Fiscal Summary

Decrease State Revenue – $150,000/FY23-24 $585,000/FY24-25 $625,000/FY25-26 $665,000/FY26-27 $705,000/FY27-28 $745,000/FY28-29 and Subsequent Years Decrease Local Revenue – $255,000/FY24-25 and Subsequent Years

Bill Summary

This bill enacts the pregnancy resource tax credit, which will be available only to a taxpayer that is a business enterprise engaged in commercial, industrial, or professional activities and operating as a corporation, limited liability company, partnership, or sole proprietorship. The credit is equal to monetary contributions made by the taxpayer during a taxable year to an eligible charitable organization; provided, that the amount of credit that may be utilized by the taxpayer in a taxable year is limited to 50 percent of the total tax liability of the taxpayer for business, excise, and franchise taxes. Any unused credit may be carried forward in any tax period until the credit is taken; however, the credit must not be carried forward for more than five years. The credit allowed is for taxes only and is not allowed for penalty and interest.

A taxpayer who claims such a credit must use forms prescribed by the department and provide the name of any eligible charitable organization receiving funds from the taxpayer and the amount of the contribution. In the application, the taxpayer must certify to the department the dollar amount of the contributions made to the eligible charitable organization during the taxable year, and provide evidence of the contributions as required by the department.

This bill requires a charitable organization to provide the department of revenue with a written certification that it meets all criteria to be considered an eligible charitable organization for a taxpayer to receive this credit. This bill defines an "eligible charitable organization" as an organization that meets the following criteria:

(1) Is exempt from federal income taxation under the Internal Revenue Code;

(2) Is a nonprofit organization formed under state law;

(3) Is a pregnancy center or residential maternity facility that:

(A) Maintains in this state its primary physical office, clinic, or residential home, which is open for clients for a minimum of 20 hours per week, excluding state holidays, and regularly answers a dedicated phone line during these hours for clients;

(B) Offers services, at no cost or low cost to the client, for the express purpose of providing assistance to women in order to carry their pregnancy to term, encourage parenting or adoption, prevent abortion, and promote healthy childbirth;

(C) Utilizes trained and licensed medical professionals to perform any available medical procedures;

(D) Has residents of this state comprising at least 50 percent of the organization's clients; and

(E) In the prior fiscal year did not receive more than 50 percent of its total revenue from federal, state, and local government grant sources, either directly or as a contractor; and

(4) Has submitted written certification to the department confirming the organization's eligibility under the criteria established.

The organization must notify the department within 60 days of any changes that may adversely affect the organization's eligibility status. The eligible charitable organization's written certification must be signed by an officer of the organization under penalty of perjury. The written certification must include the following:

(1) Verification of the organization's nonprofit status under the Internal Revenue Code;

(2) A statement that the organization does not provide, pay for, refer for, promote, or provide coverage of medication or surgical abortions and does not financially support or legally partner or affiliate with another entity that provides, pays for, refers for, promotes, or provides coverage of medication or surgical abortions; and

(3) A statement that the organization meets the criteria in (A)-(D) above.

The department is required to review each written certification and determine whether the organization meets all the criteria to be considered an eligible charitable organization and notify the organization of its determination. The department is authorized to periodically request recertification from the organization. The department must compile and make available to the public a list of eligible charitable organizations on the department website.

This bill requires that such tax credits that are earned by a partnership, limited liability company, S corporation, or other similar pass-through entity must be allocated among all partners, members, or shareholders, respectively, either in proportion to their ownership interest in the entity or as the partners, members, or shareholders mutually agree as provided in an executed document. Within 30 days after the receipt of the application, the department must allocate tax credits based on the dollar amount of contributions as certified in the application as long as the aggregate amount of tax credits that may be allocated during a taxable year does not exceed $5,000,000.

If the department cannot allocate the full amount of credits certified in an application due to the limit on the aggregate amount of credits that may be awarded in a taxable year, then the department must notify the applicant within 30 days regarding the amount of credits, if any, that may be allocated to the applicant in a taxable year. For the credits allocated during a taxable year from contributions to eligible charitable organizations, no more than 20 percent of the credits may be allocated for contributions to a single eligible charitable organization.