Senator Dan Roberts, R-Mountain Brook, led legislation passed yesterday by the Alabama State Senate amending the Alabama Accountability Act of 2013 to increase the income tax credit claimed by an Alabama taxpayer.
“Since the Accountability Act was passed into law in 2013, it has been an resounding success raising over $176 million from the private sector to provide for educational opportunities that students otherwise could not afford,” said Roberts. “However, private sector funding of Scholarship Granting Organizations (SGO) has ebbed and flowed over the years for various reasons, including changes in the federal tax code. One of the most important elements of this bill is that it allows SGOs to have financial consistency in their budgeting and planning. This means that once a child is accepted into a participating school, the parents will have the peace of mind now in knowing that their child’s scholarship will be there to support them for years to come.
“The Alabama Accountability Act creates life-changing situations for students and their families, enabling an opportunity for school choice and enhancing the quality of life and learning for so many Alabamians. More than 97 percent of students who receive these scholarships renew them annually. That statistic alone is a true testament to the meaningful benefits this program offers to our school children,” Roberts continued. “I appreciate my colleagues on both sides of the aisle for coming together to support Alabama students and families. I am confident that the Alabama Accountability Act will continue to provide transformative opportunities for students across the state, and the modificationsapproved by the Senate today will ensure the program continues to serve students in the best possible way.”
Under current Alabama law, a taxpayer may claim a tax credit amounting to 100 percent of the total contributions the taxpayer made to a scholarship granting organization for educational scholarships during the taxable year for which the credit is claimed, up to 50 percent of the tax liability of the taxpayer, not to exceed $50,000 per taxpayer or a cumulative amount of $30,000,000 annually.
This bill increases the income tax credit a taxpayer may claim, up to 100 percent of the individual taxpayer’s liability, in an amount not to exceed $100,000 for contributors made to a scholarship granting organization for educational scholarships. Additionally, it extends the period for which scholarship granting organizations must expend scholarship funds to three calendar years.
SB261 now moves to the House of Representatives for consideration.