Tax Credits and Stos

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					The Iowa Lutheran
School Tuition
Organization

     Scott Lindholm
       3-29-2007
              What is a
 School Tuition Organization (STO)?
 Student Tuition Organizations (STOs) were
  created by Iowa law in the summer of 2006
 The state allowed for tax credits of
   2006--$2.5million
   2007--$5 million

 The   law to date does not go past 2007


                                            Iowa Lutheran
                                            School Tuition Organizat
   What is the Iowa Lutheran STO?
 In October 2006, representatives from both IDE
  and IDW met to establish an STO for Lutheran
  schools
 All Lutheran elementary schools in Iowa are
  included, with one exception



                                      Iowa Lutheran
                                      School Tuition Organizat
       Iowa Lutheran STO Board
 Chairman—Pastor   Bob Riggert, Manning
 President—Barb Buescher, Waterloo
 Vice-President—Mark L’Heureux, Newhall
 Secretary—Carole White, Storm Lake
 Treasurer—Scott Lindholm, Davenport
 At-large #1—Dawn Champion, Waterloo
 At-large #2—Jeff Fick, Ogden
                                  Iowa Lutheran
                                  School Tuition Organizat
        How does the STO work?
 For  2007, $5 million will be allowable as Iowa
  income tax credits
 There are 10 different STOs recognized by the
  state, representing a total  34,700 students
 $5 million/34,700 equals a per-student credit
  $144 per student


                                        Iowa Lutheran
                                        School Tuition Organizat
         How does the STO work?
 Iowa  Lutheran elementary schools have an
  enrollment of 1,562 students (October 2006
  certified enrollment)
 1,562 students * $144/student  $224,928 in tax
  credits that can be issued
 The tax credit is a 65% tax credit, which means
  that $224,928/.65  $346,043 can be raised by the
  Lutheran schools in Iowa

                                       Iowa Lutheran
                                       School Tuition Organizat
    Who can benefit from the STO?
 Any child enrolled in grades K-8
 Family income cannot exceed 300% of poverty
  guidelines
   2005,traditional family of four  $59,418
   Income tax returns will be required as proof




                                             Iowa Lutheran
                                             School Tuition Organizat
             What is a tax credit?
A  tax credit is a direct reduction of taxes
 Consider a $1,000 contribution to the STO:
   The  donor receives a tax credit worth 65%, or $650,
    which is subtracted from Iowa tax owed
   In addition, the donor can also claim the deduction on
    federal income tax filings
 The donor gives $1,000, and will get at least $650
  (and probably more) back, for a net cost of $350
                                             Iowa Lutheran
                                             School Tuition Organizat
 Who is an eligible donor to the STO?
 Must  be a citizen of Iowa OR pay Iowa taxes
 All gifts must be in cash (no stocks, land, cash-
  equivalents)
 Gifts can be designated to individual schools
 All gifts will be used in the year they are given




                                         Iowa Lutheran
                                         School Tuition Organizat
          What has the STO done?
 Filed for 501(c)3 status (we have been recognized
  by the state as a legit STO)
 Established an interest-bearing Thrivent account
  for funds raised
 Established a website (still seeking a host)




                                       Iowa Lutheran
                                       School Tuition Organizat
          What do YOU need to do?
 Raise money (the easiest part)
 Once money is raised, send (or have it sent) to:
     Iowa Lutheran STO
     1122 W. Central Park
     Davenport, IA 52804
 Identify potential recipients, and have them apply
  (applications will be ready soon)

                                        Iowa Lutheran
                                        School Tuition Organizat
    The funny thing about tax credits
 People  that are looking to benefit from a tax credit
  have a tendency to give that money as late in the
  year as possible
 I anticipate December 2007 as being a very busy
  month for receipts for the program
 We will not grant any assistance until the 2008-09
  school year

                                          Iowa Lutheran
                                          School Tuition Organizat
                   Questions?
A   summary document is available which can
  address points made in this presentation more fully
 The program sounds more complicated than it will
  be in real life
 We have close contacts with the Catholic dioceses
  throughout the state, who have utilized the
  program for a year and have seen the potential
  pitfalls

                                        Iowa Lutheran
                                        School Tuition Organizat

				
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