AB 458 — Revises provisions relating to certain tax credits for the Nevada Educational Choice Scholarship Program. (BDR 32-794)

(ReprintedAssembly withBill amendmentsNo. adopted on May 21, 2019) FIRST REPRINT A.B.

458458–Committee ASSEMBLYon BILLEducation NOCHAPTER.......... .

458–COMMITTEE ON EDUCATION M ARCH 25, 2019 ____________ Referred to Committee on Taxation SUMMARY—Revises provisions relating to certain tax credits for the Nevada Educational Choice Scholarship Program.

(BDR 32-794) FISCAL NOTE:

Effect on Local Government:

No.

Effect on the State:

Yes.

~ EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

LegUnderLegislative existingCounsel’s law,Digest: financial institutions, mining businesses and other employers are required to pay an excise tax (the modified business tax) on wages paid by them.

(NRSemployers 363A.130,are 363B.110)required Existingto lawpay establishesan aexcise credittax against(the the modified business taxtax) equal to an amount which is approved by the Department of Taxation and which must not exceed the amount of any donation of money made by a taxpayer to a scholarship organization that provides grants on behalfwages ofpaid pupils percent of the federally designated level signifying poverty to allow those pupils to attend schools in this State, including private schools, chosen by thethem. parents or legal guardians of those pupils.

(NRS 363A.139,363A.130, 363B.119,363B.110) 388D.270)Existing Underlaw existingestablishes law,a credit against the Department:modified business tax equal to an amount which is approved by the Department of Taxation and which must not exceed the amount of any donation of money made by a taxpayer to a scholarship organization that provides grants on behalf of pupils who are members of a household with a household income of not more than 300 percent of the federally designated level signifying poverty to allow those pupils to guardians of those pupils.

(NRS 363A.139, 363B.119, 388D.270) Under existingts or legal law, the Department:

and (2) is authorized to approve applications for each fiscal year until the amount of the tax credits approved for the fiscal year is the amount authorized by statute for that percent of the amount authorized for the immediately preceding fiscal year,year. not110 including certain additional tax credits authorized for Fiscal Year 2017-2018.

ForThe amount of credits authorized for each fiscal year is equal to 110 percent of the amount authorized for the immediately preceding fiscal year, not Fiscal Year 2017-2018, the amount of credits authorized which are relevant for For calculating the credits authorized in subsequent fiscal years is $6,050,000.

(NRS 363A.139, 363B.119) - *AB458_R1* – 2 – This bill eliminates the annual 110 percent increase in the amount of credits authorized and, instead, provides that the amount of credits authorized for each fiscal year is a total of $6,655,000, plus any remaining amount of tax credits carried forward from the additional credit authorization made for Fiscal Year 2017-2018.2017-2018.arried EXPLANATION – Matter in bolded italics is new;

THEmatter SENATEbetween ANDbrackets ASSEMBLY,[omitted DOmaterial] ENACTis ASmaterial FOLLOWS:Dto INbe Sectionomitted. 1.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1.

- 80th Session (2019) – 2 – 2.

The Department of Taxation shall, within 20 days after receiving the application, approve or deny the application and provide to the scholarship organization notice of the decision and, if the application is approved, the amount of the credit authorized.

Except as otherwise provided in subsection 5, the Department of Taxation may, for each fiscal year, approve applications for the credit authorized by subsection 1 until the total amount of the credits authorized by subsection 1 and approved by the Department of Taxation pursuant to this subsection and subsectionsub(a) 4For ofFiscal NRSYear 363B.1192015-2016, is$5,000,000; [:

(a)(b) For Fiscal Year 2015-2016,2016-2017, $5,000,000;$5,500,000;

- *AB458_R1* – 3 – (b) For Fiscal Year 2016-2017, $5,500,000;

In addition to the amount of credits authorized by subsection 4 for Fiscal Year 2017-2018, the Department of Taxation may approve applications for the credit authorized by subsection 1 for that fiscal year until the total amount of the credits authorized by subsection 1 and approved by the Department of Taxation pursuant - 80th Session (2019) – 3 – to this subsection and subsection 5 of NRS 363B.119 is $20,000,000.

If, in Fiscal Year 2017-2018, the amount of credits authorized by subsection 1 and approved pursuant to this subsection is less than $20,000,000, the remaining amount of credits pursuant to this subsection must be carried forward and made available for approval during subsequent fiscal years until the total amount of credits authorized bybyquent subsection 1 and approved pursuant to this subsection is equal to $20,000,000.

The amount of any credit which is forfeited pursuant to subsection 2 must not be considered in calculating the amount of cre6.tscredits If a taxpayer applies to and is approved by the Department of Taxation for the credit authorized by subsection 1, the amount of the credit provided by this section is equal to the amount approved by the Department of Taxation pursuant to subsectionthis 2,subsection. which must not exceed the amount of the donation made by the taxpayer to a scholarship organization.

6.

If a taxpayer applies to and is approved by the Department of Taxation for the credit authorized by subsection 1, the amount of the credit provided by this section is equal to the amount approved by the Department of Taxation pursuant to subsection 2, which must not exceed the amount of the donation made by the taxpayer to a scholarship organization.

If the amount of the tax described in subsection 1 and otherwise due from a taxpayer is less than the credit to which the taxpayer is entitled pursuant to this section, the taxpayer may, after applying the credit to the extent of the tax otherwise due, carry the balance of the credit forward for not more than 5 years after the end of the calendar year in which the donation is made or until the balancebal8.ce ofAs used in this section, “scholarship organization” has the creditmeaning isascribed applied,to whicheverit isin earlier.NRS 388D.260.

8.Sec.

As used in this section, “scholarship organization” has the meaning ascribed to it in NRS 388D.260.

- *AB458_R1* – 4 – Sec.

A scholarship organization shall, before accepting any such donation, - 80th Session (2019) – 4 – apply to the Department of Taxation for approval of the credit authorized by subsection 1 for the donation.

Upon receipt of notice that the application has been approved, the scholarship organization shall provide notice of the approval to the taxpayer who must, not later than 30 days after receiving the notice, make the does not make the donation of money to the scholarshipthe taxpayer organization within 30 days after receiving the notice, the scholarship organization.organization shall provide notice of the failure to the Department of Taxation and the taxpayer forfeits any claim to the credit authorized by subsection 1.

If3. the taxpayer does not make the donation of money to the scholarship organization within 30 days after receiving the notice, Department of Taxation and the taxpayer forfeits any claim to theto the credit authorized by subsection 1.

The Department of Taxation shall approve or deny applications for the credit authorized by subsection 1 in the order in which the applications are received.

]pursuant $6,655,000.to subsection 2 must not be considered in calculating the amount of credits authorized for any fiscal year.

The amount of any credit which is forfeited pursuant to subsection 2 must not be considered in calculating the amount of credits authorized for any fiscal year.