2019 -- H 5273

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LC001090

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO TAXATION - TAX CREDITS FOR CONTRIBUTIONS TO SCHOLARSHIP

ORGANIZATIONS

     

     Introduced By: Representatives Chippendale, Hull, Costantino, Marszalkowski, and
McKiernan

     Date Introduced: February 01, 2019

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 44-62-3 and 44-62-6 of the General Laws in Chapter 44-62

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entitled "Tax Credits for Contributions to Scholarship Organizations" are hereby amended to read

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as follows:

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     44-62-3. Application for the tax credit program.

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     (a) Prior to the contribution, a business entity shall apply in writing to the division of

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taxation. The application shall contain such information and certification as the tax administrator

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deems necessary for the proper administration of this chapter. A business entity shall be approved

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if it meets the criteria of this chapter; the dollar amount of the applied for tax credit is no greater

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than one hundred thousand dollars ($100,000) in any tax year, and the scholarship organization

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that is to receive the contribution has qualified under § 44-62-2.

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     (b) Approvals for contributions under this section shall be made available by the division

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of taxation on a first-come-first-serve basis consistent with § 44-62-3(f). The total aggregate

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amount of all tax credits approved shall not exceed one million five hundred thousand dollars

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($1,500,000) in a fiscal year; provided that the total aggregate amount of all tax credits approved

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shall not exceed five million dollars ($5,000,000) in fiscal year 2020 and shall thereafter increase

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by fifteen percent (15%) following any fiscal year in which applications by eligible business

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entities exceed approved contributions by ten percent (10%).

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     (c) The division of taxation shall notify the business entity in writing within thirty (30)

 

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days of the receipt of application of the division's approval or rejection of the application.

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     (d) Unless the contribution is part of a two-year plan, the actual cash contribution by the

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business entity to a qualified scholarship organization must be made no later than one hundred

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twenty (120) days following the approval of its application. If the contribution is part of a two-

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year plan, the first year's contribution follows the general rule and the second year's contribution

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must be made in the subsequent calendar year by the same date.

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     (e) The contributions must be those charitable contributions made in cash as set forth in

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the Internal Revenue Code.

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     (f) Approvals shall be made available first to applications for the continued participation

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of eligible students already attending qualified schools through the scholarship program described

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in this section, provided that the division of taxation may treat any contribution amount from a

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single business entity to support additional scholarships as a separate application.

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     44-62-6. Definitions.

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     The following words and phrases used in this chapter shall have the meanings given to

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them in this section unless the context clearly indicates otherwise:

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     (1) "Business entity" means an entity authorized to do business in this state and subject to

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taxes imposed under chapters 44-11, 44-13, 44-14, 44-15 and 44-17 of the general laws. Business

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entities also include Subchapter S Corporations, Limited Liability Partnerships, and Limited

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Liability Corporations.

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     (2) "Division of taxation" means the Rhode Island division of taxation.

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     (3) "Eligible business entity" means any business entity whose application to make a

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contribution to the program created by this section would be approved if said approval would not

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exceed the limit described in § 44-62-3(b).

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - TAX CREDITS FOR CONTRIBUTIONS TO SCHOLARSHIP

ORGANIZATIONS

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     This act would increase the total aggregate amount of tax credits for contributions to

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scholarship organizations by a business entity meeting the requisite criteria to five million dollars

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($5,000,000) in fiscal year 2020. This act would also include a new definition for an "eligible

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business entity".

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     This act would take effect upon passage.

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