Senate Bill 2775

AN ACT TO PROVIDE AN INCOME TAX CREDIT FOR TAXPAYERS WHO PAY TUITION TO A NONPUBLIC PRIMARY OR SECONDARY SCHOOL AND INSTITUTIONS OF HIGHER EDUCATION; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) For any taxpayer who pays tuition to a nonpublic school, a credit against the taxes imposed by this chapter shall be allowed in the amount provided in subsection (2) of this section. For the purposes of this section:

(a) "Tuition" means the monthly, semester, annual or other term charge and all required fees imposed as a condition of enrollment in a primary or secondary nonpublic school; and

(b) "Nonpublic school" means an institution for the teaching of children in the primary or secondary, or both, grades, consisting of a physical plant (whether owned or leased), instructional staff and students, and which is in session each school year and 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. The term "nonpublic school" includes, but is not necessarily limited to, private, church and parochial schools.

(2) The income tax credit provided in subsection (1) of this section shall be equal to one-half (1/2) of the amount of the tuition paid to a nonpublic school during the taxable year, not to exceed the amount of income tax due the State of Mississippi from 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 tuition payments made by a taxpayer which is applied toward the credit provided in this section may not be used as a deduction by the taxpayer for state income tax purposes.

SECTION 2. (1) For any taxpayer who pays tuition to an institution of higher education, a credit against the taxes imposed by this chapter shall be allowed in the amount provided in subsection (2) of this section. For the purposes of this section:

(a) "Tuition" means the monthly, semester, annual or other term charge and all required fees imposed as a condition of enrollment in a institution of higher education; and

(b) "Institution of higher education" means a public or private university, college or community/junior college that provides an education beyond the high school level accredited by an accrediting body recognized by the U.S. Department of Education.

(2) The income tax credit provided in subsection (1) of this section shall be equal to one-half (1/2) of the amount of the tuition paid to a institution of higher education during the taxable year, not to exceed the amount of income tax due the State of Mississippi from 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. The taxpayer may not receive a credit for more than the tuition that is paid by him for eight (8) semesters at an institution of higher education. 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 tuition payments made by a taxpayer which is applied toward the credit provided in this section may not be used as a deduction by the taxpayer for state income tax purposes.

SECTION 3. Sections 1 and 2 of this act shall be codified as a separate section in Chapter 7, Title 27, Mississippi Code of 1972.

SECTION 4. This act shall take effect and be in force from and after July 1, 2007.