HLS 19RS-727 ENGROSSED
2019 Regular Session
HOUSE BILL NO. 595
BY REPRESENTATIVE WRIGHT
TAX CREDITS: Establishes an income tax credit for contributions to certain foster care
charitable organizations
1 AN ACT
2To enact R.S. 47:6040, relative to income tax credits; to establish an income tax credit for
3 donations to certain foster care organizations; to provide for definitions; to provide
4 for the amount of the credit; to provide for the application for and granting of tax
5 credits; to provide for certain requirements; to authorize the promulgation of rules
6 and regulations; and to provide for related matters.
7 Section 1. R.S. 47:6040 is hereby enacted to read as follows:
8 ยง6040. Credits; qualifying foster care charitable organizations
9 A.(1) There shall be allowed a nonrefundable income tax credit for donations
10 a taxpayer makes during a taxable year to qualifying foster care charitable
11 organizations, hereinafter "foster care organizations". In order to qualify for the
12 credit, the donation shall be made by a taxpayer who is required to file a Louisiana
13 income tax return. The amount of the credit shall be equal to the amount of the
14 donation used by the foster care organization to provide services to a qualified
15 individual, or one hundred thousand dollars, whichever is less. The total amount of
16 credits granted by the department pursuant to the provisions of this Section shall not
17 exceed one million dollars per calendar year. The granting of credits shall be on a
18 first-come, first-served basis. If the total amount of credits applied for in any
19 particular calendar year exceeds the amount of tax credits authorized for that year,
20 the excess shall be treated as having been applied for on the first day of the
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HB NO. 595
1 subsequent year. All requests received on the same business day shall be treated as
2 received at the same time, and if the aggregate amount of the requests received on
3 a single business day exceed the total amount of available tax credits, tax credits
4 shall be approved on a pro rata basis. The credit may be used in addition to any
5 federal tax credit or deduction earned for the same donation. However, a taxpayer
6 shall not receive any other state tax credit, exemption, exclusion, deduction, or any
7 other tax benefit for a donation in which the taxpayer has received a tax credit under
8 this Section.
9 (2) In the event that the tax credit earned pursuant to this Section exceeds the
10 total tax liability of the taxpayer in the taxable year, the amount of the credit not used
11 as an offset against a taxpayer's tax liability in the taxable year may be carried
12 forward as a credit against subsequent income tax liabilities for a period not to
13 exceed five taxable years.
14 B. For purposes of this Section, the following words shall have the following
15 meanings unless the context clearly indicates otherwise:
16 (1) "Department" means the Department of Revenue.
17 (2) "Qualified individual" means a child in a foster care placement program
18 established by the Department of Children and Family Services or a child at
19 significant risk of entering a foster care placement program established by the
20 Department of Children and Family Services.
21 (3) "Qualifying foster care charitable organization" or "foster care
22 organization" means a qualifying charitable organization that is exempt from federal
23 income tax under Section 501(c)(3) of the Internal Revenue Code that each operating
24 year provides services to at least one hundred qualified individuals in this state and
25 spends at least fifty percent of its budget on services to qualified individuals in this
26 state. A foster care organization that does not spend at least fifty percent of its
27 overall budget in Louisiana may be a qualifying foster care charitable organization
28 for purposes of this Section if the organization spends at least fifty percent of its state
29 budget on services to qualified individuals in Louisiana and the organization certifies
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HB NO. 595
1 to the department that one hundred percent of the donation from Louisiana taxpayers
2 will be spent on services for Louisiana residents.
3 (4) "Services" means cash assistance, medical care, child care, food,
4 clothing, shelter, job placement, and job-training services or any other assistance
5 reasonably necessary to meet immediate basic needs that are provided for a qualified
6 individual and used in this state.
7 C.(1) The tax credit shall be earned when the donation is made by the
8 taxpayer to the foster care organization. The foster care organization shall issue a
9 receipt to a taxpayer indicating the actual amount of the taxpayer's donation that is
10 used by the organization to provide services to a qualified individual.
11 (2) No later than the thirty-first day of January following the year in which
12 the donation is received by a qualifying foster care charitable organization, the foster
13 care organization shall annually certify to the department that the foster care
14 organization meets all of the requirements of this Section and shall annually submit
15 the following:
16 (a) Written certification signed by an officer of the foster care organization
17 under penalty of perjury of all the following:
18 (i) Verification of the organization's status under Section 501(c)(3) of the
19 Internal Revenue Code.
20 (ii) Financial data indicating the foster care organization's budget for the
21 prior operating year and the amount of the budget spent on services for qualified
22 individuals of this state.
23 (iii) A statement that the foster care organization plans to continue spending
24 at least fifty percent of its budget on services to residents in this state who are
25 qualified individuals. A foster care organization that does not spend at least fifty
26 percent of its overall budget in Louisiana shall submit a statement that it spends at
27 least fifty percent of its state budget on services to qualified individuals in this state
28 and that one hundred percent of the donations it receives from Louisiana taxpayers
29 will be spent on services to Louisiana residents.
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HB NO. 595
1 D.(1) The department shall provide a standardized format for a receipt to be
2 issued by the foster care organization to the taxpayer. The department shall require
3 a taxpayer to provide a copy of the receipt when claiming the credit authorized by
4 this Section.
5 (2) The secretary of the department may promulgate rules and regulations
6 in accordance with the provisions of the Administrative Procedure Act to implement
7 the provisions of this Section.
8 Section 2. The provisions of this Act shall be applicable for donations made by
9taxpayers to qualifying foster care charitable organizations on and after January 1, 2020.
10 Section 3. This Act shall become effective upon signature by the governor or, if not
11signed by the governor, upon expiration of the time for bills to become law without signature
12by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
13vetoed by the governor and subsequently approved by the legislature, this Act shall become
14effective on the day following such approval.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 595 Engrossed 2019 Regular Session Wright
Abstract: Authorizes a nonrefundable income tax credit for donations a taxpayer makes
to a foster care organization equal to the actual amount of the donation used by the
organization to provide services to a qualified individual, or $100,000, whichever is
less.
Proposed law authorizes a nonrefundable income tax credit for donations a taxpayer makes
during a taxable year to qualifying foster care charitable organizations, hereinafter "foster
care organizations". In order to qualify for the credit, the donation shall be made by a
taxpayer who is required to file a La. income tax return.
Proposed law provides that the amount of the credit shall be equal to the amount of the
donation used by the foster care organization to provide services to a qualified individual,
or $100,000, whichever is less. The total amount of credits granted pursuant to proposed law
shall not exceed $1,000,000 per calendar year.
Proposed law requires the credits to be granted on a first-come, first-served basis. If the
total amount of credits applied for in a calendar year exceeds the amount of tax credits
authorized for that year, the excess shall be treated as having been applied for on the first day
of the subsequent year. All requests received on the same business day shall be treated as
received at the same time, and if the aggregate amount of the requests received on a single
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HB NO. 595
business day exceed the total amount of available tax credits, tax credits shall be approved
on a pro rata basis.
Proposed law authorizes a taxpayer to carry forward the amount of the tax credit not used
as an offset against the taxpayer's tax liability as a credit against subsequent income tax
liabilities for a period not to exceed five taxable years.
Proposed law defines a "qualified individual" as a child in a foster care placement program
established by the Dept. of Children and Family Services (DCFS) or a child at significant
risk of entering a foster care placement program established by the DCFS.
Proposed law defines a "foster care organization" as a charitable organization exempt from
federal income tax under federal law that, each operating year provides services to at least
100 qualified individuals in this state and spends at least 50% of its budget on services to
qualified individuals in this state. Further provides that a foster care organization that does
not spend at least 50% of its overall budget in La. is to be considered a foster care
organization for purposes of proposed law if the organization spends at least 50% of its state
budget on services to qualified individuals in La. and the organization certifies to the Dept.
of Revenue (DOR) that 100% of the donation from La. taxpayers will be spent on services
for La. residents.
Proposed law defines "services" as cash assistance, medical care, child care, food, clothing,
shelter, job placement, and job-training services or any other assistance reasonably necessary
to meet immediate basic needs that are provided for a qualified individual and used in La.
Proposed law requires the foster care organization to issue a receipt to a taxpayer indicating
the actual amount of the taxpayer's donation that is used by the organization to provide
services to a qualified individual and to annually certify, no later than Jan. 31, following the
year in which the donation is received, to DOR that the foster care organization meets all of
the requirements of proposed law.
Proposed law requires DOR to provide a standardized format for a receipt to be issued by
the foster care organization to the taxpayer. Further requires DOR to require a taxpayer to
provide a copy of the receipt when claiming the credit.
Proposed law authorizes DOR to promulgate rules and regulations in accordance with the
APA to implement the provisions of proposed law.
Effective Jan. 1, 2020 and applicable to donations made by a taxpayer to a qualifying foster
care charitable organization on and after Jan. 1, 2020.
(Adds R.S. 47:6040)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Add provisions relative to the payment of tax credits on a first-come first-served
basis.
2. Add requirement that the foster care charitable organization annually certify that
it is in compliance with the provisions of proposed law no later than Jan. 31st
following the year in which the donation was received by the organization.
3. Authorize, rather than require, DOR to promulgate rules and regulations to
implement the provisions of proposed law.
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