Act to create the Eduction Scholarship Income Tax Credit. A. Prior to January 1, 2029, a taxpayer who is not a dependent and who receives a contribution receipt a contribution to a tuition scholarship organization pursuant to Section 1 of this 2024 act may apply for a credit against the taxpayer's income tax liability. B. The amount of the tax credit allowed shall be in an amount equal to 80 percent of the amount contributed to a tuition scholarship organization in a taxable year. The department shall allow a tax credit only for a contribution receipt certified pursuant to Subsection C of this section. C. A taxpayer shall apply for certification of eligibility for the tax credit allowed by this section from the Public Education Department. The aggregate amount of education scholarship income tax credits and education scholarship corporate income tax credits that may be certified as eligible in any calendar year is limited to $1,000,000. Completed applications shall be considered in the order received. Applications for certification received after this limitation has been met shall not be approved. The application shall include a copy of the contribution receipt provided by the tuition scholarship organization. D. A taxpayer may claim the tax credit allowed by this section for the taxable year in which the taxpayer makes a contribution to a tuition scholarship organization. To receive the tax credit, a taxpayer shall apply to the department within 12 months following the calendar year in which the contribution is made. The application shall include a certification made pursuant to Subsection C of this section. E. That portion of tax credit that exceeds a taxpayer's tax liability in the taxable year in which the tax credit is claimed may be carried forward for three consecutive taxable years. F. Married individuals filing separate returns for a taxable year may each claim only one-half of the tax credit that would have been claimed on a joint return. G. A taxpayer may be allocated the right to claim a tax credit in proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership or limited liability company and that business entity has met all of the requirements to be eligible for the tax credit. The total tax credit claimed by all members of the partnership or limited liability company shall not exceed the allowable tax credit pursuant to this section. H. A taxpayer allowed a tax credit shall report the amount of the tax credit to the department. The department shall compile an annual report on the tax credit that shall include the number of taxpayers approved by the department to receive the tax credit, the aggregate amount of tax credits approved and any other information necessary to evaluate the tax credit. I. The department shall present the report to the Revenue Stabilization and Tax Policy Committee and the Legislative Finance Committee with an analysis of the cost of the tax credit. SECTION 3. A new section of the Corporate Income and Franchise Tax Act creates the education scholarship corporate income tax credit. A. Prior to January 1, 2029, a taxpayer that receives a contribution receipt for making a contribution to a tuition scholarship organization pursuant to Section 1 of this 2024 act may apply for a credit against the taxpayer's tax income tax liability. B. The amount of the tax credit allowed by this section shall be in an amount equal to 80 percent of the amount contributed to a tuition scholarship organization in a taxable year. The department shall allow a tax credit only for a contribution receipt certified pursuant to Subsection C of this section. C. A taxpayer shall apply for certification of eligibility for the tax credit allowed by this section from the Public Education Department. The aggregate amount of education scholarship corporate income tax credits and education scholarship income tax credits that may be certified as eligible in any calendar year is $1,000,000. Completed applications shall be considered in the order received. Applications for certification received after this limitation has been met in a calendar year shall not be approved. The application shall include a copy of the contribution receipt provided by the tuition scholarship organization that received a contribution from the taxpayer. D. A taxpayer may claim the tax credit allowed by this section for the taxable year in which the taxpayer makes a contribution to a tuition scholarship organization. To receive the tax credit, a taxpayer shall apply to the department within twelve months following the calendar year in which the contribution is made. The application shall include a certification made pursuant to Subsection C of this section. E. That portion of tax credit that exceeds a taxpayer's tax liability in the taxable year in which the tax credit is claimed may be carried forward for three consecutive taxable years. F. A taxpayer allowed a tax credit pursuant to this section shall report the amount of the tax credit to the department. G. The department shall compile an annual report on the tax credit that shall include the number of taxpayers approved by the department to receive the tax credit, the aggregate amount of tax credits approved and any other information necessary to evaluate the tax credit. The department shall present the report to the Revenue Stabilization and Tax Policy Committee and the Legislative Finance Committee with an analysis of the cost of the tax credit. SECTION 4 provides a delayed repeal effective January 1, 2029. SECTION 5 apply the provisions of Sections 2 and 3 of this act to taxable years beginning on or after January 1, 2024.