This legislation introduces a structured approach for tax credits associated with endowment gifts, allowing for an aggregate credit authorization of up to $10 million in 2023, $25 million in 2024, and $50 million in 2025 and beyond. Each taxpayer can receive a credit equal to 50% of their endowment gift, while limitations are placed on business entities based on their gross receipts. These provisions aim to ensure that tax incentives are distributed in a fair manner while promoting sustainable funding for community foundations across Illinois.
House Bill 2990, also known as the Endow Illinois Tax Credit Act, aims to encourage charitable giving to permanent endowment funds held by qualified community foundations. The bill establishes a tax credit for taxpayers who make irrevocable contributions to these endowment funds, effectively incentivizing donations that benefit various charitable causes throughout the state. This initiative is designed to strengthen the financial base of community foundations by fostering a culture of philanthropy within Illinois.
Notable points of contention surrounding HB2990 include the provisions that allow the Department of Revenue to prioritize credit applications based on their submission dates if demand exceeds available credits. Additionally, there is a concern regarding the allocation of funds; while the bill reserves 10% of the available credits for donations of $30,000 or less, the operational effectiveness and fairness of this reservation strategy may be debated among stakeholders. Critics may argue that larger entities could dominate the tax credit benefits, potentially sidelining smaller community foundations or individual donors.