Bill Text: NH HB1686 | 2018 | Regular Session | Enrolled
Bill Title: Relative to applications for and the use of education tax credits.
Spectrum: Partisan Bill (Republican 9-0)
Status: (Passed) 2018-07-10 - Signed by Governor Sununu 06/28/2018; Chapter 341; Eff. 07/01/2018 [HB1686 Detail]
Download: New_Hampshire-2018-HB1686-Enrolled.html
HB 1686-FN - VERSION ADOPTED BY BOTH BODIES
15Mar2018... 0155h
15Mar2018... 0831h
2018 SESSION
18-2440
10/06
HOUSE BILL 1686-FN
AN ACT relative to applications for and the use of education tax credits.
SPONSORS: Rep. Hill, Merr. 3; Rep. McGuire, Merr. 29; Rep. L. Turcotte, Straf. 4; Rep. Hinch, Hills. 21; Rep. Morrison, Rock. 9; Rep. Ladd, Graf. 4; Sen. Reagan, Dist 17; Sen. Sanborn, Dist 9; Sen. Daniels, Dist 11
COMMITTEE: Ways and Means
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AMENDED ANALYSIS
This bill allows a taxpayer to use credit computed under the education tax credit against taxes due and payable under the interest and dividends tax.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
15Mar2018... 0155h
15Mar2018... 0831h 18-2440
10/06
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eighteen
AN ACT relative to applications for and the use of education tax credits.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Education Tax Credit; Definition; Donation Receipt. Amend RSA 77-G:1, V, (a) to read as follows:
(a) The business organization's [or], business enterprise's, or individual's name, address, and federal taxpayer identification number.
2 Definition; Education Tax Credit Application. Amend RSA 77-G:1, VII to read as follows:
VII. "Education tax credit application'' means a document developed by the department of revenue administration and submitted by a business organization [or], business enterprise, or individual that contains at a minimum:
(a) The business organization's [or], business enterprise's, or individual's name, address, and federal taxpayer identification number.
(b) A contact person's name, title, and phone number.
(c) The requested donation amount.
(d) A signed statement certifying that the business organization [or], business enterprise, or individual agrees to make donations in accordance with the requirements established in this chapter.
3 New Paragraph; Definition Added; Individual. Amend RSA 77-G:1 by inserting after paragraph VIII the following new paragraph:
VIII-a. “Individuals,” for purposes of being granted credits under this chapter, shall include any entity having taxable interest and dividend income as described in RSA 77:3.
4 Definition; Scholarship Organization. Amend RSA 77-G:1, XX to read as follows:
XX. "Scholarship receipt'' means a document developed by the department of revenue administration and submitted by a scholarship organization to the business organization [or], business enterprise, or individual and that contains at a minimum:
(a) The business organization's [or], business enterprise's, or individual's name, address, and federal taxpayer identification number.
(b) The amount of the donations used or carried forward and the amount not used.
5 Contributions to Scholarship Organizations. Amend RSA 77-G:3 to read as follows:
77-G:3 Contributions to Scholarship Organizations. For each contribution made to a scholarship organization, a business organization [or], business enterprise, or individual may claim a credit equal to 85 percent of the contribution against the business profits tax due pursuant to RSA 77-A, [or] against the business enterprise tax due pursuant to RSA 77-E, against the tax on interest and dividends under RSA 77, or apportioned against [both] each provided the total credit granted [against both] shall not exceed the maximum education tax credit allowed. Credits provided under this chapter shall not be deemed taxes paid for the purposes of RSA 77-A:5, X. The department of revenue administration shall not grant the credit without a scholarship receipt. No business organization [or], business enterprise, or individual shall direct, assign, or restrict any contribution to a scholarship organization for the use of a particular student or nonpublic school. No business organization [or], business enterprise, or individual shall receive more than 10 percent of the aggregate amount of tax credits permitted in RSA 77-G:4.
6 Scholarship Organizations; Awards. Amend RSA 77-G:5, I(i)(2) to read as follows:
(2) Not award a scholarship to any lineal descendant or equivalent step-person of any proprietor, partner, or member of any business organization [or], business enterprise, or individual making a contribution to a scholarship organization and claiming a credit against the business profits tax [or], business enterprise tax, or tax on interest and dividends, nor any lineal descendant or equivalent step-person of any officer, director, or owner of more than a 5 percent interest in any business organization [or], business enterprise, or individual making a contribution to a scholarship organization and claiming a credit against the business profits tax [or], business enterprise tax, or tax on interest and dividends, nor any employee who is among the highest-paid 20 percent of paid employees in any business organization [or], business enterprise, or individual making a contribution to a scholarship organization and claiming a credit against the business profits tax [or], business enterprise tax, or tax on interest and dividends.
7 Scholarship Applications. Amend RSA 77-G:5, II to read as follows:
II.(a) An organization seeking approval as a scholarship organization under this chapter shall submit an application to the department of revenue administration each program year no later than June 15. The department of revenue administration shall approve or deny the application within 30 days of receipt. The department shall deny any application that fails to meet the statutory requirements and shall notify the scholarship organization of the reasons for denial.
(b) A business organization [or], business enterprise, or individual shall submit an education tax credit application to the department of revenue administration no earlier than January 1 and no later than November 15. The department shall approve these applications within 30 days on a first come-first served basis, up to the aggregate tax credit amount allowed under RSA 77-G:4. If multiple education tax credit applications are received on the same day, they shall be processed at random. No business organization [or], business enterprise, or individual shall be granted an education tax credit for more than 10 percent of the aggregate tax credit amount permitted in RSA 77-G:4. The department of revenue administration may approve only a portion of a request if required to prevent exceeding the aggregate tax credit amount allowed under RSA 77-G:4. The approval shall include the amount allowed and the date of approval.
(c) Once an education tax credit application is approved, the business organization [or], business enterprise, or individual shall donate within 60 days of the date of approval, but no later than December 15, or the request shall expire. Donations may be made to multiple scholarship organizations provided the total amount donated by the business organization [or], business enterprise, or individual does not exceed the amount approved.
(d) Upon receiving a donation, the scholarship organization shall send a scholarship receipt to the department of revenue administration and to the business organization [or], business enterprise, or individual within 15 days. The department of revenue administration shall notify the scholarship organization and the business organization [or], business enterprise, or individual within 15 days if the donations made [by a business organization or business enterprise] exceed the amount approved. If a business organization [or], business enterprise, or individual fails to donate the total amount approved within the time permitted, the department of revenue administration may grant credit requests in the order specified in subparagraph (b).
(e) Notwithstanding RSA 193-E:5, on or before July 15, a scholarship organization shall furnish the unique pupil identifier and date of birth for each student eligible pursuant to RSA 77-G:1, VIII(a)(1) and (2) who is receiving a scholarship, and the subparagraph under which he or she was eligible, to the department of education. The department of education shall notify the scholarship organization within 30 days of any students who are ineligible under RSA 77-G:1, VIII(a)(1). The scholarship organization shall notify the department of education within 30 days if any student eligible under RSA 77-G:1, VIII(a)(1) or (2) is not awarded a scholarship or is awarded a scholarship yet subsequently returns to public school. The department of education shall return such student to the calculation of the average daily membership in residence, as defined in RSA 189:1-d, IV, for the student's school district of residence, and add the amount calculated under RSA 198:40-a to the adequate education grant amount to the student's school district of residence, and include such amount in the next adequate education grant payment made under RSA 198:42.
(f) Repealed.
(g) On or prior to December 1, the scholarship organization shall submit a scholarship organization report to the department of revenue administration. The scholarship organization shall also include a scholarship organization application if it intends to issue scholarships under this chapter in the next program year. The department of revenue administration shall review the scholarship organization report and the scholarship receipts to ensure that the administrative expenses requirement set forth in subparagraph I(f) is not exceeded, that the number of scholarships issued under RSA 77-G:1, VIII(a)(1)and (2) meets the requirements of this chapter, and the average scholarship size does not exceed the amount allowed. If any of these requirements are not met, the department of revenue administration may deny a scholarship organization application for subsequent program years and shall notify the scholarship organization of the reasons for denial.
(h) A business organization [or], business enterprise, or individual may file for the tax credit after receiving the scholarship receipt, and may file a tax credit request for the subsequent program year up to the amount donated in the current program year.
(i) The provisions of this chapter regarding nonpublic schools and their relation to scholarship organizations shall apply only to nonpublic schools that choose to accept scholarship students.
8 Rulemaking; Applications. Amend RSA 77-G:6, I(f)(2) to read as follows:
(2) The application procedure for a business organization [or], business enterprise, or individual applying to a scholarship organization for a tax credit under this chapter.
9 Exceptions. Amend RSA 77-G:9, III to read as follows:
III. Donations made by a business organization [or], business enterprise, or individual to a scholarship organization that are not for the purpose of obtaining a tax credit under this chapter shall not be subject to the requirements in this chapter.
10 New Paragraph; Tax on Interest and Dividends; Credit for Education Tax Credit. Amend RSA 77:18 by inserting after paragraph IV the following new paragraph:
V. A taxpayer may elect to credit all or a portion of the education tax credit computed under RSA 77-G:4 against the tax due and payable under this chapter.
11 Education Tax Credit; Aggregate Amount. RSA 77-G:4 is repealed and reenacted to read as follows:
77-G:4 Tax Credits. The aggregate of tax credits issued by the commissioner of the department of revenue administration to all taxpayers claiming the credit shall not exceed $5,100,000 for a program year.
12 Effective Date. This act shall take effect July 1, 2018.
18-2440
Amended 3/22/18
HB 1686-FN- FISCAL NOTE
AS AMENDED BY THE HOUSE (AMENDMENT #2018-0155h and #2018-0831h)
AN ACT relative to applications for and the use of education tax credits.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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| Estimated Increase / (Decrease) | ||||
STATE: | FY 2019 | FY 2020 | FY 2021 | FY 2022 | |
Appropriation | $0 | $0 | $0 | $0 | |
Revenue | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease | |
Expenditures | $0 | $0 | $0 | $0 | |
Funding Source: | [ X ] General [ ] Education [ ] Highway [ ] Other | ||||
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METHODOLOGY:
This bill amends the Education Tax Credit statute to allow taxpayers to utilize this credit against the Interest and Dividends Tax and caps the Education Tax Credit program at $5,100,000 in a program year. In FY 2017, the amount of Education Tax Credit applied against the Business Profits Tax, Business Enterprise Tax or both was $188,000. The Department has no information on how many Interest and Dividends taxpayers will donate and utilize the Education Tax Credit against their Interest and Dividends tax liability to determine the decrease in general fund revenue in FY 2019 and each year thereafter.
AGENCIES CONTACTED:
Department of Revenue Administration
