- Committee -

SCS/SB 735 - This act authorizes a tax credit for contributions to scholarship charities. To qualify, a scholarship charity organization must be considered a charitable organization pursuant to IRC 501(c)(3). The charity must also allocate at least 90% of its annual revenue for educational scholarships to children attending qualified elementary or secondary schools of their choice.

Beginning on or after January 1, 2003, a taxpayer may receive a credit of up to 50% of the taxpayer's contribution to the scholarship charity, not to exceed $50,000 per taxable year, per taxpayer. The credit is not refundable but may be carried forward for up to four taxable years. The cumulative amount of all scholarship charity tax credits in the state is limited to $5 million per fiscal year. The Director of the Department of Revenue is the authority authorized to allocate the tax credits.

The act applies only to schools in unaccredited or provisionally accredited school districts and any school in a district where at least on school has been determined to be "academically deficient". The act also limits the students who qualify for this scholarship to those who receive free or reduced lunches. Those students are in families at 185% of the federal poverty level or less.

This act is similar to HB 1278 (2002).

JEFF CRAVER