                                 CODE OF VIRGINIA

TAX CREDIT FOR DONATIONS TO CERTAIN SCHOLARSHIP FOUNDATIONS (§ 58.1-439.26)

A. Notwithstanding the provisions of &#xA7; 30-19.1:11, for taxable years
beginning on or after January 1, 2013, but before January 1, 2028, a person
shall be eligible to earn a credit against any tax due under Article 2 (&#xA7;
58.1-320 et seq.) or Article 10 (&#xA7; 58.1-400 et seq.), Chapter 12 (&#xA7;
58.1-1200 et seq.), Chapter 25 (&#xA7; 58.1-2500 et seq.), or Article 2 (&#xA7;
58.1-2620 et seq.) of Chapter 26 in an amount equal to 65 percent of the value
of the monetary or marketable securities donation made by the person to a
scholarship foundation included on the list published annually by the Department
of Education in accordance with the provisions of &#xA7; 58.1-439.28.
			No tax credit shall be allowed under this article if the value of the
monetary or marketable securities donation made by an individual is less than
$500. In addition, tax credits shall be issued only for the first $125,000 in
value of donations made by the individual during the taxable year. The maximum
aggregate donations of $125,000 for the taxable year for which tax credits may
be issued and the minimum required donation of $500 shall apply on an individual
basis. Such limitation on the maximum amount of tax credits issued to an
individual shall not apply to credits issued to any business entity, including a
sole proprietorship.

B. Tax credits shall be issued to persons making monetary or marketable
securities donations to scholarship foundations by the Department of Education
on a first-come, first-served basis in accordance with procedures established by
the Department of Education under the following conditions:

   1. The total amount of tax credits that may be issued each fiscal year under
   this article shall not exceed $25 million.

   2. The amount of the credit shall not exceed the person&#8217;s tax liability
   pursuant to Article 2 (&#xA7; 58.1-320 et seq.) or Article 10 (&#xA7; 58.1-400
   et seq.), Chapter 12 (&#xA7; 58.1-1200 et seq.), Chapter 25 (&#xA7; 58.1-2500
   et seq.), or Article 2 (&#xA7; 58.1-2620 et seq.) of Chapter 26, as
   applicable, for the taxable year for which the credit is claimed. Any credit
   not usable for the taxable year for which first allowed may be carried over
   for credit against the taxes imposed upon the person pursuant to Article 2
   (&#xA7; 58.1-320 et seq.) or Article 10 (&#xA7; 58.1-400 et seq.), Chapter 12
   (&#xA7; 58.1-1200 et seq.), Chapter 25 (&#xA7; 58.1-2500 et seq.), or Article
   2 (&#xA7; 58.1-2620 et seq.) of Chapter 26, as applicable, in the next five
   succeeding taxable years or until the total amount of the tax credit has been
   taken, whichever is sooner.
   				The amount of any credit attributable to a partnership, electing small
   business corporation (S corporation), or limited liability company shall be
   allocated to the individual partners, shareholders, or members, respectively,
   in proportion to their ownership or interest in such business entities.

C. In a form approved by the Department of Education, the person seeking to make
a monetary or marketable securities donation to a scholarship foundation or a
scholarship foundation on behalf of such person shall request preauthorization
for a specified tax credit amount from the Superintendent of Public Instruction.
The Department of Education&#8217;s preauthorization notice shall accompany the
monetary or marketable securities donation from the person to the scholarship
foundation, which shall, within 40 days, return the notice to the Department of
Education certifying the value and type of donation and date received. Upon
receipt and approval by the Department of Education of the preauthorization
notice with required supporting documentation and certification of the value and
type of the donation by the scholarship foundation, the Superintendent of Public
Instruction shall as soon as practicable, and in no case longer than 30 days,
issue a tax credit certificate to the person eligible for the tax credit. The
person shall attach the tax credit certificate to the applicable tax return
filed with the Department of Taxation or the State Corporation Commission, as
applicable. The Department of Education shall provide a copy of the tax credit
certificate to the scholarship foundation.
			Preauthorization notices not acted upon by a donor within 180 days of
issuance shall be void. No tax credit shall be approved by the Department of
Education for activities that are a part of a person&#8217;s normal course of
business.

HISTORY: 2012, cc. 731, 842; 2013, cc. 713, 716; 2014, c. 176; 2016, cc. 751,
767.