SB 509

This bill creates a nonrefundable individual income and corporate income and

franchise tax credit for contributions to academic and curricular physical education

programs in public elementary and secondary schools (public contribution), and to

scholarship funds that are operated and controlled by private schools, kindergarten

or grades 1 to 12, and that are used to pay for the tuition and fees of individuals who

are enrolled in the private school (private contribution).

The maximum credit that may be claimed for a contribution by a single

individual or a head of household is $1,000 for a public contribution and $1,000 for

a private contribution, each year. The maximum credit that may be claimed for a

contribution by a married couple who files a joint return is $1,500 for a public

contribution and $1,500 for a private contribution, each year. The maximum credit

that may be claimed for a contribution by each spouse of a married couple who files

a separate return is $750 for a public contribution and $750 for a private

contribution, each year. Finally, the maximum credit that may be claimed for a

contribution by a business entity is $150,000 for a public contribution and $150,000

for a private contribution, each year.

Because the credit is nonrefundable, it may be claimed only up to the amount

of a claimant's income tax liability; however, an unused credit may be carried forward

for use in a future taxable year. The credit may not be claimed by nonresidents or

part-year residents of this state.

Under current federal law, contributions for which a credit may be claimed

under this bill may be deductible on an individual claimant's federal tax return and,

if so claimed, may also be claimed under this state's nonrefundable itemized

deductions credit. Also, under current federal law, contributions for which a credit

may be claimed under this bill may be deductible on a business entity's federal tax

return and, if so claimed, may also be claimed as a deduction for state income and

federal tax purposes.

This bill first applies to taxable years beginning on January 1, 2011, except

that, if the bill takes effect after July 31, 2011, it first applies to taxable years

beginning on January 1, 2012.