Education Tax Credits Encourage Private Businesses to Make Charitable Donations In Return for Tax Relief
Anchorage – Legislation to extend a successful tax credit program was signed into law today during a ceremony on the University of Alaska Anchorage campus. House Bill 233, sponsored by Representative Chris Tuck (D-Anchorage), passed the Alaska Legislature earlier this year with near unanimous support. The bill extends the Alaska Education Tax Credit Program through 2024 and adjusts the rate at which the credits are earned.
“This tax credit program has proven to be a win-win for businesses and students in Alaska. Businesses can reduce their tax liability while simultaneously supporting the institutions and programs that give Alaskans the skills they need to succeed. Students are provided more educational opportunities and programs that will put them to work in Alaska because of the financial support that would not have been available if it wasn’t for this program,” said Rep. Tuck, who serves as the Majority Leader in the Alaska House of Representatives. “You can never go wrong investing in people. This invaluable program helps make more educational resources available in Alaska, which in turn will result in better educational outcomes for Alaskans.”
The Alaska Education Tax Credit Program was created in 1987 to allow businesses to donate to educational institutions and programs in return for substantial tax credits. Nearly every school and education program in Alaska is eligible to receive donations through the program and businesses can use the tax credits to reduce their tax liability for corporate and other state taxes, including the oil and gas production tax, the fisheries business tax, and the mining license tax.
“Extending this forward-thinking tax credit program for another seven years is just another tool in the toolbox to build what we all want, great schools staffed by professional and motivated teachers intent on educating Alaska’s children and young adults for success,” said HB 233 co-sponsor Rep. Scott Kawasaki (D-Fairbanks). “Passing this bill should have been a no-brainer, but in recent years I have seen too many good bills die due to the culture of legislative inaction that’s developed in Juneau. This year, we broke through the logjam and got this good bill across the finish line thanks to the hard work of Rep. Tuck and hundreds of champions for education from across Alaska.”
Now that HB 233 has become law, for the next two years, businesses can receive a 50 percent tax credit for the first $100,000 in donations. The tax credit percentage goes up to 75 percent for donations between $100,000 and $300,000. Donations above $300,000 result in a 50 percent tax credit. In 2021, all donations will result in a 50 percent tax credit.
House Bill 233 passed the Alaska House of Representatives in April of this year by a vote of 38-1. The Alaska State Senate passed the bill unanimously on the final day of the Second Session of the 30th Alaska State Legislature. Alaska Governor Bill Walker signed the bill into law today at the University of Alaska Anchorage surrounded by university students and education stakeholders from across the state. The ceremony was held in the UAA Engineering Building, which is one of the buildings in the University of Alaska system to benefit from the Alaska Education Tax Credit Program.
For more information, please contact Alaska House Majority Coalition Press Secretary Mike Mason at (907) 444-0889.