Community Contribution Tax Credit Program

 The Community Contribution Tax Credit Program (CCTCP) provides a financial incentive (50% tax credit) to encourage Florida corporations to make donations toward community development and housing projects for low-income persons.

The tax credit is easy for a business to receive. Corporations located any where in Florida that make donations to approved community development projects may receive a tax credit equal to 50 percent of the value of the donation. Businesses may take the credit on Florida corporate income tax, franchise tax, or insurance premium tax.

Before making a donation, please be sure it will qualify. A list of eligible organizations is available from the Office of Tourism, Trade and Economic Development (OTTED). To receive approval, a business donating to an eligible sponsor need only file a request from with OTTED. In order to claim the tax credit, simply attach proof of the approved donation when you file your state tax return.

Non-profit organizations and units of state and local governments may apply to become eligible sponsors and solicit donations under the program.

This summary is based on Florida Statutes (� 220.183 and � 624.5105) and Florida Administrative Code (Rule SE-17). Readers are advised to consult these references for additional details. The Florida Office of Tourism, Trade, and Economic Development reserves $12,000,000 of annual tax credits for donations made to eligible sponsors (Habitat for Humanity of Brevard County, Inc.) of which 80% is reserved for projects providing homeownership opportunities for households meeting requirements, criteria, and limitations.

Project means any activity undertaken by an eligible sponsor, which is designed to construct, improve, or substantially rehabilitate housing that is affordable to low-income or very-lowincome households.

Beginning July 1, 2001 persons who are registered with the department under s. 212.18 to collect or remit sales or use sales tax who make donations to eligible sponsors are eligible for tax credits against their state sales and use tax liabilities. The credit is computed as 50 percent of the person�s approved annual community contribution (cash contributions or house sponsorship - based on the appraised value of the house and/or property).

 

All tax credit applications submitted for approved projects of an eligible sponsor not exceeding $200,000 in total credits, the credits will be granted in full. The contributions must be reserved exclusively for use in a project such as building houses for low-income families. This program is in effect until June 30, 2015.

    HOW TO BECOME AN APPROVED DONOR 

WHO IS ELIGIBLE?

Any corporation paying Florida corporate income tax, franchise tax, or insurance premium tax is eligible to receive a tax credit equal to 50 percent of the value of donations to approved community development projects. Corporations must earn more than $5,000 to take advantage of the credit

WHAT IS AN ELIGIBLE CONTRIBUTION?

Cash, property, and goods donated to approved sponsors are eligible for the credit. Dues and services are not eligible donations. A list of all approved sponsors is available from the Office of Tourism, Trade and Economic Development. An organization must be approved as a Community Contribution Tax Credit Sponsor before it receives a donation eligible for this tax credit.

HOW MUCH CREDIT CAN A BUSINESS RECEIVE?

A business is eligible to receive credits of up to $200,000 per tax year. Unused credits may be carried over for up to 5 years. There are 10 million dollars in state tax credits available each fiscal year (July 1 – June 30).

TO CLAIM A 50 PERCENT TAX CREDIT YOUR BUSINESS NEEDS TO DO THE FOLLOWING:

1. Contact OTTED to determine whether or not the contribution qualifies for a tax credit and if there are tax credits available.                                                                                       2. Send a complete Application for a Community Contribution Tax Credit (Form 8E- 17TCA#01) to OTTED, with the following attachments: A copy of the check, invoice(s), or deed and appraisal; A copy of the sponsor’s approval or recertification letter; Proof that the sponsor received the donation. .                                                                                             3. Submit a copy of the approved Application for a Community Contribution Tax Credit (Form 8E-17TCA#01) and the donation approval letter when you file your Florida Corporate Income Tax Return (Form F-1120).

WHICH SPONSORSHIP PROGRAM WORKS FOR MY COMPANY?

CORPORATE SPONSOR PROGRAM -  C-Corporations (Companies paying Florida State Income Tax, Franchise Tax, or Insurance Premium Tax)

WHOLE HOUSE CONTRIBUTION via Corporate Income Tax Benefit $75,000 Average appraised value of a house contribution as established by a licensed, independent appraiser, ($90,000 appraised value less estimated $15,000 land value. $45,000 Corporate cash contribution to cover house construction expenses.

TAX BENEFIT ($37,500) Eligible Value of Company�s Contribution (50% of the appraised value of contribution) NOTE 1 ($2,475) State Income Tax Reduction (5.5% of contribution) ($15,750) Federal Income Tax Reduction (35% of contribution) $13,125 Federal Income Tax for State Tax Reduction (35% of eligible value) ($42,600) Gross Tax Benefit $7,500 NET CONTRIBUTION AFTER TAX BENEFIT

SALES TAX SPONSOR PROGRAM � S-Corporations, Partnerships and Individuals (Entities paying Florida State Sales Tax and Use Tax)

WHOLE HOUSE CONTRIBUTION via Corporate Income Tax Benefit � Example #1 $90,000 $15,000 Appraised Value (Average) Land Value (Average) $75,000 Gross Contribution $45,000 Actual Company Contribution

TAX BENEFIT ($37,500) Eligible Value of Company�s Contribution (50% of the appraised value of contribution) ($17,820) Federal Income Tax Reduction (39.6% of contribution) $14,850 Federal Income Tax for State Tax Reduction (39.6% of eligible value ) $4,530 NET CONTRIBUTION

CASH CONTRIBUTION � Example #2 $10,000 Actual Company Cash Contribution.

TAX BENEFIT ($5,000) Eligible Value of Company�s Contribution (50% of the cash contribution) ($5,000) Net Sales Tax Refund $5,000 NET CONTRIBUTION AFTER TAX REFUND

 Community Contribution Tax Credit Program Notes

 1. Community Contribution Tax Credit Program (CCTCP) provides a financial incentive (50% tax credit) to encourage Florida corporations to make donations toward community development and housing projects for lowincome persons. Each tax paying entity may take tax credits up to $200,000 annually. There is also the capacity of having a 5-year tax carry forward. Habitat for Humanity of Brevard County, Inc. guarantees this tax benefit and assumes all responsibility for staying current with the program including the state forms for filling (completion of forms takes about 10 minutes). Calculation may vary for different income tax rates. If there is interest in further checking these tax calculations, please contact Burt Von Hoff, Office of Tourism, Trade and Economic Development at (850) 487-2568.                                                                                                                                         2. Volunteer labor: The sponsor must contribute a minimum of 200 volunteer hours in the construction of the donated home. Most sponsors find employee participation is one of the highlights of the program. Many companies pay significant costs for employee motivation projects where Habitat for Humanity of Brevard County, Inc. project can produce similar results and often more effective results.                                                                                  3. Construction costs: Habitat for Humanity of Brevard County, Inc. acts as the contractor and is responsible for coordination of sub-contractors, materials, family selection and land acquisition. Habitat for Humanity of Brevard County, Inc. maintains a $1 million liability insurance policy.                                                                                                                      4. Fund Raising: Corporate sponsors are not required to do any fund raising.                         5. Upon agreement to participate, some payment of sponsor�s contribution is requested, with the remainder paid at the time construction begins. 

FOR FURTHER INFORMATION, PLEASE CONTACT: BURT C. VON HOFF EXECUTIVE OFFICE OF THE GOVERNOR OFFICE OF TOURISM, TRADE AND ECONOMIC DEVELOPMENT THE CAPITOL; SUITE 2001 TALLAHASSEE, FLORIDA 32299-0001 PHONE: 850-487-2568 FAX: 850-487-3014 e-mail: vonhofb@eog.state.fl.us

 

 

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