Colorado Legislative Council Staff
STATE and LOCAL
FISCAL IMPACT
Drafting Number: Prime Sponsor(s): |
LLS 99-0395 Sen. Linkhart |
Date: Bill Status: Fiscal Analyst: |
January 5, 1999 Senate Education Harry Zeid (303-866-4753) |
TITLE: CONCERNING A CREDIT AGAINST STATE INCOME TAX FOR DONATIONS TO SCHOOLS IN THE STATE.
Fiscal Impact Summary |
FY 1999/2000 |
FY 2000/2001 |
State Revenues General Fund |
General Fund Revenue Reduction |
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State Expenditures General Fund |
|
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FTE Position Change |
0.0 FTE |
0.0 FTE |
Other State Impact: TABOR Impact |
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Effective Date: The bill is effecutive upon signature of the Governor and applies to income tax years commencing on or after January 1, 1999. |
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Appropriation Summary for FY 1999-2000: None |
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Local Government Impact: School districts will be the beneficiaries of the monetary and in-kind contributions authorized by the bill. |
Summary of Legislation
Effective for income tax years commencing on or after January 1, 1999, this bill provides an income tax credit equal to 25 percent of the total value of cash contributions, and 12.5 percent of the total value of in-kind contributions made to schools in the state for certain educational purposes. The contributions may include donations of money, real estate, or tangible personal property to any public or private preschool, elementary school, or secondary school in Colorado for the following purposes:
• building or maintaining a school building or facility;
• establishing or operating an educational program;
• establishing or contributing to a grant, loan, or scholarship program for students who require financial assistance or demonstrate high academic achievement;
• training teachers; or
• providing or purchasing equipment.
The school receiving the contribution must provide a verification form to the taxpayer making the contribution specifying the amount of any monetary contribution and the value and nature of any in-kind contribution. The taxpayer would file the verification form with the Department of Revenue for the purpose of claiming the credit. The maximum credit allowed shall not exceed $100,000 for monetary contributions, and no more than $50,000 for in-kind contributions. In addition, the credit may not exceed the taxpayer’s actual income tax liability for the tax year for which the credit is claimed. However, the credit may be carried forward against subsequent years’ income tax liability for a period not to exceed five years.
The bill will reduce state General Fund revenues, and is therefore, assessed as having state fiscal impact. The bill will become effective upon signature of the Governor.
State Revenues
The bill provides an income tax credit equal to 25 percent of the total value of cash contributions, and 12.5 percent of the total value of in-kind contributions made to schools in the state for certain educational purposes. The number of taxpayers that may donate cash or in-kind contributions to public or private schools in Colorado, and the annual value of those donations cannot be estimated. Therefore, the reduction in state General Fund revenue as a result of the bill cannot be determined.
State Expenditures
State expenditures will be unaffected by the bill. A new line and key will be required on the income tax return to accommodate the credit. Based on an agreement with the Joint Budget Committee, Legislative Council Fiscal Note staff, and the Department of Revenue, the Department of Revenue will absorb the costs of approximately 900 hours of programming time necessary to make these changes during the normal annual rewrite by the Ddepartment. Furthermore, any increased telephone calls to the Ddepartment relating to the credit can be absorbed within existing resources. Data entry on returns claiming the credit will be based on seven keystrokes per return claiming the credit at a rate of $2.35 per 1,000 keystrokes. These expenses are anticipated to be minimal.
School District Impact
School districts will be the beneficiaries of the monetary and in-kind contributions authorized by the bill. The annual value of these contributions cannot be estimated.
State Appropriations
The fiscal note implies that no new spending authority or appropriations are required to implement the provisions of the bill.
Departments Contacted
Revenue Education