Amendment to Tax Credit Law

A bill for an act relating to taxation; allowing an income tax credit for gifts by individuals to institutions of higher education; amending Minnesota Statutes 1996, section 290.06, by adding a subdivision.

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

Section 1. Minnesota Statutes 1996, section 290.06, is amended by adding a subdivision to read:

Subd. 25. [CREDIT FOR CONTRIBUTIONS TO HIGHER EDUCATION.]

(a) Subject to the applicable limitations provided by this subdivision, individuals may take as a credit against the tax due under this chapter an amount equal to 50 percent of the aggregate amount of charitable contributions made during the taxable year to a nonprofit institution of higher education located within this state or a nonprofit corporation, fund, foundation, trust, or association organized and operated exclusively for the benefit of institutions of higher education located with this state.

(b) The maximum amount allowable as a credit under this subdivision in any taxable year shall not exceed $500 for an individual and $1,000 for a married couple filing jointly.

(c) If the amount of the credit determined under this subdivision for any taxable year exceeds the limitations imposed in this subdivision, the unused portion of the credit cannot be carried to another taxable year.

(d) For the purpose of this subdivision, "institution of higher education" means only a nonprofit educational institution located within this state that meets all of the following requirements:

 

(1) it maintains a regular faculty and curriculum and has a regularly enrolled body of students in attendance at the place where it carries on its educational activities;

(2) it regularly offers education above the 12th grade;

(3) it provides programs of study that meet the needs of students for occupational, general, baccalaureate, or graduate education; and

(4) it is recognized by the Minnesota higher education services office as an eligible institution of higher education for purposes of state financial aid under section 136A.101.

 

(e) For the purpose of this subdivision, "institution organized and operated exclusively for the benefit of institutions of higher education" means only nonprofit corporations, funds, foundations, trusts, or associations organized and operated exclusively for the benefit of institutions of higher education located within this state which are controlled or approved and reviewed by the governing board of the institution benefiting from the charitable contribution.

Sec. 2. [EFFECTIVE DATE.]

Section 1 is effective for taxable years beginning after December 31, 1997.