PRINTER'S NO. 1134
No. 960 Session of 2001
INTRODUCED BY CORMAN, COSTA, ERICKSON, MUSTO, GREENLEAF,
BOSCOLA, HELFRICK, MOWERY, TOMLINSON, KASUNIC AND LEMMOND,
JUNE 8, 2001
REFERRED TO FINANCE, JUNE 8, 2001
AN ACT
1 Providing a tax credit for certain charitable contributions; and
2 imposing penalties.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Short title.
6 This act shall be known and may be cited as the Charity Tax
7 Credit Act.
8 Section 2. Definitions.
9 The following words and phrases when used in this act shall
10 have the meanings given to them in this section unless the
11 context clearly indicates otherwise:
12 "Bureau." The Bureau of Charitable Organizations of the
13 Department of State.
14 "Contribution." The grant, pledge or gift of money,
15 financial assistance or other similar remittance.
16 "Individual." A natural person, including the members of a
17 partnership or association and the shareholders of a
1 Pennsylvania S Corporation as defined in section 301(l) of the
2 act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
3 of 1971.
4 "Institution of purely public charity." An institution of
5 purely public charity as defined by the act of November 26, 1997
6 (P.L.508, No.55), known as the Institutions of Purely Public
7 Charity Act.
8 "Qualified institution of purely public charity." An
9 institution of purely public charity that meets all of the
10 following criteria:
11 (1) The institution has filed with the bureau and
12 received approval of an application containing information
13 which the bureau determines to be necessary in order to
14 administer the provisions of this act.
15 (2) The institution donates at least 75% of its annual
16 revenues, including contributions, to relief of poverty
17 assistance.
18 (3) The institution donates or renders gratuitously a
19 substantial portion of its goods or services or it can
20 demonstrate that it has implemented a written policy and a
21 written fee schedule based on individual or family income.
22 The schedule shall provide that no person receiving goods or
23 services from the institution pays a fee that is equal to or
24 greater than the cost of goods or services provided to that
25 person.
26 (4) The institution applies no more than 5% of its
27 annual revenues, including contributions, to lobbying, legal
28 assistance, public policy advocacy or research, voter
29 registration, political organization or carrying on
30 propaganda.
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1 (5) The institution receives no more than 50% of its
2 annual revenues, including contributions, from government
3 sources.
4 "Relief of poverty assistance." Assistance, including
5 material support, financial aid, vocational or life skills
6 instruction provided directly to persons or families, where such
7 direct assistance is provided in an effort to relieve poverty.
8 The term does not include management expenses or payments of any
9 kind to an affiliate of an institution.
10 Section 3. Charity tax credit.
11 (a) Eligibility.--An individual who makes a monetary
12 donation to a qualified institution of purely public charity
13 shall be entitled to a credit against the tax imposed by Article
14 III of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
15 Reform Code of 1971, as provided in this section.
16 (b) Amount.--
17 (1) The credit authorized by this section shall be,
18 subject to the limitation of paragraph (2), for the first
19 taxable year following the enactment of this act and every
20 year thereafter in which a donation is made, 10% of the
21 amount donated.
22 (2) In any taxable year, the credit under paragraph (1)
23 shall not exceed $500.
24 (c) Administration.--
25 (1) The Department of Revenue, in cooperation with the
26 bureau and utilizing the existing reporting procedures under
27 section 9 of the act of November 26, 1997 (P.L.508, No.55),
28 known as the Institution of Purely Public Charity Act, shall
29 administer the provisions of this act, promulgate appropriate
30 regulations and forms for that purpose and make
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1 determinations as may be required. Determinations made with
2 respect to the tax credit provided in this act may be
3 reviewed and appealed in the manner provided under Article
4 III of the act of March 4, 1971 (P.L.6, No.2), known as the
5 Tax Reform Code of 1971, for other corporate or personal tax
6 credits.
7 (2) The Department of Revenue, after the tax credit has
8 been in effect for four years, shall conduct a review of this
9 act's effectiveness and shall make a recommendation to the
10 General Assembly regarding the continuation of the credit
11 pursuant to this act.
12 (3) The bureau shall, by regulation, establish
13 application and appeal deadlines and procedures as follows:
14 (i) The bureau must approve or deny an application
15 within 60 days of receiving the completed application.
16 The application shall be deemed approved if the bureau
17 fails to act within 60 days of receiving the application.
18 (ii) The procedures established by the bureau under
19 this paragraph shall include the requirement that the
20 principal officer of an institution which no longer meets
21 the criteria for a qualified institution of purely public
22 charity notify the bureau within 90 days of the date the
23 institution no longer meets the criteria.
24 (iii) For the purposes of this subsection, at the
25 election of the individual, a contribution which is made
26 not later than the time prescribed by law for filing the
27 return of tax for taxable year, not including extensions,
28 shall be treated as made on the last day of such taxable
29 year.
30 (iv) An institution that files an application
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1 seeking designation as a qualified institution of purely
2 public charity shall pay an annual filing fee of $15. All
3 fees collected under this act shall be deposited in the
4 State Treasury. The amount of the fee may be adjusted by
5 the department by regulation.
6 (4) The bureau shall maintain a list of the entities for
7 which applications have been approved. The list of eligible
8 entities shall be effective for contributions made in the
9 calendar year beginning on January 1 after the filing
10 deadline established by the bureau.
11 (5) The bureau may randomly and periodically review the
12 applications submitted and audit the entities holding
13 approved applications to ensure that those entities meet the
14 criteria to be qualified institutions of purely public
15 charity. An institution which the bureau determines does not
16 meet the criteria for a qualified institution of purely
17 public charity shall be removed from the list of entities to
18 which contributions qualify for a tax credit.
19 (6) The bureau shall, upon request, provide to any
20 individual a list of qualified institutions of purely public
21 charity.
22 Section 4. Penalties.
23 (a) Civil.--If the principal officer of an entity fails to
24 notify the bureau within the specified time period that the
25 entity no longer meets the criteria for a qualified institution
26 of purely public charity, the bureau may levy an administrative
27 penalty not to exceed $1,000 per occurrence.
28 (b) Criminal.--A person who intentionally files an
29 application with the bureau under this act which the person
30 knows to be fraudulent commits a misdemeanor of the second
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1 degree.
2 Section 5. Severability.
3 The provisions of this act are severable. If any provision of
4 this act or its application to any person or circumstance is
5 held invalid, the invalidity shall not affect other provisions
6 or applications of this act which can be given effect without
7 the invalid provision or application.
8 Section 6. Applicability.
9 This act shall apply to tax years beginning after the
10 effective date of this act.
11 Section 7. Effective date.
12 This act shall take effect immediately.
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