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- 83rd Session (2025)
Assembly Bill No. 441–Assemblymember Monroe-Moreno
CHAPTER..........
AN ACT relating to taxation; revising provisions governing the
applications for a tax credit under the Nevada Educational
Choice Scholarship Program; requiring a scholarship
organization to use a donation for which a tax credit was
received under the Program within a certain time afte r the
application for the tax credit was approved; requiring a
scholarship organization to be a domestic nonprofit
corporation; and providing other matters properly relating
thereto.
Legislative Counsel’s Digest:
Existing law imposes a payroll tax on: (1) financial institutions and on mining
companies subject to the tax on the net proceeds of minerals, with the rate of the
payroll tax set at 2 percent of the amount of the wages, as defined under existing
law, paid by the financial institution or mining com pany during each calendar
quarter in connection with its business activities; and (2) other business entities,
with the rate of the payroll tax set at 1.475 percent of the amount of the wages, as
defined under existing law but excluding the first $50,000 t hereof, paid by the
business entity during each calendar quarter in connection with business activities.
(NRS 363A.030, 363A.130, 363B.110, 612.190) Existing law provides a credit
against the payroll tax equal to an amount which must not exceed the amount of
any donation of money which is made by a taxpayer to a scholarship organization
that provides grants on behalf of pupils who are members of a household with a
household income below a certain level to attend schools in this State, including
private scho ols, chosen by the parents or legal guardians of those pupils. (NRS
363A.130, 363B.110, 388D.270) Existing law requires a scholarship organization,
before accepting a donation on behalf of a taxpayer, to apply to the Department of
Taxation for approval of the tax credit for the donation. Existing law requires the
Department to approve or deny applications in the order in which the applications
are received. (NRS 363A.139, 363B.119) Sections 1 and 2 of this bill require
applications for approval of the tax credits to be made between May 1 and June 1 of
each year and require the Department to review and approve applications on or
before July 1 of each year. Sections 1 and 2 require each application to include
certain information, including information about th e number of pupils meeting
certain criteria who have applied to the scholarship organization for a grant for the
upcoming school year and the cost to provide a grant to each such pupil. Sections 1
and 2 require the Department to approve applications for th e tax credit: (1) first, up
to an amount that would allow every scholarship organization to make a grant to
every pupil who applied for a grant and received a grant for the immediately
preceding school year; (2) second, up to an amount that would allow eve ry
scholarship organization to make a grant to every pupil who applied for a grant and
is the sibling of a pupil who received a grant for the immediately preceding school
year; and (3) finally, up to an amount that would allow every scholarship
organization to make a grant to every pupil who applied for a grant and is not in
one of the previous two categories. If sufficient tax credits are not available to
provide a grant to every pupil in a particular category, sections 1 and 2 require the
tax credits to b e allocated among the scholarship organizations on a pro rata basis
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according to the number of pupils in that category who applied to the scholarship
organization.
Sections 1 and 2 require a scholarship organization to expend the entire
amount of any dona tion for which a taxpayer receives a tax credit not later than 24
months after the date on which the application for the tax credit was approved by
the Department. Sections 1 and 2 require a scholarship organization that does not
expend the entire amount o f a donation within this time period to repay to the
Department the tax credit that was allowed for the donation in an amount equal to
the amount of the donation that was not expended.
Existing law authorizes one or more natural persons to associate to establish a
nonprofit corporation under the laws of this State. (Chapter 82 of NRS) Section 2.5
of this bill requires a scholarship organization to be a domestic nonprofit
corporation.
EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. NRS 363A.139 is hereby amended to read as
follows:
363A.139 1. Any taxpayer who is required to pay a tax
pursuant to NRS 363A.130 may receive a credit against the tax
otherwise due for any donation of money made by the taxpayer to a
scholarship organization in the manner provided by this section.
2. To receive the credit authorized by subsection 1, a taxpayer
who intends to make a donation of money to a scholarship
organization must, before making such a donation, notify the
scholarship organization of the taxpayer’s intent to make the
donation and to seek the credit authorized by subsection 1. A
scholarship organization shall, before accepting any such donation,
apply to the Department of Taxation for approval of the credit
authorized by subsection 1 for the donation. [The]
3. Not earlier than May 1 and not later than June 1 of each
year, a scholarship organization must submit to the Department of
Taxation [shall, within 20 days after receiving t he application,
approve or deny the application and ] any applications for approval
of the credits authorized by subsection 1 for the subsequent fiscal
year. Each application must include, without limitation:
(a) The number of pupils who have applied for a grant from
the scholarship organization for the upcoming school year:
(1) On whose behalf a grant was awarded by the
scholarship organization for the school year immediately
preceding the upcoming school year.
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(2) Who are the siblings of a pupil on whose behalf a grant
was awarded by the scholarship organization for the school year
immediately preceding the upcoming school year.
(3) Who a re not a pupil described by subparagraph ( 1)
or (2).
(b) The total amount of money which would be r equired for
the scholarship organization to award a grant on behalf of all the
pupils who applied to the scholarship organization for a grant for
the upcoming school year, stated separately for each category of
pupil listed in subparagraphs (1), (2) and (3) of paragraph (a).
(c) Such other information as the Department may require.
4. On or before July 1 of each year, the Department shall
review all the applications submitted pursuant to subsection 3 and
provide to [the] each scholarship organization which submitted an
application notice of [the decision ] whether the application was
approved or denied and, if the application is approved, the amount
of the credit authorized. If the total amount of credits for which
approval is requested by all the applications submitted to the
Department during the application period exceeds the amount of
credits available for the fiscal year pursuant to this section and
NRS 363B.119 , applications must be approved according to the
following order of priority:
(a) Applications must be approved up to the amount necessary
to allow each scholarship organization to provide a grant to every
pupil described by subparagraph (1) of paragraph (a) of
subsection 3. If the total amount of credits which the Department
is authorized to approve is insufficient to allow each scholarship
organization to provide a grant to every pupil described by
subparagraph (1) of paragraph (a) of subsection 3, the
Department must approve applications such that the credits are
allocated among all the sch olarship organizations which
submitted applications on a pro rata basis according to the
number of pupils in this category who applied to the scholarship
organization for a grant.
(b) If, after approving applications pursuant to paragraph (a),
the Department has not authorized the full amount of the credits
available for the fiscal year, the Department shall approve
applications submitted by scholarship organization s up to the
amount necessary to allow each scholarship organization to
provide a grant to ev ery pupil described by subparagraph (2) of
paragraph (a) of subsection 3. If the total amount of credits which
the Department is authorized to approve is insufficient to allow
each scholarship organization to provide a grant to every pupil
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described by subparagraph (2) of paragraph (a) of subsection 3,
the Department must approve applications such that the credits
are allocated among all the scholarship organizations which
submitted applications on a pro rata basis according to the
number of pupils in this category who applied to the scholarship
organization for a grant.
(c) If, after approving applications pursuant to paragraphs (a)
and (b), the Department has not authorized the full amount of the
credits available for the fiscal year, the Department shall approve
applications submitted by each scholarship organization up to the
amount necessary to allow each scholarship organization to
provide a grant to every pupil described by subparagraph (3) of
paragraph (a) of subsection 3. If the total amount of cred its which
the Department is authorized to approve is insufficient to allow
each scholarship organization to provide a grant to every pupil
described by subparagraph (3) of paragraph (a) of subsection 3,
the Department must approve applications such that th e credits
are allocated among all the scholarship organizations which
submitted applications on a pro rata basis according to the
number of pupils in this category who applied to the scholarship
organization for a grant.
5. Upon receipt of notice that th e application has been
approved, the scholarship organization shall provide notice of the
approval to the taxpayer who must, not later than 30 days after
receiving the notice, make the donation of money to the scholarship
organization. If the taxpayer does not make the donation of money
to the scholarship organization within 30 days after receiving the
notice, the scholarship organization shall provide notice of the
failure to the Department of Taxation and the taxpayer forfeits any
claim to the credit authorized by subsection 1.
[3. The Department of Taxation shall approve or deny
applications for the credit authorized by subsection 1 in the order in
which the applications are received.
4.] 6. Except as otherwise provided in subsection [5,] 7, the
Department of Taxation may, for each fiscal year, approve
applications for the credit authorized by subsection 1 until the total
amount of the credits authorized by subsection 1 and approved by
the Department of Taxation pursuant to this subsection and
subsection [4] 6 of NRS 363B.119 is $6,655,000. The amount of
any credit which is forfeited pursuant to subsection 2 must not be
considered in calculating the amount of credits authorized for any
fiscal year.
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[5.] 7. Except as otherwise provided in this subsection, in
addition to the amount of credits authorized by subsection [4] 6 for
Fiscal Years 2019-2020, 2020-2021 and 2021-2022, the Department
of Taxation may approve applications for the credit authorized by
subsection 1 for each of those fiscal yea rs until the total amount of
the credits authorized by subsection 1 and approved by the
Department of Taxation pursuant to this subsection and subsection
[5] 7 of NRS 363B.119 is $4,745,000. The provisions of subsection
[4] 6 do not apply to the amount of credits authorized by this
subsection and the amount of credits authorized by this subsection
must not be considered when determining the amount of credits
authorized for a fiscal year pursuant to subsection [4.] 6. If, in Fiscal
Year 2019 -2020, 2020 -2021 or 2021 -2022, the amount of credits
authorized by subsection 1 and approved pursuant to this subsection
and subsection [5] 7 of NRS 363B.119 is less than $4,745,000, the
remaining amount of credits pursuant to this subsection and
subsection [5] 7 of NRS 36 3B.119 must be carried forward and
made available for approval during subsequent fiscal years until the
total amount of credits authorized by subsection 1 and approved
pursuant to this subsection and subsection [5] 7 of NRS 363B.119 is
equal to $14,235,000. The amount of any credit which is forfeited
pursuant to subsection 2 must not be considered in calculating the
amount of credits authorized pursuant to this subsection.
[6.] 8. If a taxpayer applies to and is approved by the
Department of Ta xation for the credit authorized by subsection 1,
the amount of the credit provided by this section is equal to the
amount approved by the Department of Taxation pursuant to
subsection 2, which must not exceed the amount of the donation
made by the taxpaye r to a scholarship organization. The total
amount of the credit applied against the taxes described in
subsection 1 and otherwise due from a taxpayer must not exceed the
amount of the donation.
[7.] 9. If the amount of the tax described in subsection 1 a nd
otherwise due from a taxpayer is less than the credit to which the
taxpayer is entitled pursuant to this section, the taxpayer may, after
applying the credit to the extent of the tax otherwise due, carry the
balance of the credit forward for not more th an 5 years after the end
of the calendar year in which the donation is made or until the
balance of the credit is applied, whichever is earlier.
[8.] 10. A scholarship organization shall expend the entire
amount of any donation for which a taxpayer recei ved a tax credit
pursuant to this section not later than 24 months after the date on
which the application for the tax credit was approved pursuant to
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subsection 2. A scholarship organization shall repay to the
Department of Taxation the amount of any tax credit which was
authorized and approved pursuant to this section and for which
the underlying donation was not expended within the time
required by this subsection. The amount of the credit which the
scholarship organization is required to repay pursuant to this
subsection shall be equal to the amount of the donation that was
not expended within the time required.
11. As used in this section, “scholarship organization” has the
meaning ascribed to it in NRS 388D.260.
Sec. 2. NRS 363B.119 is hereby amended to read as follows:
363B.119 1. Any taxpayer who is required to pay a tax
pursuant to NRS 363B.110 may receive a credit against the tax
otherwise due for any donation of money made by the taxpayer to a
scholarship organization in the manner provided by this section.
2. To receive the credit authorized by subsection 1, a taxpayer
who intends to make a donation of money to a scholarship
organization must, before making such a donation, notify the
scholarship organization of the taxpayer’s intent to make the
donation and to seek the credit authorized by subsection 1. A
scholarship organization shall, before accepting any such donation,
apply to the Department of Taxation for approval of the credit
authorized by subsection 1 for the donation. [The]
3. Not earlier than May 1 and not later than June 1 of each
year, a scholarship organization must submit to the Department of
Taxation [shall, within 20 days after receiving the application,
approve or deny the application and ] any applications for appr oval
of the credits authorized by subsection 1 for the subsequent fiscal
year. Each application must include, without limitation:
(a) The number of pupils who have applied for a grant from
the scholarship organization for the upcoming school year:
(1) On whose behalf a grant was awarded by the
scholarship organization for the school year immediately
preceding the upcoming school year.
(2) Who are the siblings of a pupil on whose behalf a grant
was awarded by the scholarship organization for the school year
immediately preceding the upcoming school year.
(3) Who are not a pupil described by subparagraph (1)
or (2).
(b) The total amount of money which would be required for
the scholarship organization to award a grant on behalf of all the
pupils who applied to the scholarship organization for a grant for
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the upcoming school year, stated separately for each category of
pupil listed in subparagraphs (1), (2) and (3) of paragraph (a).
(c) Such other information as the Department may require.
4. On or before July 1 of each year, the Department shall
review all the applications submitted pursuant to subsection 3 and
provide to [the] each scholarship organization which submitted an
application notice of [the decision ] whether the application was
approved or denied and, if the application is approved, the amount
of the credit authorized. If the total amount of credits for w hich
approval is requested by all the applications submitted to the
Department during the application period exceeds the amount of
credits available for the fiscal year pursuant to this section and
NRS 363B.139, applications must be approved according to t he
following order of priority:
(a) Applications must be approved up to the amount necessary
to allow each scholarship organization to provide a grant to every
pupil described by subparagraph (1) of paragraph (a) of
subsection 3. If the total amount of cr edits which the Department
is authorized to approve is insufficient to allow each scholarship
organization to provide a grant to every pupil described by
subparagraph (1) of paragraph (a) of subsection 3, the
Department must approve applications such that the credits are
allocated among all the scholarship organizations which
submitted applications on a pro rata basis according to the
number of pupils in this category who applied to the scholarship
organization for a grant.
(b) If, after approving applicat ions pursuant to paragraph (a),
the Department has not authorized the full amount of the credits
available for the fiscal year, the Department shall approve
applications submitted by scholarship organizations up to the
amount necessary to allow each schola rship organization to
provide a grant to every pupil described by subparagraph (2) of
paragraph (a) of subsection 3. If the total amount of credits which
the Department is authorized to approve is insufficient to allow
each scholarship organization to prov ide a grant to every pupil
described by subparagraph (2) of paragraph (a) of subsection 3,
the Department must approve applications such that the credits
are allocated among all the scholarship organizations which
submitted applications on a pro rata basis according to the
number of pupils in this category who applied to the scholarship
organization for a grant.
(c) If, after approving applications pursuant to paragraphs (a)
and (b), the Department has not authorized the full amount of the
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credits available for the fiscal year, the Department shall approve
applications submitted by each scholarship organization up to the
amount necessary to allow each scholarship organization to
provide a grant to every pupil described by subparagraph (3) of
paragraph (a) of subsection 3. If the total amount of credits which
the Department is authorized to approve is insufficient to allow
each scholarship organization to provide a grant to every pupil
described by subparagraph (3) of paragraph (a) of subsection 3,
the Depart ment must approve applications such that the credits
are allocated among all the scholarship organizations which
submitted applications on a pro rata basis according to the
number of pupils in this category who applied to the scholarship
organization for a grant.
5. Upon receipt of notice that the application has been
approved, the scholarship organization shall provide notice of the
approval to the taxpayer who must, not later than 30 days after
receiving the notice, make the donation of money to the sch olarship
organization. If the taxpayer does not make the donation of money
to the scholarship organization within 30 days after receiving the
notice, the scholarship organization shall provide notice of the
failure to the Department of Taxation and the tax payer forfeits any
claim to the credit authorized by subsection 1.
[3. The Department of Taxation shall approve or deny
applications for the credit authorized by subsection 1 in the order in
which the applications are received.
4.] 6. Except as otherwi se provided in subsection [5,] 7, the
Department of Taxation may, for each fiscal year, approve
applications for the credit authorized by subsection 1 until the total
amount of the credits authorized by subsection 1 and approved by
the Department of Taxati on pursuant to this subsection and
subsection [4] 6 of NRS 363A.139 is $6,655,000. The amount of
any credit which is forfeited pursuant to subsection 2 must not be
considered in calculating the amount of credits authorized for any
fiscal year.
[5.] 7. In addition to the amount of credits authorized by
subsection [4] 6 for Fiscal Years 2019 -2020, 2020-2021 and 2021 -
2022, the Department of Taxation may approve applications for the
credit authorized by subsection 1 for each of those fiscal years until
the total amount of the credits authorized by subsection 1 and
approved by the Department of Taxation pursuant to this subsection
and subsection [5] 7 of NRS 363A.139 is $4,745,000. The
provisions of subsection [4] 6 do not apply to the amount of credits
authorized by this subsection and the amount of credits authorized
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by this subsection must not be considered when determining the
amount of credits authorized for a fiscal year pursuant to subsection
[4.] 6. If, in Fiscal Year 2019 -2020, 2020 -2021 or 2021 -2022, the
amount of credits authorized by subsection 1 and approved pursuant
to this subsection and subsection [5] 7 of NRS 363A.139 is less than
$4,745,000, the remaining amount of credits pursuant to this
subsection and subsection [5] 7 of NRS 363A.139 must b e carried
forward and made available for approval during subsequent fiscal
years until the total amount of credits authorized by subsection 1
and approved pursuant to this subsection and subsection [5] 7 of
NRS 363A.139 is equal to $14,235,000. The amount of any credit
which is forfeited pursuant to subsection 2 must not be considered in
calculating the amount of credits authorized pursuant to this
subsection.
[6.] 8. If a taxpayer applies to and is approved by the
Department of Taxation for the credit au thorized by subsection 1,
the amount of the credit provided by this section is equal to the
amount approved by the Department of Taxation pursuant to
subsection 2, which must not exceed the amount of the donation
made by the taxpayer to a scholarship organ ization. The total
amount of the credit applied against the taxes described in
subsection 1 and otherwise due from a taxpayer must not exceed the
amount of the donation.
[7.] 9. If the amount of the tax described in subsection 1 and
otherwise due from a taxpayer is less than the credit to which the
taxpayer is entitled pursuant to this section, the taxpayer may, after
applying the credit to the extent of the tax otherwise due, carry the
balance of the credit forward for not more than 5 years after the end
of the calendar year in which the donation is made or until the
balance of the credit is applied, whichever is earlier.
[8.] 10. A scholarship organization shall expend the entire
amount of any donation for which a taxpayer received a tax credit
pursuant to this section not later than 24 months after the date on
which the application for the tax credit was approved pursuant to
subsection 2. A scholarship organization shall repay to the
Department of Taxation the amount of any tax credit which was
authorized and approved pursuant to this section and for which
the underlying donation was not expended within the time
required by this subsection. The amount of the credit which the
scholarship organization is required to repay pursuant to this
subsection shall be equal to the amount of the donation that was
not expended within the time required.
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11. As used in this section, “scholarship organization” has the
meaning ascribed to it in NRS 388D.260.
Sec. 2.5. NRS 388D.270 is hereby amended to read as
follows:
388D.270 1. A scholarship organization must:
(a) Be a domestic nonprofit corporation organized pursuant to
chapter 82 of NRS and exempt from taxation pursuant to section
501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3).
(b) Not own or operate any school in this State, including,
without limitation, a private school, which receives any grant money
pursuant to the Nevada Educational Choice Scholarship Program.
(c) Accept donations from taxpayers and other persons and may
also solicit and accept gifts and grants.
(d) Not expend more than 5 percent of the total amount of
money accepted pursuant to paragraph (c) to pay its administrative
expenses.
(e) Provide grants on behalf of pupils who are members of a
household that has a household income which is not more than 300
percent of the federally designated level signifying poverty to allow
those pupils to attend schools in this State chosen by the parents or
legal guardians of those pupils, including, without limitation, private
schools. T he total amount of a grant provided by the scholarship
organization on behalf of a pupil pursuant to this paragraph must not
exceed $7,755 for Fiscal Year 2015-2016.
(f) Not limit to a single school the schools for which it provides
grants.
(g) Except as otherwise provided in paragraph (e), not limit to
specific pupils the grants provided pursuant to that paragraph.
2. The maximum amount of a grant provided by the
scholarship organization pursuant to paragraph (e) of subsection 1
must be adjusted on July 1 of each year for the fiscal year beginning
that day and ending June 30 in a rounded dollar amount
corresponding to the percentage of increase in the Consumer Price
Index (All Items) published by the United States Department of
Labor for the preceding c alendar year. On May 1 of each year, the
Department of Education shall determine the amount of increase
required by this subsection, establish the adjusted amounts to take
effect on July 1 of that year and notify each scholarship organization
of the adjust ed amounts. The Department of Education shall also
post the adjusted amounts on its Internet website.
3. A grant provided on behalf of a pupil pursuant to subsection
1 must be paid directly to the school chosen by the parent or legal
guardian of the pupil.
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4. A scholarship organization shall provide each taxpayer and
other person who makes a donation, gift or grant of money to the
scholarship organization pursuant to paragraph (c) of subsection 1
with an affidavit, signed under penalty of perjury, whic h includes,
without limitation:
(a) A statement that the scholarship organization satisfies the
requirements set forth in subsection 1; and
(b) The total amount of the donation, gift or grant made to the
scholarship organization.
5. Each school in which a pupil is enrolled for whom a grant is
provided by a scholarship organization shall maintain a record of the
academic progress of the pupil. The record must be maintained in
such a manner that the information may be aggregated and reported
for all such pupils if reporting is required by the regulations of the
Department of Education.
6. The Department of Education:
(a) Shall adopt regulations prescribing the contents of and
procedures for applications for grants provided pursuant to
subsection 1.
(b) May adopt such other regulations as the Department
determines necessary to carry out the provisions of this section.
7. As used in this section, “private school” has the meaning
ascribed to it in NRS 394.103.
Sec. 3. (Deleted by amendment.)
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