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OLR Bill Analysis
sSB 652
AN ACT ESTABLISHING A TAX CREDIT FOR DONATIONS TO THE
ROBERTA B. WILLIS SCHOLARSHIP PROGRAM.
SUMMARY
This bill allows any taxpayer that makes a minimum $500 donation
to the Office of Higher Education (OHE) for the Roberta B. Willis
Scholarship program (hereafter “Willis Scholarship”) to claim a
corporation business tax credit or income tax credit, beginning in the
2021 income or tax year respectively. The donation yields a credit
equal to 40% of the total cash amount donated, up to a $60,000 credit
per taxpayer. The bill caps the total annual credits for the first income
and taxable year at $16 million and $32 million for subsequent years.
Additionally, the bill establishes (1) taxpayer eligibility criteria for
the credit; (2) an application process for taxpayers that wish to claim it;
and (3) a non-lapsing, General Fund account into which OHE must
deposit scholarship donations. It requires OHE to annually report on
the amount of donations received.
The bill also incorporates the donations received into the funding
formula for determining scholarship grant amounts available to
award. It provides that the total base for grant funds includes any
amount in the donation account plus available state appropriations,
rather than just the latter as under current law.
EFFECTIVE DATE: Upon passage, and the tax credit provisions
apply to income and taxable years beginning January 1, 2021, or later.
TAX CREDIT ELIGIBILITY
Eligible Taxpayers
The bill allows eligible taxpayers to claim the credit against the
corporation business tax or income tax (but not the withholding tax). 2021SB-00652-R000278-BA.DOCX
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In addition to taxpayers who are not business entities, the bill also
allows S corporation shareholders and partners in partnerships that
donate to claim the credit.
If the entity is structured as a limited liability company, has only
one owner, and does not file a separate federal tax return
(“disregarded entity”), the owner may claim the credit against the
personal income tax.
APPLICATION PROCESS
The bill establishes an application process for taxpayers that wish to
claim the credit. The OHE executive director determines the
application form, which must contain information that includes the
intended donation amount along with any other information the office
requires.
Under the bill, within 30 days after the executive director receives
the application, he must issue a written decision. He must issue a
certification letter to the taxpayer indicating that the tax credit will be
available to be claimed if he finds that the (1) donation meets the bill’s
requirements and (2) total amount of credits claimed in the tax year
have not exceeded the bill’s yearly cap.
SCHOLARSHIP PROGRAM DONATION ACCOUNT
The bill establishes the “Roberta B. Willis Scholarship program
donation account” as a separate, non-lapsing account in the General
Fund. OHE must deposit scholarship donations received into this
account and spend the account funds for the scholarship program’s
purposes. Additionally, the office must report to the Appropriations
and Higher Education and Employment Advancement committees by
January 1, 2022, and annually thereafter, about the amount of
donations in the account received during the previous calendar year.
Beginning in FY 22, OHE must lapse from the state appropriations
for the Willis Scholarship an amount equal to the amount of donations
received during the previous calendar year. By law, appropriations for
the Willis Scholarship do not lapse until the end of the fiscal year after 2021SB-00652-R000278-BA.DOCX
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the one for which it was made.
COMMITTEE ACTION
Higher Education and Employment Advancement Committee
Joint Favorable Substitute
Yea 17 Nay 5 (03/18/2021)