ACEVEDO, MCCARTHY, JOHNSON, ZICKUS AND WOJCIK.
INC TAX-EDUCATION TAX CREDIT
Synopsis of Bill as introduced:
Amends the Illinois Income Tax Act. Creates the educational
improvement tax credit program. Provides that, beginning with tax
years ending after December 31, 2002, an entity authorized to do
business in Illinois and subject to Illinois income taxes (a business
firm) is entitled to an income tax credit for contributions to a
qualified student assistance organization in the taxable year in which
the contribution is made. Provides that the credit shall not exceed
75% of each dollar contributed during the taxable year (90% if the
business firm provides a written commitment to make the same amount of
contribution for 2 consecutive tax years) and caps the credit at
$100,000 annually per business firm. Defines "qualified student
assistance organization" as a non-profit entity that contributes at
least 80% of its annual receipts for scholarships or to enhance
educational options for qualifying students. Defines "qualifying
student" as an Illinois resident below age 21 who is a student and who
lives in a household with a certain limited income. Provides that the
credit may not be carried forward or back. Provides that the
Department of Revenue must approve all credits and may not approve
credits in an aggregate amount above $50,000,000 each State fiscal
year. Requires the Department of Revenue to adopt rules and exempts
the credit from the sunset provisions. Effective immediately.
FISCAL NOTE (Department of Revenue)
It is difficult to estimate the fiscal impact of HB 4077 since,
in part, it would be dependent upon the amounts contributed by
businesses to a qualified student assistance organization.
HB 4077 does, however, propose to cap the credit at no more
than $50 million in any State fiscal year. While the bill caps
the amount of the credit at $50 million annually, the adminis-
trative expenses incurred by the Department to verify that a
student assistance organization qualifies would be significant.
In short, the Department would have to audit each organization
to which a donation is proposed and review all of the organi-
zation's documents related to expenditures and applications for
which scholarships were granted to determine whether 80% was
contributed to qualifying students for qualifying purposes.
STATE MANDATES NOTE (Illinois State Board of Education)
This bill imposes no mandates on local school districts. To
the extent that tax credits taken under this legislation reduce
State revenues, the money available for State financial assis-
tance to local schools will be reduced.
HOUSE AMENDMENT NO. 1.
Deletes everything after the enacting clause. Amends the Illinois
Income Tax Act. Creates the educational improvement tax credit.
Contains a caption only.
Last action on Bill: SESSION SINE DIE
Last action date: JAN-07-2003
Amendments to Bill: AMENDMENTS ADOPTED: HOUSE - 1 SENATE - 0
END OF INQUIRY
Full Text Bill Status