December 15, 2019
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The Florida Statutes

The 2003 Florida Statutes

Title XIV
TAXATION AND FINANCE
Chapter 220
INCOME TAX CODE
View Entire Chapter
Section 220.187, Florida Statutes 2003

220.187  Credits for contributions to nonprofit scholarship-funding organizations.--

(1)  PURPOSE.--The purpose of this section is to:

(a)  Encourage private, voluntary contributions to nonprofit scholarship-funding organizations.

(b)  Expand educational opportunities for children of families that have limited financial resources.

(c)  Enable children in this state to achieve a greater level of excellence in their education.

(2)  DEFINITIONS.--As used in this section, the term:

(a)  "Department" means the Department of Revenue.

(b)  "Eligible contribution" means a monetary contribution from a taxpayer, subject to the restrictions provided in this section, to an eligible nonprofit scholarship-funding organization. The taxpayer making the contribution may not designate a specific child as the beneficiary of the contribution. The taxpayer may not contribute more than $5 million to any single eligible nonprofit scholarship-funding organization.

(c)  "Eligible nonpublic school" means a nonpublic school located in Florida that offers an education to students in any grades K-12 and that meets the requirements in 1subsection (5).

(d)  "Eligible nonprofit scholarship-funding organization" means a charitable organization that is exempt from federal income tax pursuant to s. 501(c)(3) of the Internal Revenue Code and that complies with the provisions of subsection (4).

(e)  "Qualified student" means a student who qualifies for free or reduced-price school lunches under the National School Lunch Act and who:

1.  Was counted as a full-time equivalent student during the previous state fiscal year for purposes of state per-student funding;

2.  Received a scholarship from an eligible nonprofit scholarship-funding organization during the previous school year; or

3.  Is eligible to enter kindergarten or first grade.

(3)  AUTHORIZATION TO GRANT SCHOLARSHIP FUNDING TAX CREDITS; LIMITATIONS ON INDIVIDUAL AND TOTAL CREDITS.--

(a)  There is allowed a credit of 100 percent of an eligible contribution against any tax due for a taxable year under this chapter. However, such a credit may not exceed 75 percent of the tax due under this chapter for the taxable year, after the application of any other allowable credits by the taxpayer. However, at least 5 percent of the total statewide amount authorized for the tax credit shall be reserved for taxpayers who meet the definition of a small business provided in s. 288.703(1) at the time of application. The credit granted by this section shall be reduced by the difference between the amount of federal corporate income tax taking into account the credit granted by this section and the amount of federal corporate income tax without application of the credit granted by this section.

(b)  The total amount of tax credits and carryforward of tax credits which may be granted each state fiscal year under this section is $88 million.

(c)  A taxpayer who files a Florida consolidated return as a member of an affiliated group pursuant to s. 220.131(1) may be allowed the credit on a consolidated return basis; however, the total credit taken by the affiliated group is subject to the limitation established under paragraph (a).

(4)  OBLIGATIONS OF ELIGIBLE NONPROFIT SCHOLARSHIP-FUNDING ORGANIZATIONS.--

(a)  An eligible nonprofit scholarship-funding organization shall provide scholarships, from eligible contributions, to qualified students for:

1.  Tuition or textbook expenses for, or transportation to, an eligible nonpublic school. At least 75 percent of the scholarship funding must be used to pay tuition expenses; or

2.  Transportation expenses to a Florida public school that is located outside the district in which the student resides.

(b)  An eligible nonprofit scholarship-funding organization shall give priority to qualified students who received a scholarship from an eligible nonprofit scholarship-funding organization during the previous school year.

(c)  The amount of a scholarship provided to any child for any single school year by all eligible nonprofit scholarship-funding organizations from eligible contributions shall not exceed the following annual limits:

1.  Three thousand five hundred dollars for a scholarship awarded to a student enrolled in an eligible nonpublic school.

2.  Five hundred dollars for a scholarship awarded to a student enrolled in a Florida public school that is located outside the district in which the student resides.

(d)  The amount of an eligible contribution which may be accepted by an eligible nonprofit scholarship-funding organization is limited to the amount needed to provide scholarships for qualified students which the organization has identified and for which vacancies in eligible nonpublic schools have been identified.

(e)  An eligible nonprofit scholarship-funding organization that receives an eligible contribution must spend 100 percent of the eligible contribution to provide scholarships in the same state fiscal year in which the contribution was received. No portion of eligible contributions may be used for administrative expenses. All interest accrued from contributions must be used for scholarships.

(f)  An eligible nonprofit scholarship-funding organization that receives eligible contributions must provide to the Auditor General an annual financial and compliance audit of its accounts and records conducted by an independent certified public accountant and in accordance with rules adopted by the Auditor General.

(g)  Payment of the scholarship by the eligible nonprofit scholarship-funding organization shall be by individual warrant or check made payable to the student's parent. If the parent chooses for his or her child to attend an eligible nonpublic school, the warrant or check must be mailed by the eligible nonprofit scholarship-funding organization to the nonpublic school of the parent's choice, and the parent shall restrictively endorse the warrant or check to the nonpublic school. An eligible nonprofit scholarship-funding organization shall ensure that, upon receipt of a scholarship warrant or check, the parent to whom the warrant or check is made restrictively endorses the warrant or check to the nonpublic school of the parent's choice for deposit into the account of the nonpublic school.

(5)  PARENT OBLIGATIONS.--As a condition for scholarship payment pursuant to paragraph (4)(g), if the parent chooses for his or her child to attend an eligible nonpublic school, the parent must inform the child's school district within 15 days after such decision.

(6)  ELIGIBLE NONPUBLIC SCHOOL OBLIGATIONS.--An eligible nonpublic school must:

(a)  Demonstrate fiscal soundness by being in operation for one school year or provide the Department of Education with a statement by a certified public accountant confirming that the nonpublic school desiring to participate is insured and the owner or owners have sufficient capital or credit to operate the school for the upcoming year serving the number of students anticipated with expected revenues from tuition and other sources that may be reasonably expected. In lieu of such a statement, a surety bond or letter of credit for the amount equal to the scholarship funds for any quarter may be filed with the department.

(b)  Comply with the antidiscrimination provisions of 42 U.S.C. s. 2000d.

(c)  Meet state and local health and safety laws and codes.

(d)  Comply with all state laws relating to general regulation of nonpublic schools.

(7)  ADMINISTRATION; RULES.--

(a)  If the credit granted pursuant to this section is not fully used in any one year because of insufficient tax liability on the part of the corporation, the unused amount may be carried forward for a period not to exceed 3 years; however, any taxpayer that seeks to carry forward an unused amount of tax credit must submit an application for allocation of tax credits or carryforward credits as required in paragraph (d) in the year that the taxpayer intends to use the carryforward. The total amount of tax credits and carryforward of tax credits granted each state fiscal year under this section is $88 million. This carryforward applies to all approved contributions made after January 1, 2002. A taxpayer may not convey, assign, or transfer the credit authorized by this section to another entity unless all of the assets of the taxpayer are conveyed, assigned, or transferred in the same transaction.

(b)  An application for a tax credit pursuant to this section shall be submitted to the department on forms established by rule of the department.

(c)  The department and the Department of Education shall develop a cooperative agreement to assist in the administration of this section. The Department of Education shall be responsible for annually submitting, by March 15, to the department a list of eligible nonprofit scholarship-funding organizations that meet the requirements of paragraph (2)(d) and for monitoring eligibility of nonprofit scholarship-funding organizations that meet the requirements of paragraph (2)(d), eligibility of nonpublic schools that meet the requirements of paragraph (2)(c), and eligibility of expenditures under this section as provided in subsection (4).

(d)  The department shall adopt rules necessary to administer this section, including rules establishing application forms and procedures and governing the allocation of tax credits and carryforward credits under this section on a first-come, first-served basis.

(e)  The Department of Education shall adopt rules necessary to determine eligibility of nonprofit scholarship-funding organizations as defined in paragraph (2)(d) and according to the provisions of subsection (4) and identify qualified students as defined in paragraph (2)(e).

(8)  DEPOSITS OF ELIGIBLE CONTRIBUTIONS.--All eligible contributions received by an eligible nonprofit scholarship-funding organization shall be deposited in a manner consistent with s. 17.57(2).

History.--s. 5, ch. 2001-225; s. 42, ch. 2002-218; s. 258, ch. 2003-261; s. 9, ch. 2003-391.

1Note.--Redesignated as subsection (6) by s. 9, ch. 2003-391.

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