Public Funds for Public Schools Act

Bill: 115-hr-4269
Sponsor: full_name: Rep. Sewell, Terri A. [D-AL-7]
Introduced: 2017-11-07
Policy area: Taxation
Subjects: Charitable contributions

Education programs funding

Elementary and secondary education

Income tax credits

Income tax deductions

State and local taxation

Student aid and college costs
Latest action: action_date: 2017-11-07
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2017-11-07
action_desc: Introduced in House
text: <p><b>Public Funds for Public Schools Act </b></p> <p>This bill amends the Internal Revenue Code to require the amount of a taxpayer's deductible charitable contributions to be reduced to account for the benefits of state income tax credits and deductions provided by a state to the taxpayer for a contribution to a specified school voucher organization. </p> <p>A &quot;specified school voucher organization&quot; is an organization with the primary purpose of providing vouchers, scholarships, or other funds for the expenses of students to attend elementary or secondary schools. </p>

tv_txt: I 115th CONGRESS 1st Session H. R. 4269 IN THE HOUSE OF REPRESENTATIVES November 7, 2017 Ms. Sewell of Alabama (for herself and Mr. Danny K. Davis of Illinois ) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to eliminate the school voucher State tax credit loophole by limiting the double benefit of charitable contributions.

1. Short title This Act may be cited as the Public Funds for Public Schools Act . 2. Elimination of school voucher State tax credit loophole by limiting the double benefit of charitable contributions (a) In general Section 170(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (19) Limitation on double benefit in the case of State school voucher tax benefits (A) In general The amount of any charitable contribution otherwise taken into account under this section shall be reduced by any State school voucher tax benefit with respect to such contribution. (B) State school voucher tax benefit For purposes of this paragraph, the term State school voucher tax benefit means the aggregate amount of any State income tax credits, and excess State income tax deductions, provided to the taxpayer by a State for any contribution to a specified school voucher organization. (C) Excess State income tax deductions For purposes of this paragraph, the term excess State income tax deduction means the product of— (i) the highest rate of State income tax applicable to the taxpayer for the taxable year, multiplied by (ii) the excess (if any) of— (I) the State income tax deduction provided to the taxpayer with respect to contributions by the taxpayer to specified school voucher organizations, over (II) the amount of such contributions. (D) Specified school voucher organization For purposes of this paragraph, the term specified school voucher organization means any organization the primary purpose of which is the provision of vouchers, scholarships, or other funds, for the expenses of students to attend elementary or secondary schools. (E) Treatment of similar State benefits For purposes of this paragraph, any State benefit which is economically equivalent to a tax credit (including any payment) shall be treated as a State income tax credit for purposes of this paragraph and any State benefit which is economically equivalent to a State income tax deduction (including any exclusion from gross income) shall be treated as a State income tax deduction for purposes of this paragraph. (20) Special rule for contributions of built-in gain property to specified school voucher organizations (A) In general In the case of any contribution by the taxpayer of built-in gain property to a specified school voucher organization, such contribution shall be treated for purposes of this title as though such property were sold by the taxpayer at its fair market value immediately before such contribution and the amount of such fair market value were contributed by the taxpayer as a cash contribution to the specified school voucher organization. (B) Definitions For purposes of this paragraph— (i) Built-in gain property The term built-in gain property means any property if, immediately before the contribution of such property, the fair market value of such property exceeds the adjusted basis of such property. (ii) Specified school voucher organization The term specified school voucher organization has the meaning given such term in paragraph (19). . (b) Effective date The amendment made by this section shall apply to charitable contributions made in taxable years beginning after the date of the enactment of this Act.