TAX CREDIT: ED. ORGANIZATION - S.B. 772: COMMITTEE SUMMARY
Senate Bill 772 (as introduced 9-29-99)
Sponsor: Senator Dale L. Shugars
Committee: Finance
Date Completed: 5-17-00
CONTENT
The bill would amend the Income Tax Act to allow a taxpayer, beginning in the 1999 tax year, to claim a credit against the tax equal to 50% of total contributions made by the taxpayer in a tax year to "educational organizations".
The maximum credit allowed would be $100, or $200 for a joint return. If the credit claimed exceeded the taxpayer's tax liability for the tax year, the portion of the credit that exceeded the tax liability would have to be refunded.
Under the bill, an educational organization would be a school district, local act school district, or intermediate school district, as defined in the Revised School Code; a public school academy operated under the Code; an educational foundation; or a continuing, community, or adult education program operated by a school district or a public school academy.
Proposed MCL 206.267 - Legislative Analyst: G. Towne
FISCAL IMPACT
This bill would reduce income tax liabilities by an estimated $21 million for the 2001 tax year (FY 2001-02), which is the first tax year it would be fully in effect. In addition, because this credit would go into effect retroactively in the 1999 tax year, contributions made in 1999 and 2000 could not be claimed under this credit until FY 2000-01, so there would also be some reduction in revenues, of a lesser amount, in FY 2000-01. The estimated $21 million reduction in income tax revenue in FY 2001-02 would reduce General Fund/General Purpose revenue an estimated $20 million and School Aid Fund revenue $1 million.
- Fiscal Analyst: J. WortleyS9900\s772sa
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.