Substitute House Bill 408

Substitute House Bill 408, introduced by Representatives Barbara Sears (R-Sylvania) and Ron Amstutz (R-Wooster), would create a nonrefundable tax credit for authorized donations to the permanent endowment fund of an eligible community foundation. The bill defines “eligible community foundation” as a qualified community foundation that has been accredited by the community foundations national standards board. However, the bill sets limitations on the credits. For donations less than $1000 made during a year, the credit would be equal to 50% of the donation. Authorized donations over $1000 would be eligible for a credit of 20% of the donation amount, but may not exceed $10,000 for individual returns or $20,000 for joint returns. In addition, the total amount of the credits would be capped by the state at $20 million per year.

 How the program would work  

A taxpayer would need approval from the Department of Taxation prior to making a donation  in order to be eligible for the tax credit. If the Department of Taxation approves a taxpayer’s application and the total credit limit of $20 million has not been reached, the taxpayer must make the donation within 60 days of receiving approval. If a community foundation does not receive the actual donation within 60 days, the foundation is required to notify the Department of Taxation so the previously approved donation amount can be placed back in to the pool of funds making them available to other taxpayers.

Each community foundation that received eligible donations would be required to report to the Department of Taxation the total amount of donations the foundation received in the previous year and include a list of the donations by range, including how many were less than $500, $500–$1000, $1000–$2500, $2500–$5000, $5000–$10,000, and more than $10,000.

The Department of Taxation would report to the Governor and the Legislature, for the previous year, the number of authorized donations for which a tax credit was claimed, the total amount  of donations received by foundations, and the total amount of credits that were granted for such donations.

The bill specifies that the credit cannot be used against the Local Government Fund (LGF) or the Public Library Fund (PLF) and requires the Director of Budget and Management to credit those funds back to the level of the previous year before June of each year. The program would sunset at the end of 2019.

Status of House Bill 208

The bill passed out of the House Finance and Appropriations Committee on February 26, 2014, and passed the full Ohio House on February 12, 2014, by a vote of 81-8. The bill now moves to the Ohio Senate for consideration.