57-18 Exhibit - Urging State of New Jersey to Implement Charitable Trust in Lieu of Local Taxes Plan.pdf

credits   as   a   quid   pro   quo,   requiring   the   donor   to   reduce   the   amount   of   their   federal   deduction   by   the   value   of   the   credit,   would   not   only   be   inconsistent   with   the   legal   precedent   but   would   also   entail   considerable   complexity,   both   for   taxpayers   and   tax   administrators.  Thus,  we  believe  that  current  law  supports  the  Full  Deduction  Rule  in  the   case   of   donations   where   the   donor   qualifies   for   state   charitable   tax   credits   equal   to   less   than   100%   of   the   donation.   While   legal   challenges   to   charitable   contribution   deductions   arising  from  such  donations  cannot  be  ruled  out,  in  our  view  those  challenges  should  fail                                                                                                                           50  CCA  201105010  (emphasis  added).   20

FEDERAL  TAX  TREATMENT  OF  STATE  CHARITABLE  TAX  CREDITS     due   to   the   decades   of   legal   precedent   supporting   the   Full   Deduction   Rule.   And   while   Congress   could   of   course   reject   those   legal   precedents   and   require   a   new   approach   through  changes  to  the  Internal  Revenue  Code,  the  policy  considerations  analyzed  above   should   give   Congress   pause   before   doing   so.   At   the   very   least,   lawmakers   should   think   carefully   about   administrability   concerns,   federalism   values,   and   the   practical   impact   on   the  more  than  one  hundred  existing  state  charitable  tax  credit  programs  in  33  states  before   upending  the  well-­‐settled  Full  Deduction  Rule.     Joe  Bankman,  Stanford  Law  School   David  Gamage,  Indiana  University  School  of  Law   Jacob  Goldin,  Stanford  Law  School   Daniel  Hemel,  University  of  Chicago  Law  School   Darien  Shanske,  UC  Davis  School  of  Law   Kirk  Stark,  UCLA  School  of  Law   Dennis  J.  Ventry,  UC  Davis  School  of  Law   Manoj  Viswanathan,  UC  Hastings  School  of  Law             21

Appendix  A   Partial  Inventory  of  Charitable  Tax  Credits  available   under  State  Individual  Income  Tax  Statutes

State Title  of  Credit Description Amount  of  Credit Statute Alabama Credit  for  contributions   Contributions  to  Scholarship   100%  of  the  total  contributions  up   Ala.  Code  §  16-­‐6D-­‐9. made  to  a  scholarship   Granting  Organizations  (SGOs),   to  50%  of  the  tax  liability  of  the   granting  organization nonprofits  that  provide  private   taxpayer,  not  to  exceed  $50,000;  a   school  scholarships  to  students   taxpayer  may  carry  forward  a  tax   in  need. credit  for  up  to  three  years;   statewide  cumulative  $30  million   per  year. Alabama Credit  for  contributions   Contributions  to  the   50%  of  the  total  contributions  up  to   Ala.  Code  §  16-­‐60-­‐351.     made  to  Career-­‐Technical   Department  of  Postsecondary   50%  of  the  tax  liability  of  the   See  also  definitions  at   Dual  Enrollment  Program Education  for  qualifying   taxpayer,  not  to  exceed  $500,000;  a   Ala.  Code  §  16-­‐60-­‐350. educational  expenses  directly   taxpayer  may  carry  forward  a  tax   associated  with  the  Career-­‐ credit  for  up  to  three  years;   Technical  Dual  Enrollment   statewide  cumulative  $5  million  per   Program,  a  program  for  eligible   year.

 Dual  Enrollment   statewide  cumulative  $5  million  per   Program,  a  program  for  eligible   year. high  school  students  to  enroll  in   college-­‐level  career  technical   education  courses  offered  at   Alabam  Community  College   System  institutions. Alabama Growing  Alabama  Credit Conributions  to  approved  local   100%  (?)  of  the  total  contributions   Ala.  Code  §  40-­‐18-­‐413 economic  development   up  to  50%  of  the  tax  liability  of  the   organizations.    The  Growing   taxpayer;  a  taxpayer  may  carry   Alabama  credit  is  repealed   forward  a  tax  credit  for  up  to  five   following  the  close  of  fiscal  year   years;  statewide  cumulative  $10   2020.  The  repeal  will  not  cause  a   million  per  year.    To  the  extent  that   reduction  or  suspension  of  any   a  Growing  Alabama  credit  is  used  by   credits  awarded  for  years  during   a  taxpayer,  the  taxpayer  will  not  be   which  the  credit  was  in  effect. allowed  any  deduction  which  would   otherwise  been  allowed  for  the   taxpayer's  contribution. Alabama Neighborhood   Voluntary

 the   taxpayer's  contribution. Alabama Neighborhood   Voluntary  assessments  paid   10%  of  the  amount  of  assessment   Ala.  Code  §  11-­‐71-­‐11.   infrastructrue  authority   under  the  Neighborhood   paid,  not  to  exceed  $1,000  in  any  tax    See  also  definitions  at     project  credit Infrastructure  Incentive  Plan  Act   year,  for  a  period  not  exceeding  10   Ala.  Code  §  11-­‐71-­‐2  and   of  2011  for  neighborhood   successive  tax  years. sunset  provision  at  Ala.   infrastructure  projects.    Note   Code  §  11-­‐71-­‐12. that  this  Act  expired  Dec.  31,   2015.    However,  all  local   neighborhood  infrastructure   authorities  created  pursuant  to   the  Act,  in  exisistence  as  of  Dec.   31,  2015,  must  continute  in   existence  until  all  existing   projects  of  the  authority  are   completed  and  the  authority   seeks  dissolution. Arizona Contributions  to   Contributions  to  a  qualifying   Up  to  $400  for  a  single  individual  or   Ariz.  Rev.  Stat.  Ann.  §  43-­‐ qualifying  charitable   charitable  organization  other   head  of  household  or  $800

l  or   Ariz.  Rev.  Stat.  Ann.  §  43-­‐ qualifying  charitable   charitable  organization  other   head  of  household  or  $800  for  a   1088(A) organizations than  a  qualifying  foster  care   married  couple  filing  jointly;  unused   charitable  organization credit  may  be  carried  foward  for  up   to  five  years. Arizona Contributions  to   Contributions  ot  a  qualifying   Up  to  $500  for  a  single  individual  or   Ariz.  Rev.  Stat.  Ann.  §  43-­‐ qualifying  foster  care   foster  care  charitable   head  of  household    or  $1,000  for  a   1088(B) charitable  organizations organization maried  couple  filing  jointly;  unused   credit  may  be  carried  foward  for  up   to  five  years.

State Title  of  Credit Description Amount  of  Credit Statute Arizona Contributions  to  private   Contributions  to  a  school  tuition   For  tax  year  2016,  up  to  $545  for  a   Ariz.  Rev.  Stat.  Ann.  §  43-­‐ school  tuition   organization  (STO) single  individual  or  head  of   1089 organization household    or  $1,090  for  a  maried   couple  filing  jointly;  these  figures   are  adjusted  annually  for  inflation. Arizona Contributions  to  certified   Contributions  to  a  school  tuition   For  tax  year  2016,  up  to  $542  for  a   Ariz.  Rev.  Stat.  Ann.  §  43-­‐ school  tuition   organization  (STO),  if  the   single  individual  or  head  of   1089.03 organization  -­‐-­‐  individual taxpayer's  contribution  to  an   household    or  $1,083  for  a  maried   STO  exceeds  the  maximum   couple  filing  jointly;  these  figures   contribution  allowed  for  the   are  adjusted  annually  for  inflation;   credit  for  contributions  to   unused  credit  may  be  carried   private  STO foward  for  up  to  five  years. Arizona Pro  rata  credit  for   Pro  rata  amount  of   Co-­‐Owners  of  the  S  corporation  may   Ariz.  Rev.  Stat.  Ann.  §  43-­‐

 rata  credit  for   Pro  rata  amount  of   Co-­‐Owners  of  the  S  corporation  may   Ariz.  Rev.  Stat.  Ann.  §  43-­‐ contributions  by  an  S   contributions  made  by  an  S   each  claim  the  pro  rata  share  of  the   1089.04 corporation  to  school   corporation  pursuant  to  Ariz.   credit  allowed  under  the  relevant   tuition  organizations Rev.  Stat.  Ann.    §43-­‐1183(F)  or   corporate  tax  statutes  based  on   Ariz.  Rev.  Stat.  Ann.    §43-­‐1184(F)   their  ownership  interests;  the  total   or  both  (§43-­‐1183  provides  a   credits  allowed  to  all  the  owners   corporate  income  tax  credit  for   may  not  exceed  the  amount  that   voluntary  cash  contributions  to   would  have  been  allowed  a  sole   a  certified  school  tuition   owner  of  the  corporation;  unused   organization,  and  §43-­‐1184   credit  may  be  carried  forward  to  up   provides  a  corporate  income  tax   to  five  years credit  for  voluntary  cash   contributions  to  certified  school   tuition  organizations  for   displaced  students  or  students   with  disabilities). Arizona Contributions  made  or   Contributions  made  (or  fees   Up  to  $200  for  a  single  individual  or   Ariz.  Rev.  Stat.  Ann.  §  43-­‐ fees  paid  to  public  

made  (or  fees   Up  to  $200  for  a  single  individual  or   Ariz.  Rev.  Stat.  Ann.  §  43-­‐ fees  paid  to  public   paid)  to  a  public  school  in   head  of  household  or  $400  for  a   1089.01 schools Arizona  for:    (1)  standardized   married  couple  filing  jointly;  unused   testing  for  college  credit  or   credit  may  be  carried  forward  to  up   readiness  offered  by  a   to  five  years educational  testing   organization,  (2)  career  and   technical  education  industry   certification  assessment,  (3)   prep.  courses  and  materials  for   standardized  testing,  (4)  CPR   training,  (5)  extracurricular   activities,  or  (6)  character   education  programs. Arizona Credit  for  donation  of  a   Donation  of  real  property  and   30%  of  the  fair  market  value  of  real   Ariz.  Rev.  Stat.  Ann.  §  43-­‐ school  site improvements  to  a  school   property  and  imporovments   1089.02 district  or  charter  school  for  use   donated. as  a  school  or  as  a  site  for  the   construction  of  a  school. Arizona Credit  for  donations  to   For  tax  years  Dec.