Donations to secondary schools and community colleges for vocational education purposes

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by adding at the end the following new section:

45J.

Donations to secondary schools and community colleges for vocational education purposes

(a)

General rule

For purposes of section 38, in the case of a corporation (as defined in section 170(e)(4)(D)), the vocational education donation credit determined under this section for the taxable year is an amount equal to the sum of— (1)90 percent of the fair market value of qualified property donations made during the taxable year, plus (2)the aggregate of the intern credit amounts. (b)

Limitations

(1)

Qualified property donations

The amount allowed as a credit under subsection (a)(1) shall not exceed $50,000. (2)

Intern credit amount

(A)

In general

The amount allowed as a credit under subsection (a)(2) with respect to a qualified intern shall be the amount equal to $100 multiplied by the number of months during the taxable year in which the intern was an employee of the taxpayer. (B)

Aggregate per intern credit amounts

The aggregate amount allowed to the taxpayer as a credit under subsection (a)(2) for the taxable year shall not exceed $6,000. (c)

Qualified property donations

For purposes of this section, the term qualified property donations means a charitable contribution (as defined in section 170(c)) of tangible personal property if— (1)the contribution is to an educational organization described in section 170(b)(1)(A)(ii) which is a secondary school or community college, (2)substantially all of the use of the property by the donee is for use within the United States for educational purposes that are related to the purpose or function of the donee, (3)the property is not transferred by the donee in exchange for money, other property, or services, except for shipping, installation and transfer costs, (4)the property will fit productively into the donee’s education plan, (5)the donee’s use and disposition of the property will be in accordance with the provisions of paragraphs (2), (3), and (4), and (6)the property meets such standards, if any, as the Secretary may prescribe by regulation to assure that the property meets minimum functionality and suitability standards for educational purposes. (d)

Qualified intern

For purposes of this section— (1)

In general

The term qualified intern means an individual— (A)who is enrolled full-time as a student in a secondary school or community college, and (B)who is employed for not more than 20 hours per week by the taxpayer as part of a vocational education course approved by such school or college. (2)

Secondary school

The term secondary school means a secondary school (as defined by section 9101(38) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801(38)) which offers a program of education in vocational education. (3)

Community college

The term community college means a public or nonprofit private postsecondary regionally accredited institution that provides not less than a 2-year program of instruction that is acceptable for full credit toward a bachelor’s degree at an accredited institution and whose highest degree offered is predominantly the associate degree. (e)

Aggregation rule

For purposes of subsection (b), all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (n) or (o) of section 414 shall be treated as one person. (f)

Coordination with section 170(b)

The limitation which would (but for this subsection) apply under section 170(b) for any taxable year shall be reduced (but not below zero) by the fair market value of property taken into account in determining the credit allowed under subsection (a)(1) for such year.

(b)

Credit to be part of general business credit

Subsection (b) of section 38 of such Code (relating to general business credit) is amended by striking plus at the end of paragraph (18), by striking the period at the end of paragraph (19) and inserting , plus, and by adding at the end the following new paragraph:

(20)in the case of a corporation (as defined in section 170(e)(4)(D)), the vocational education donation credit determined under section 45J(a).

(c)

Denial of double benefit

Section 280C of such Code (relating to certain expenses for which credits are allowable) is amended by adding at the end the following new subsection:

(e)

Vocational education donations

The deduction otherwise allowed for amounts taken into account under section 45J shall be reduced by the amount of the credit determined under section 45J(a) with respect to such amounts.

(d)

Conforming amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 45I the following new item:

Sec. 45J. Donations to secondary schools and community colleges for vocational education purposes

(e)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2004.