MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Education; Ways and Means

By: Representative Smith (35th)

AN ACT TO PROVIDE AN INCOME TAX CREDIT FOR TAXPAYERS WHO MAKE CASH CONTRIBUTIONS TO SCHOOL TUITION ORGANIZATIONS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) Except as otherwise provided in subsection (3), for any taxpayer who makes a voluntary cash contribution to a school tuition organization, a credit against the taxes imposed by this chapter shall be allowed in the amount provided in subsection (2) of this section. For purposes of this section:

(a) "School tuition organization" means a charitable organization in this state which is exempt from federal taxation under Section 501(c)(3) of the Internal Revenue Code and which allocates at least ninety percent (90%) of its annual revenue for educational scholarships or tuition grants to children in order to allow them to attend any qualified school of their parent's or guardian's choice. To qualify as a school tuition organization, the charitable organization may not limit the availability of educational scholarships or tuition grants to only students of one (1) school; and

(b) "Qualified school" means a nonpublic primary or secondary school in this state which does not discriminate on the basis of race, color, sex, handicap, familial status or national origin and which maintains educational standards equivalent to the standards established by the State Department of Education for the state schools as outlined in the Approval Requirements of the State Board of Education for Nonpublic Schools.

(2) The income tax credit provided in subsection (1) of this section shall be equal to the amount of the voluntary cash contribution to a school tuition organization during the taxable year, not to exceed the lessor of Five Hundred Dollars ($500.00) or the amount of income tax imposed upon the taxpayer for the taxable year reduced by the sum of all other credits allowable to such taxpayer under the state income tax laws, except credit for tax payments made by or on behalf of the taxpayer. In the case of married individuals filing separate returns, each person may claim an amount not to exceed one-half (1/2) of the tax credit which would have been allowed for a joint return. Any unused portion of the credit may be carried forward for the next five (5) succeeding tax years.

(3) Any amount of cash contribution made by a taxpayer that is applied toward the credit provided in this section may not be used as a deduction by the taxpayer for state income tax purposes.

(4) The tax credit provided for in this section shall not be allowed if the taxpayer designates the taxpayer's cash contribution to the school tuition organization for the direct benefit of any dependent of the taxpayer.

SECTION 2. Section 1 of this act shall be codified as a separate section in Chapter 7, Title 27, Mississippi Code of 1972. SECTION 3. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the income tax laws before the date on which this act becomes effective, whether such claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun thereafter; and the provisions of the income tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.

SECTION 4. This act shall take effect and be in force from and after January 1, 1999.