Charities and Schools Worried About Tax Credit Cap

Adapted by Lauren-Glenn Davitian from post shared by John Hollar at DRM on 4/13/18:

President of the UVM Foundation Shane Jacobsen this week added his voice to a chorus of concerns over a provision in the House-passed tax bill, H.911, that would cap a state tax credit for charitable donations at five percent of $10,000. Jacobsen appeared before the Senate Finance Committee on Tuesday to discuss the foundation’s concerns with the bill.

The provision was included in a bill that aims to fix a $32 million state income tax problem created by tax changes at the federal level by enacting a new system for claiming personal exemptions and credit for charitable donations under Vermont’s tax code. The Administration’s goal is to offset the increased tax burden on  Vermont households triggered by new federal tax law. The Scott Administration proposed most of the changes, but its proposal did not cap the tax credit. The House opted to cap the tax credit in their proposal and use money saved by the cap to expand a tax exemption for social security income.

Jacobsen said $138 million of $477 million recently raised under the Move Mountains Capital Campaign at UVM came from in-state donors, and that 90 percent of the dollars raised come from high-end donors. Capping the state-allowed credit “sends a message to Vermonters that the face value of the gift is not important,” he said. “This will negatively impact our philanthropic giving.”

The legislature is also considering a new income tax surcharge to fund a portion of education expenses now collected under the homestead property tax. It is not yet clear if this part of the proposal has political support to advance to a vote in the Senate. The Senate Finance Committee is discussing the bill further this week. Contact the Committee Clerk Cheryl Jette to provide testimony at cjette ‘ at’ leg.state.vt.us

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