Georgia Offers Education Tax Incentives

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Georgia Offers Education Tax Incentives

Special Report - May 21, 2008
On May 14, Georgia became the eighth state in the nation to offer an educational tax incentive program that will open the door for thousands of students in the state to attend private schools of their choice. The legislation, which was signed into law by Georgia Governor Sonny Perdue, creates a $50 million tax credit scholarship program that allows corporations and individuals to receive tax credits when they donate money to organizations that provide scholarships for children to attend private schools. According to the Alliance for School Choice, under the new law, corporations that donate to school scholarship organizations can receive tax credits for “up to 75 percent of their total state tax liability,” while individuals that donate to school scholarship organizations can “donate up to $1,000 per person or $2,500 per married couple and receive a 100 percent tax credit for these contributions.” The law requires student scholarship organizations to use 90 percent of donations to fund scholarships.

According to the Heritage Foundation, in addition to Georgia, seven other states also offer some form of education tax incentive or credit programs, either by: 1) offering tax incentives to individuals or corporations for contributing to student scholarship organizations; or 2) allowing parents to take tax credits or deductions for education expenses (including tuition to private schools). A report released in April by the North Carolina Education Alliance (NCEA) shows that education tax credit programs in three states, Arizona, Florida, and Pennsylvania, have saved these states $204 million since they began. According to the report, education tax credit programs save states money “because tax credits cost less than what it takes to educate a student in public schools.”

“The General Assembly should expand school choice in North Carolina by joining the growing number of states that offer some type of education tax incentive program, such as the one recently signed into law in Georgia,” said John Rustin, North Carolina Family Policy Council vice president and director of government relations. “Right now, parents in North Carolina who can’t afford private or parochial schools or who are unable to home school have limited options when it comes to educating their children. Although the state does allow charter public schools, the current law limits the state to 100 charters, and thousands of children remain on charter school waiting lists. North Carolina parents deserve the opportunity to seek the best education possible for their children, and an educational tax credit program would go a long way toward making this possible,” Rustin concluded.