Brief (1)
SB 39 would extend the Community Service Tax Credit Program to allow charitable contributions by individual taxpayers to qualify for the tax credits available through the program. Under current law, only contributions made to participating charitable organizations by business taxpayers qualify for tax credits.
SB 39 would require that transfers of Community Service Tax Credits be for at least 75 percent of the value of the credits.
SB 39 would require a minimum contribution of $250 in order to receive a tax credit.
The bill would also provide an income tax check-off for the Senior Citizen Meals on Wheels Program, to be placed on each Kansas individual income tax return form beginning for tax year 2001.
Background
The Community Service Tax Credit Program was established in 1994. The Department of Commerce and Housing administers the program, which awards an allotment of tax credits totaling $5.0 million annually to certain charitable organizations undertaking specific projects. The charitable organizations solicit contributions for the specific project and in return for the contribution, the donor receives a tax credit on Kansas income, privilege, or premiums tax. The tax credits are equal to 50 percent of the contribution for projects in urban areas and 70 percent of the contribution for projects in rural areas.
The Senate Committee held a hearing on SB 39, at which time Senator Clark, the sponsor of the bill, and representatives of the Gove County Healthcare Endowment Foundation, Inc.; the Logan County Healthcare Foundation, Inc.; the Graham County Economic Development Agency; and a private citizen testified in favor of the bill. The director of the Community Development Division of the Kansas Department of Commerce and Housing also provided the Committee with a background briefing on the Community Service Tax Credit program. He noted that 83.0 percent ($4.13 million of $5.0 million available tax credits) of the tax credits awarded through the program were used in FY 2000. This is the highest percentage of usage since the program was first enacted in 1994.
The Senate Committee amended the bill to include a restriction on the ability to transfer credits to for-profit businesses which are not subject to Kansas income, privilege, or premium tax. The Committee also amended the bill to require a minimum contribution of $250 in order to qualify for the tax credit.
The House Committee removed the restriction on transferability of credits put in place by the Senate Committee. The House Committee also added a provision requiring that transfers be for at least 75 percent of the value of the credits.
The House Committee of the Whole amended the bill to provide an income tax check-off for the Senior Citizen Meals on Wheels Program which would be placed on each Kansas individual income tax return form beginning for tax year 2001.
The Division of the Budget reports that passage of SB 39, as introduced, would result in a reduction of $500,000 in State General Fund receipts in FY 2002. Information on the fiscal impact of the amendments was not available upon publication of this supplemental note.
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi