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Hearing Scheduled on Restoring Charitable Giving Deductions, and Other Updates from Augusta

by Scott Schnapp

We are well into the legislative session, and have updates to share about the bills we’re watching.

statehouseEncouraging Charitable Contributions

In the last state budget, the legislature capped itemized deductions at $27,500, including charitable giving (undoing the work done in the 126th legislature with the passage of LD 1664 – An Act To Encourage Charitable Contributions to Nonprofit Organizations, which carved out the charitable giving deduction from the overall cap).

This brings us to LD 1519 – An Act To Amend the Tax Laws To Strengthen Charitable Institutions, Encourage Home Ownership and Manage Medical Expenses, which would remove the cap on charitable deductions, along with a host of other items. The bill has attracted bipartisan co-sponsorship, but its fiscal note will have a huge impact on its passage and what the final version looks like.

What can you do?

Work with MANP to encourage legislators to preserve the long-time, effective incentive for charitable giving and vote Ought to Pass on LD 1519.

  • Testify! The public hearing on this bill will be held on February 24th at 1 p.m. MANP will be providing testimony in favor on the charitable deduction portion of this bill, and if you’d like to join us in presenting testimony, please contact Scott Schnapp at 871-1885. (Not experienced? No worries! We’ll help prep you, plus we’ve got a new recorded webinar on presenting compelling testimony!)
  • Educate your legislators on the Taxation Committee. You’re welcome to review and adapt these detailed LD 1519 Talking Points.

Why are we advocating on this bill? 

Download detailed talking points from MANP and PretiFlaherty, but some highlights are:

  • The charitable deduction is the only provision that encourages taxpayers to give away a portion of their income to benefit others. The true beneficiaries of charitable deductions are the individuals and communities relying on nonprofit programs, services, and innovations.
  • Maine nonprofits could see a decline in charitable giving of almost $20,000,000 annually at a time when the demand for their services is increasing and their ability to meet those demands is already strained.
  • A recent report issued by the US Trust revealed that 45% of high net-worth donors would give less without the charitable deduction, and a recent study by the PEW Charitable Trust chronicles the harm done to the nonprofit sector in other states where charitable giving incentives were removed at the state level.
  • Maine is already close to the bottom of the county in charitable giving per capita. Should LD 1519 fail and the itemized deduction cap stand as is, Maine nonprofits will be further constrained.
  • In both Hawaii and Michigan, two states that passed laws reducing state tax incentives for charitable giving in 2011, research identifies the types and amount of charitable giving that were negatively impacted by the acts of the legislatures.
  • Maine nonprofits are critical partners with state and local governments. They supplement government funding with charitable giving, volunteerism, and in-kind donations to have greater impact on the important issues of our times.

Other Bills We’re Watching

LD 1521 – An Act to Create Equity among Essential Nonprofit Health Care Providers in Relation to the Sales Tax

This bill extends to all incorporated nonprofit community health centers the exemption from the sales and use tax currently provided for sales made to incorporated nonprofit rural community health centers. This bill has been heard and worked and voted on with amendments, but the amendments are not yet ready, and we will continue to monitor.

LD 1510 – An Act To Improve the Disclosure of Financial Activities by Political Action Committees and Ballot Question Committees

This bill effects how nonprofits who are involved with ballot question committees file their reports. An amended version was passed out of the Legal and Veterans Affairs committee. This bill has been heard and worked and voted on with amendments, but the amendments are not yet ready, and we will continue to monitor.

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