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Md. bill would give nonprofits more money for tax credits

The Maryland General Assembly  is considering a bill that would boost the amount of tax credits a state program offers by 75 percent.

Under House Bill 108, sponsored by Baltimore County Democratic Del. Stephen Lafferty, the pot of money the state allocates under the Neighborhood and Community Assistance Program would go from $2 million to $3.5 million each fiscal year. The state Department of Housing and Community Development oversees the tax credits, which have been used for job training, food banks, housing, historical preservation and arts and culture.

Lafferty says he is optimistic passage of the bill this year, though a similar bill he sponsored last year didn't pass. At a recent hearing, six nonprofits testified or submitted letters in favor of the bill. They included Lighthouse Inc., a Baltimore County youth and family service, and the Maryland Food Bank. There was no opposition.

“It’s a competitive program," Lafferty says. "Generally, it’s oversubscribed and some groups are not able to get allocations or they get smaller allocations” for tax credits.
Under the program, individuals and businesses can claim a tax credit for 50 percent of contributions of more than $500. A donor can claim tax credits against personal income tax and corporate income tax. Unused tax credit can be carried forward for five tax years.

“For every $2 donated, the donor gets back $1 in tax credit,” he says. With the bill, “nonprofits can use the tax credits to get more contributions and to get larger contributions.”
Lafferty formerly worked in that state department and was aware of the program, which has been in existence since 1997. 
Maryland Food Bank spokeswoman Kate Sam says the nonprofit’s meal distribution has increased 187 percent over the past five years. She calls the tax credit program “critical” during that time. It is an incentive to attract new donors and to retain and even increase support from existing donors, she says. 
“The nonprofit community is in great need of resources. It is clear to me that the leverage of increased tax credits will help nonprofit groups,” says Lafferty.
Source: Stephen Lafferty, Maryland House of Delegates
Writer: Barbara Pash

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