Bill Text: IA HF292 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act creating a private instruction organization tax credit available against the individual and corporate income taxes, and including effective date and retroactive applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2023-02-14 - Introduced, referred to Ways and Means. H.J. 306. [HF292 Detail]
Download: Iowa-2023-HF292-Introduced.html
House
File
292
-
Introduced
HOUSE
FILE
292
BY
GUSTOFF
A
BILL
FOR
An
Act
creating
a
private
instruction
organization
tax
credit
1
available
against
the
individual
and
corporate
income
taxes,
2
and
including
effective
date
and
retroactive
applicability
3
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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Section
1.
NEW
SECTION
.
422.11X
Private
instruction
1
organization
tax
credit.
2
1.
The
taxes
imposed
under
this
subchapter,
less
the
credits
3
allowed
under
section
422.12,
shall
be
reduced
by
a
private
4
instruction
tax
credit
equal
to
sixty-five
percent
of
the
5
amount
of
the
voluntary
cash
or
noncash
contributions
made
6
by
the
taxpayer
during
the
tax
year
to
a
private
instruction
7
organization,
subject
to
the
maximum
total
value
of
tax
credits
8
allowed
in
subsection
8.
The
tax
credit
shall
be
claimed
by
9
use
of
a
tax
credit
certificate
as
provided
in
subsection
7.
10
2.
To
be
eligible
for
this
credit,
all
of
the
following
11
shall
apply:
12
a.
A
deduction
pursuant
to
section
170
of
the
Internal
13
Revenue
Code
for
any
amount
of
the
contribution
is
not
taken
14
for
state
tax
purposes.
15
b.
The
contribution
does
not
designate
that
any
part
of
the
16
contribution
be
used
for
the
direct
benefit
of
any
dependent
of
17
the
taxpayer
or
any
other
student
designated
by
the
taxpayer.
18
c.
The
value
of
a
noncash
contribution
shall
be
appraised
19
pursuant
to
rules
of
the
director.
20
3.
Any
credit
in
excess
of
the
tax
liability
is
not
21
refundable
but
the
excess
for
the
tax
year
may
be
credited
to
22
the
tax
liability
for
the
following
five
tax
years
or
until
23
depleted,
whichever
is
the
earlier.
24
4.
Married
taxpayers
who
file
separate
returns
must
25
determine
the
tax
credit
under
subsection
1
based
upon
their
26
combined
net
income
and
allocate
the
total
credit
amount
to
27
each
spouse
in
the
proportion
that
each
spouse’s
respective
net
28
income
bears
to
the
total
combined
net
income.
Nonresidents
29
or
part-year
residents
of
Iowa
must
determine
their
tax
credit
30
in
the
ratio
of
their
Iowa
source
net
income
to
their
all
31
source
net
income.
Nonresidents
or
part-year
residents
who
are
32
married
and
elect
to
file
separate
returns
must
allocate
the
33
tax
credit
between
the
spouses
in
the
ratio
of
each
spouse’s
34
Iowa
source
net
income
to
the
combined
Iowa
source
net
income
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of
the
taxpayers.
1
5.
An
individual
may
claim
the
tax
credit
allowed
a
2
partnership,
limited
liability
company,
S
corporation,
estate,
3
or
trust
electing
to
have
the
income
taxed
directly
to
the
4
individual.
The
amount
claimed
by
the
individual
shall
be
5
based
upon
the
pro
rata
share
of
the
individual’s
earnings
of
6
the
partnership,
limited
liability
company,
S
corporation,
7
estate,
or
trust.
8
6.
For
purposes
of
this
section:
9
a.
“Eligible
student”
means
a
student
who
is
a
member
of
10
a
household
whose
total
annual
income
during
the
calendar
11
year
before
the
student
receives
a
grant
for
purposes
of
this
12
section
does
not
exceed
an
amount
equal
to
four
times
the
most
13
recently
published
federal
poverty
guidelines
in
the
federal
14
register
by
the
United
States
department
of
health
and
human
15
services.
16
b.
“Grant”
means
grants
to
students
to
cover
all
or
part
of
17
qualified
private
instruction.
18
c.
“Private
instruction
organization”
means
a
charitable
19
organization
in
this
state
that
is
exempt
from
federal
taxation
20
under
section
501(c)(3)
of
the
Internal
Revenue
Code
and
that
21
does
all
of
the
following:
22
(1)
Allocates
at
least
ninety
percent
of
its
annual
revenue
23
in
grants
for
eligible
students
to
allow
them
to
receive
24
qualified
private
instructions
of
their
parents’
choice.
25
(2)
Only
awards
grants
to
eligible
students
who
reside
in
26
Iowa.
27
(3)
Provides
grants
to
eligible
students
without
limiting
28
availability
to
a
type
of
qualified
private
instruction.
29
(4)
Only
provides
grants
to
eligible
students
in
a
certain
30
geographic
area
within
the
state.
31
(5)
Prepares
an
annual
reviewed
financial
statement
32
certified
by
a
public
accounting
firm.
33
d.
“Qualified
private
instruction”
means
independent
private
34
instruction
or
competent
private
instruction
under
chapter
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299A.
1
7.
a.
In
order
for
the
taxpayer
to
claim
the
private
2
instruction
organization
tax
credit
under
subsection
1,
a
3
tax
credit
certificate
issued
by
the
private
instruction
4
organization
to
which
the
contribution
was
made
shall
be
5
included
with
the
person’s
tax
return.
The
tax
credit
6
certificate
shall
contain
the
taxpayer’s
name,
address,
tax
7
identification
number,
the
amount
of
the
contribution,
the
8
amount
of
the
credit,
and
other
information
required
by
the
9
department.
10
b.
(1)
The
department
shall
authorize
a
private
instruction
11
organization
to
issue
tax
credit
certificates
for
contributions
12
made
to
the
private
instruction
organization,
limited
by
the
13
maximum
total
dollar
value
of
the
tax
credits
available
for
the
14
calendar
year
in
subsection
8.
The
aggregate
amount
of
tax
15
credit
certificates
that
the
department
shall
authorize
for
a
16
private
instruction
organization
for
a
calendar
year
shall
be
17
determined
for
that
organization
by
the
department
equal
to
the
18
product
of
the
following:
19
(a)
The
maximum
total
dollar
value
of
the
tax
credits
20
available
for
the
calendar
year.
21
(b)
The
ratio
of
the
number
of
households
submitting
a
22
participation
form
to
the
department
for
a
particular
private
23
instruction
organization
to
the
total
participation
forms
24
submitted.
25
(2)
However,
a
private
instruction
organization
shall
not
26
be
authorized
to
issue
tax
credit
certificates
unless
the
27
organization
is
controlled
by
a
board
of
directors
consisting
28
of
at
least
seven
members.
The
names
and
addresses
of
the
29
members
shall
be
provided
to
the
department
and
shall
be
made
30
available
by
the
department
to
the
public,
notwithstanding
any
31
state
confidentiality
restrictions.
32
c.
Pursuant
to
rules
of
the
department,
a
private
33
instruction
organization
shall
initially
register
with
the
34
department.
The
organization’s
registration
shall
include
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proof
of
Internal
Revenue
Code
section
501(c)(3)
status
1
and
provide
the
geographic
area
the
private
instruction
2
organization
serves.
Once
the
private
instruction
organization
3
has
registered,
it
is
not
required
to
subsequently
register
4
unless
the
geographic
area
it
serves
changes.
5
d.
Each
household
that
receives
funds
from
a
private
6
instruction
organization
shall
submit
a
participation
form
7
annually
to
the
department
by
November
1.
For
the
2023
8
calendar
year
only,
each
household
served
by
a
private
9
instruction
organization
shall
submit
a
participation
form
to
10
the
department
by
August
1,
2023.
11
8.
The
maximum
total
dollar
value
of
the
tax
credits
for
12
the
2023
calendar
year
shall
not
exceed
ten
million
dollars.
13
For
calendar
years
beginning
on
or
after
January
1,
2024,
the
14
maximum
total
value
of
tax
credits
shall
not
exceed
twenty
15
million
dollars.
16
9.
Each
year
by
December
1,
the
department
shall
authorize
17
private
instruction
organizations
to
issue
tax
credit
18
certificates
for
the
following
calendar
year.
However,
for
the
19
2023
calendar
year
only,
the
department,
by
September
1,
2023,
20
shall
authorize
private
instruction
organizations
to
issue
tax
21
credit
certificates
for
the
2023
calendar
year.
22
10.
A
private
instruction
organization
that
receives
a
23
voluntary
cash
or
noncash
contribution
pursuant
to
this
section
24
shall
report
to
the
department,
on
a
form
prescribed
by
the
25
department,
by
January
15
of
each
calendar
year
all
of
the
26
following
information:
27
a.
The
name
and
address
of
the
members
and
the
chairperson
28
of
the
governing
board
of
the
private
instruction
organization.
29
b.
The
total
number
and
dollar
value
of
contributions
30
received
and
the
total
number
and
dollar
value
of
the
tax
31
credits
approved
during
the
previous
calendar
year.
32
c.
A
list
of
the
individual
donors
for
the
previous
calendar
33
year
that
includes
the
dollar
value
of
each
donation
and
the
34
dollar
value
of
each
approved
tax
credit.
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d.
The
total
number
of
eligible
students
utilizing
grants
1
for
the
school
year
in
progress
and
the
total
dollar
value
of
2
the
grants.
3
e.
The
name
and
address
of
each
household
at
which
grants
4
are
currently
being
utilized.
5
f.
The
name
of
the
person
providing
private
instruction
and
6
the
number
of
eligible
students
receiving
private
instruction
7
by
the
person.
8
Sec.
2.
Section
422.33,
Code
2023,
is
amended
by
adding
the
9
following
new
subsection:
10
NEW
SUBSECTION
.
33.
The
taxes
imposed
under
this
subchapter
11
shall
be
reduced
by
a
private
instruction
organization
tax
12
credit
as
provided
pursuant
to
section
422.11X.
13
Sec.
3.
EFFECTIVE
DATE.
This
Act,
being
deemed
of
immediate
14
importance,
takes
effect
upon
enactment.
15
Sec.
4.
RETROACTIVE
APPLICABILITY.
This
Act
applies
16
retroactively
to
January
1,
2023,
for
tax
years
beginning
on
17
or
after
that
date.
18
EXPLANATION
19
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
20
the
explanation’s
substance
by
the
members
of
the
general
assembly.
21
This
bill
provides
an
individual
and
corporate
income
22
tax
credit
equal
to
a
maximum
65
percent
of
the
voluntary
23
contributions
made
to
a
private
instruction
organization
that
24
is
exempt
from
federal
income
tax.
At
least
90
percent
of
25
total
contributions
must
be
used
by
the
private
instruction
26
organization
to
provide
grants
to
students
who
are
members
27
of
households
that
have
total
annual
income
that
does
not
28
exceed
four
times
the
most
recently
published
federal
poverty
29
guidelines.
The
contribution
may
not
be
deducted
as
a
30
charitable
deduction
for
state
tax
purposes
or
be
designated
31
for
the
direct
benefit
of
a
dependent
or
any
other
student
32
designated
by
the
taxpayer.
33
The
private
instruction
organization
must
limit
the
grants
34
to
students
who
reside
in
Iowa,
must
provide
grants
without
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limiting
the
type
of
private
instruction
received,
and
only
1
provide
grants
to
students
in
a
certain
geographic
area.
2
The
tax
credit
is
claimed
by
attaching
a
tax
credit
3
certificate
to
the
taxpayer’s
tax
return.
A
private
4
instruction
organization
is
authorized
to
issue
a
tax
credit
5
certificate
in
an
amount
determined
by
the
department.
The
6
amount
available
for
each
private
instruction
organization
7
is
determined
by
multiplying
the
maximum
total
value
of
tax
8
credits
available
for
the
calendar
year
with
the
ratio
of
the
9
number
of
households
submitting
a
participation
form
to
the
10
department
of
revenue
for
a
particular
private
instruction
11
organization
to
the
total
participation
forms
submitted.
Each
12
household
that
receives
funds
from
a
private
instruction
13
organization
must
submit
a
participation
form
to
the
department
14
of
revenue.
For
calendar
year
2023
the
maximum
total
value
15
of
tax
credits
available
shall
not
exceed
$10
million
and
for
16
calendar
years
beginning
on
or
after
January
1,
2024,
the
17
maximum
total
value
of
credits
shall
not
exceed
$20
million.
18
The
private
instruction
organization
must
report
to
the
19
department
of
revenue
by
January
15
of
each
calendar
year
20
the
members
of
the
governing
board,
the
total
dollar
value
21
of
contributions
received
and
the
total
dollar
value
of
22
tax
credits
approved,
a
list
of
donors,
the
total
number
of
23
students
receiving
grants
for
the
school
year,
the
name
and
24
address
of
each
household
utilizing
the
grants,
and
the
name
25
of
the
person
providing
private
instruction
and
the
number
of
26
eligible
students
receiving
private
instruction
by
the
person.
27
The
bill
takes
effect
upon
enactment
and
applies
28
retroactively
to
tax
years
beginning
on
or
after
January
1,
29
2023.
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