REPORT TITLE:
Teachers; Tax Deduction


DESCRIPTION:
Allows teachers to claim a tax deduction for school supplies
purchased for their classrooms.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2106
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO TAX DEDUCTIONS FOR TEACHERS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 235-2.4, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§235-2.4  Operation of certain Internal Revenue Code
 
 4 provisions.(a)  Section 63 (with respect to taxable income
 
 5 defined) of the Internal Revenue Code shall be operative for the
 
 6 purposes of this chapter, except that the standard deduction
 
 7 amount in section 63(c) of the Internal Revenue Code shall
 
 8 instead mean:
 
 9      (1)  $1,900 in the case of:
 
10           (A)  A joint return as provided by section 235-93; or
 
11           (B)  A surviving spouse (as defined in section 2(a) of
 
12                the Internal Revenue Code);
 
13      (2)  $1,650 in the case of a head of household (as defined
 
14           in section 2(b) of the Internal Revenue Code);
 
15      (3)  $1,500 in the case of an individual who is not married
 
16           and who is not a surviving spouse or head of household;
 
17           or
 
18      (4)  $950 in the case of a married individual filing a
 
19           separate return. 
 

 
Page 2                                                     2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 Section 63(c)(4) shall not be operative in this State.  Section
 
 2 63(c)(5) shall be operative, except that the limitation on basic
 
 3 standard deduction in the case of certain dependents shall be the
 
 4 greater of $500 or such individual's earned income.  Section
 
 5 63(f) shall not be operative in this State.
 
 6      The standard deduction amount for nonresidents shall be
 
 7 calculated pursuant to section 235-5.
 
 8      (b)  Section 72 (with respect to annuities; certain proceeds
 
 9 of endowment and life insurance contracts) of the Internal
 
10 Revenue Code shall be operative for purposes of this chapter and
 
11 be interpreted with due regard to section 235-7(a), except that
 
12 the ten per cent additional tax on early distributions from
 
13 retirement plans in section 72(t) shall not be operative for
 
14 purposes of this chapter.
 
15      (c)  Section 121 (with respect to exclusion of gain from
 
16 sale of principal residence) of the Internal Revenue Code shall
 
17 be operative for purposes of this chapter, except that for the
 
18 election under section 121(f), a reference to section 1034
 
19 treatment means a reference to section 235-2.4(n) in effect for
 
20 taxable year 1997.
 
21      (d)  Section 162 (with respect to trade or business
 
22 expenses) of the Internal Revenue Code shall be operative for the
 

 
 
 
Page 3                                                     2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 purposes of this chapter; provided that school teachers may
 
 2 deduct the cost of school supplies purchased soley for their
 
 3 students or classrooms; provided further that section 67 (with
 
 4 respect to the two per cent floor on miscellaneous deductions) of
 
 5 the Internal Revenue Code shall not apply to such deductions.
 
 6 For treatment, see section 235-7(h).
 
 7      [(d)] (e)  Section 219 (with respect to retirement savings)
 
 8 of the Internal Revenue Code shall be operative for the purpose
 
 9 of this chapter.  For the purpose of computing the limitation on
 
10 the deduction for active participants in certain pension plans
 
11 for state income tax purposes, adjusted gross income as used in
 
12 section 219 as operative for this chapter means federal adjusted
 
13 gross income.
 
14      [(e)] (f)  Section 220 (with respect to medical savings
 
15 accounts) of the Internal Revenue Code shall be operative for the
 
16 purpose of this chapter, but only with respect to medical
 
17 services accounts that have been approved by the secretary of the
 
18 Treasury of the United States.
 
19      [(f)] (g)  Section 408A (with respect to Roth Individual
 
20 Retirement Accounts) of the Internal Revenue Code shall be
 
21 operative for the purposes of this chapter.  For the purposes of
 
22 determining the aggregate amount of contributions to a Roth
 

 
 
 
Page 4                                                     2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 Individual Retirement Account or qualified rollover contribution
 
 2 to a Roth Individual Retirement Account from an individual
 
 3 retirement plan other than a Roth Individual Retirement Account,
 
 4 adjusted gross income as used in section 408A as operative for
 
 5 this chapter means federal adjusted gross income.
 
 6      [(g)] (h)  In administering the provisions of sections 410
 
 7 to 417 (with respect to special rules relating to pensions,
 
 8 profit sharing, stock bonus plans, etc.), sections 418 to 418E
 
 9 (with respect to special rules for multiemployer plans), and
 
10 sections 419 and 419A (with respect to treatment of welfare
 
11 benefit funds) of the Internal Revenue Code, the department of
 
12 taxation shall adopt rules under chapter 91 relating to the
 
13 specific requirements under such sections and to such other
 
14 administrative requirements under those sections as may be
 
15 necessary for the efficient administration of sections 410 to
 
16 419A.
 
17      In administering sections 401 to 419A (with respect to
 
18 deferred compensation) of the Internal Revenue Code, Public Law
 
19 93-406, section 1017(i), shall be operative for the purposes of
 
20 this chapter.
 
21      In administering section 402 (with respect to the taxability
 
22 of beneficiary of employees' trust) of the Internal Revenue Code,
 

 
 
 
Page 5                                                     2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 the tax imposed on lump sum distributions by section 402(e) of
 
 2 the Internal Revenue Code shall be operative for the purposes of
 
 3 this chapter and the tax imposed therein is hereby imposed by
 
 4 this chapter at the rate determined under this chapter.
 
 5      [(h)] (i)  Section 468B (with respect to special rules for
 
 6 designated settlement funds) of the Internal Revenue Code shall
 
 7 be operative for the purposes of this chapter and the tax imposed
 
 8 therein is hereby imposed by this chapter at a rate equal to the
 
 9 maximum rate in effect for the taxable year imposed on estates
 
10 and trusts under section 235-51.
 
11      [(i)] (j)  Section 469 (with respect to passive activities
 
12 and credits limited) of the Internal Revenue Code shall be
 
13 operative for the purposes of this chapter.  For the purpose of
 
14 computing the offset for rental real estate activities for state
 
15 income tax purposes, adjusted gross income as used in section 469
 
16 as operative for this chapter means federal adjusted gross
 
17 income.
 
18      [(j)] (k)  Sections 512 to 514 (with respect to taxation of
 
19 business income of certain exempt organizations) of the Internal
 
20 Revenue Code shall be operative for the purposes of this chapter
 
21 as provided in this subsection.
 
22      "Unrelated business taxable income" means the same as in the
 

 
 
 
Page 6                                                     2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 Internal Revenue Code, except that in the computation thereof
 
 2 sections 235-3 to 235-5, and 235-7 (except subsection (c)), shall
 
 3 apply, and in the determination of the net operating loss
 
 4 deduction there shall not be taken into account any amount of
 
 5 income or deduction which is excluded in computing the unrelated
 
 6 business taxable income.  Unrelated business taxable income shall
 
 7 not include any income from a prepaid legal service plan.
 
 8      For a person described in section 401 or 501 of the Internal
 
 9 Revenue Code, as modified by section 235-2.3, the tax imposed by
 
10 section 235-51 or 235-71 shall be imposed upon the person's
 
11 unrelated business taxable income.
 
12      [(k)] (l)  Section 521 (with respect to cooperatives) and
 
13 subchapter T (sections 1381 to 1388, with respect to cooperatives
 
14 and their patrons) of the Internal Revenue Code shall be
 
15 operative for the purposes of this chapter as to any cooperative
 
16 fully meeting the requirements of section 421-23, except that
 
17 Internal Revenue Code section 521 cooperatives need not be
 
18 organized in Hawaii.
 
19      [(l)] (m)  Sections 527 (with respect to political
 
20 organizations) and 528 (with respect to certain homeowners
 
21 associations) of the Internal Revenue Code shall be operative for
 
22 the purposes of this chapter and the taxes imposed in each such
 

 
 
 
Page 7                                                     2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 section are hereby imposed by this chapter at the rates
 
 2 determined under section 235-71.
 
 3      [(m)] (n)  Section 530 (with respect to education individual
 
 4 retirement accounts) of the Internal Revenue Code shall be
 
 5 operative for the purposes of this chapter.  For the purpose of
 
 6 determining the maximum amount that a contributor could make to
 
 7 an education individual retirement account for state income tax
 
 8 purposes, modified adjusted gross income as used in section 530
 
 9 for this chapter means federal modified adjusted gross income as
 
10 defined in section 530.
 
11      [(n)] (o)  Section 641 (with respect to imposition of tax)
 
12 of the Internal Revenue Code shall be operative for the purposes
 
13 of this chapter subject to the following:
 
14      (1)  The deduction for exemptions shall be allowed as
 
15           provided in section 235-54(b).
 
16      (2)  The deduction for contributions and gifts in
 
17           determining taxable income shall be limited to the
 
18           amount allowed in the case of an individual, unless the
 
19           contributions and gifts are to be used exclusively in
 
20           the State.
 
21      (3)  The tax imposed by section 1(e) of the Internal Revenue
 
22           Code as applied by section 641 of the Internal Revenue
 

 
 
 
Page 8                                                     2106
                                     H.B. NO.           
                                                        
                                                        

 
 1           Code is hereby imposed by this chapter at the rate and
 
 2           amount as determined under section 235-51 on estates
 
 3           and trusts.
 
 4      [(o)] (p)  Section 667 (with respect to treatment of amounts
 
 5 deemed distributed by trusts in preceding years) of the Internal
 
 6 Revenue Code shall be operative for the purposes of this chapter
 
 7 and the tax imposed therein is hereby imposed by this chapter at
 
 8 the rate determined under this chapter; except that the reference
 
 9 to tax-exempt interest to which section 103 of the Internal
 
10 Revenue Code applies in section 667(a) of the Internal Revenue
 
11 Code shall instead be a reference to tax-exempt interest to which
 
12 section 235-7(b) applies.
 
13      [(p)] (q)  Section 685 (with respect to treatment of
 
14 qualified funeral trusts) of the Internal Revenue Code shall be
 
15 operative for purposes of this chapter, except that the tax
 
16 imposed under this chapter shall be computed at the tax rates
 
17 provided under section 235-51, and no deduction for the exemption
 
18 amount provided in section 235-54(b) shall be allowed.  The cost-
 
19 of-living adjustment determined under section 1(f)(3) of the
 
20 Internal Revenue Code shall be operative for the purpose of
 
21 applying section 685(c)(3) under this chapter.
 
22      [(q)] (r)  Section 1212 (with respect to capital loss
 

 
 
 
Page 9                                                     2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 carrybacks and carryforwards) of the Internal Revenue Code shall
 
 2 be operative for the purposes of this chapter; except that for
 
 3 the purposes of this chapter the capital loss carryback
 
 4 provisions of section 1212 shall not be operative and the capital
 
 5 loss carryforward allowed by section 1212(a) shall be limited to
 
 6 five years.
 
 7      [(r)] (s)  Subchapter S (sections 1361 to 1379) (with
 
 8 respect to tax treatment of S corporations and their
 
 9 shareholders) of chapter 1 of the Internal Revenue Code shall be
 
10 operative for the purposes of this chapter as provided in part
 
11 VII.
 
12      [(s)] (t)  Section 6015 (with respect to relief from joint
 
13 and several liability on joint return) of the Internal Revenue
 
14 Code is operative for purposes of this chapter.
 
15      [(t)] (u)  Subchapter C (sections 6221 to 6233) (with
 
16 respect to tax treatment of partnership items) of chapter 63 of
 
17 the Internal Revenue Code shall be operative for the purposes of
 
18 this chapter.
 
19      [(u)] (v)  Subchapter D (sections 6240 to 6255) (with
 
20 respect to simplified audit procedures for electing large
 
21 partnerships) of the Internal Revenue Code shall be operative for
 
22 the purposes of this chapter, with due regard to chapter 232
 

 
 
 
Page 10                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 relating to tax appeals.
 
 2      [(v)] (w)  Section 6511(h) (with respect to running of
 
 3 periods of limitation suspended while taxpayer is unable to
 
 4 manage financial affairs due to disability) of the Internal
 
 5 Revenue Code shall be operative for purposes of this chapter,
 
 6 with due regard to section 235-111 relating to the limitation
 
 7 period for assessment, levy, collection, or credit.
 
 8      [(w)] (x)  Section 7518 (with respect to capital
 
 9 construction fund for commercial fishers) of the Internal Revenue
 
10 Code shall be operative for the purposes of this chapter.
 
11 Qualified withdrawals for the acquisition, construction, or
 
12 reconstruction of any qualified asset which is attributable to
 
13 deposits made before the effective date of this section shall not
 
14 reduce the basis of the asset when withdrawn.  Qualified
 
15 withdrawals shall be treated on a first-in-first-out basis."
 
16      SECTION 2.  Section 235-7, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "§235-7 Other provisions as to gross income, adjusted gross
 
19 income, and taxable income.(a)  There shall be excluded from
 
20 gross income, adjusted gross income, and taxable income:
 
21      (1)  Income not subject to taxation by the State under the
 
22           Constitution and laws of the United States;
 

 
 
 
Page 11                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1      (2)  Rights, benefits, and other income exempted from
 
 2           taxation by section 88-91, having to do with the state
 
 3           retirement system, and the rights, benefits, and other
 
 4           income, comparable to the rights, benefits, and other
 
 5           income exempted by section 88-91, under any other
 
 6           public retirement system;
 
 7      (3)  Any compensation received in the form of a pension for
 
 8           past services;
 
 9      (4)  Compensation paid to a patient affected with Hansen's
 
10           disease employed by the State or the United States in
 
11           any hospital, settlement, or place for the treatment of
 
12           Hansen's disease;
 
13      (5)  Except as otherwise expressly provided, payments made
 
14           by the United States or this State, under an act of
 
15           Congress or a law of this State, which by express
 
16           provision or administrative regulation or
 
17           interpretation are exempt from both the normal and
 
18           surtaxes of the United States, even though not so
 
19           exempted by the Internal Revenue Code itself;
 
20      (6)  Any income expressly exempted or excluded from the
 
21           measure of the tax imposed by this chapter by any other
 
22           law of the State, it being the intent of this chapter
 

 
 
 
Page 12                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1           not to repeal or supersede any such express exemption
 
 2           or exclusion;
 
 3      (7)  The first $1,750 received by each member of the reserve
 
 4           components of the Army, Navy, Air Force, Marine Corps,
 
 5           or Coast Guard of the United States of America, and the
 
 6           Hawaii national guard as compensation for performance
 
 7           of duty;
 
 8      (8)  Income derived from the operation of ships or aircraft
 
 9           if the income is exempt under the Internal Revenue Code
 
10           pursuant to the provisions of an income tax treaty or
 
11           agreement entered into by and between the United States
 
12           and a foreign country, provided that the tax laws of
 
13           the local governments of that country reciprocally
 
14           exempt from the application of all of their net income
 
15           taxes, the income derived from the operation of ships
 
16           or aircraft which are documented or registered under
 
17           the laws of the United States;
 
18      (9)  The value of legal services provided by a prepaid legal
 
19           service plan to a taxpayer, the taxpayer's spouse, and
 
20           the taxpayer's dependents;
 
21     (10)  Amounts paid, directly or indirectly, by a prepaid
 
22           legal service plan to a taxpayer as payment or
 

 
 
 
Page 13                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1           reimbursement for the provision of legal services to
 
 2           the taxpayer, the taxpayer's spouse, and the taxpayer's
 
 3           dependents;
 
 4     (11)  Contributions by an employer to a prepaid legal service
 
 5           plan for compensation (through insurance or otherwise)
 
 6           to the employer's employees for the costs of legal
 
 7           services incurred by the employer's employees, their
 
 8           spouses, and their dependents; and
 
 9     (12)  Amounts received in the form of a monthly surcharge by
 
10           a utility acting on behalf of an affected utility under
 
11           section 269-16.3 shall not be gross income, adjusted
 
12           gross income, or taxable income for the acting utility
 
13           under this chapter.  Any amounts retained by the acting
 
14           utility for collection or other costs shall not be
 
15           included in this exemption.
 
16      (b)  There shall be included in gross income, adjusted gross
 
17 income, and taxable income:  (1) unless excluded by this chapter
 
18 relating to the uniformed services of the United States, cost-of-
 
19 living allowances and other payments exempted by section 912 of
 
20 the Internal Revenue Code, but section 119 of the Internal
 
21 Revenue Code nevertheless shall apply; (2) unless expressly
 
22 exempted or excluded as provided by subsection (a)(6), interest
 

 
 
 
Page 14                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 on the obligations of a State or a political subdivision thereof.
 
 2      (c)  The deductions of or based on dividends paid or
 
 3 received, allowed to a corporation under chapter 1, subchapter B,
 
 4 Part VIII of the Internal Revenue Code, shall not be allowed.  In
 
 5 lieu thereof there shall be allowed as a deduction the entire
 
 6 amount of dividends received by any corporation upon the shares
 
 7 of stock of a national banking association, qualifying dividends,
 
 8 as defined in section 243(b) of the Internal Revenue Code,
 
 9 received by members of an affiliated group, or dividends received
 
10 by a small business investment company operating under the Small
 
11 Business Investment Act of 1958 (Public Law 85-699) upon shares
 
12 of stock qualifying under paragraph (3), seventy per cent of the
 
13 amount received by any corporation as dividends:
 
14      (1)  Upon the shares of stock of another corporation, if at
 
15           the date of payment of the dividend at least ninety-
 
16           five per cent of the other corporation's capital stock
 
17           is owned by one or more corporations doing business in
 
18           this State and if the other corporation is subjected to
 
19           an income tax in another jurisdiction (but subjection
 
20           to federal tax does not constitute subjection to income
 
21           tax in another jurisdiction);
 
22      (2)  Upon the shares of stock of a bank or insurance company
 

 
 
 
Page 15                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1           organized and doing business under the laws of the
 
 2           State;
 
 3      (3)  Upon the shares of stock of another corporation, if at
 
 4           least fifteen per cent of the latter corporation's
 
 5           business, for the taxable year of the latter
 
 6           corporation preceding the payment of the dividend, has
 
 7           been attributed to this State.
 
 8 However, except for national bank dividends, the deductions under
 
 9 this subsection are not allowed when they would not have been
 
10 allowed under section 243 of the Internal Revenue Code, as
 
11 amended by Public Law 85-866, by reason of subsections (b) and
 
12 (c) of section 246 of the Internal Revenue Code.  For the
 
13 purposes of this subsection fifteen per cent of a corporation's
 
14 business shall be deemed to have been attributed to this State if
 
15 fifteen per cent or more of the entire gross income of the
 
16 corporation as defined in this chapter (which for the purposes of
 
17 this subsection shall be computed without regard to source in the
 
18 State and shall include income not taxable by reason of the fact
 
19 that it is from property not owned in the State or from a trade
 
20 or business not carried on in the State in whole or in part),
 
21 under section 235-5 and the other provisions of this chapter,
 
22 shall have been attributed to the State and subjected to
 

 
 
 
Page 16                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 assessment of the taxable income therefrom (including the
 
 2 determination of the resulting net loss, if any).
 
 3      (d)  (1)  For taxable years ending before January 1, 1967,
 
 4           the net operating loss deductions allowed as carrybacks
 
 5           and carryovers by the Internal Revenue Code shall not
 
 6           be allowed.  In lieu thereof the net operating loss
 
 7           deduction shall consist of the excess of the deductions
 
 8           allowed by this chapter over the gross income, computed
 
 9           with the modifications specified in paragraphs (1) to
 
10           (4) of section 172(d) of the Internal Revenue Code, and
 
11           with the further modification stated in paragraph (3)
 
12           hereof; and shall be allowed as a deduction in
 
13           computing the taxable income of the taxpayer for the
 
14           succeeding taxable year.
 
15      (2)  (A)  With respect to net operating loss deductions
 
16                resulting from net operating losses for taxable
 
17                years ending after December 31, 1966, the net
 
18                operating loss deduction provisions of the
 
19                Internal Revenue Code shall apply, provided that
 
20                there shall be no net operating loss deduction
 
21                carried back to any taxable year ending prior to
 
22                January 1, 1967.
 

 
 
 
Page 17                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1           (B)  In the case of a taxable year beginning in 1966
 
 2                and ending in 1967, the entire amount of all net
 
 3                operating loss deductions carried back to the
 
 4                taxable year shall be limited to that portion of
 
 5                taxable income for such taxable year which the
 
 6                number of days in 1967 bears to the total days in
 
 7                the taxable year ending in 1967.
 
 8           (C)  The computation of any net operating loss
 
 9                deduction for a taxable year covered by this
 
10                subsection shall require the further modifications
 
11                stated in paragraphs (3), (4), and (5) of this
 
12                subsection.
 
13      (3)  In computing the net operating loss deduction allowed
 
14           by this subsection there shall be included in gross
 
15           income the amount of interest which is excluded from
 
16           gross income by subsection (a), decreased by the amount
 
17           of interest paid or accrued which is disallowed as a
 
18           deduction by subsection (e).  In determining the amount
 
19           of the net operating loss deduction under this
 
20           subsection of any corporation, there shall be
 
21           disregarded the net operating loss of such corporation
 
22           for any taxable year for which the corporation is an
 

 
 
 
Page 18                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1           electing small business corporation.
 
 2      (4)  No net operating loss carryback or carryover shall be
 
 3           allowed by this chapter if not allowed under section
 
 4           172 of the Internal Revenue Code.
 
 5      (5)  The election to relinquish the entire carryback period
 
 6           with respect to a net operating loss allowed under
 
 7           section 172(b)(3)(C) of the Internal Revenue Code shall
 
 8           be operative for the purposes of this chapter; provided
 
 9           that no taxpayer shall make such an election as to a
 
10           net operating loss of a business where such net
 
11           operating loss occurred in the taxpayer's business
 
12           prior to the taxpayer entering business in this State.
 
13      (e)  There shall be disallowed as a deduction the amount of
 
14 interest paid or accrued within the taxable year on indebtedness
 
15 incurred or continued, (1) to purchase or carry bonds the
 
16 interest upon which is excluded from gross income by subsection
 
17 (a); or (2) to purchase or carry property owned without the
 
18 State, or to carry on trade or business without the State, if the
 
19 taxpayer is a person taxable only upon income from sources in the
 
20 State.
 
21      (f)  Losses of property as the result of tidal wave,
 
22 hurricane, earthquake, or volcanic eruption, or as a result of
 

 
 
 
Page 19                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1 flood waters overflowing the banks or walls of a river or stream,
 
 2 or from any other natural disaster, to the extent of the amount
 
 3 deductible, under this chapter, not compensated for by insurance
 
 4 or otherwise, may be deducted in the taxable year in which
 
 5 sustained, or at the option of the taxpayer may be deducted in
 
 6 equal installments over a period of five years, the first such
 
 7 year to be the calendar year or fiscal year of the taxpayer in
 
 8 which such loss occurred.
 
 9      (g)  In computing taxable income there shall be allowed as a
 
10 deduction:
 
11      (1)  Political contributions by any taxpayer not in excess
 
12           of $250 in any year; provided that such contributions
 
13           are made to a central or county committee of a
 
14           political party whose candidates shall have qualified
 
15           by law to be voted for at the immediately previous
 
16           general election; or
 
17      (2)  Political contributions by any individual taxpayer in
 
18           an aggregate amount not to exceed $1,000 in any year;
 
19           provided that such contributions are made to candidates
 
20           as defined in section 11-191, who have agreed to abide
 
21           by the campaign expenditure limits as set forth in
 
22           section 11-209; and provided further that not more than
 

 
 
 
Page 20                                                    2106
                                     H.B. NO.           
                                                        
                                                        

 
 1           $250 of an individual's total contribution to any
 
 2           single candidate shall be deductible for purposes of
 
 3           this section.
 
 4      (h)  In computing taxable income there shall be allowed as a
 
 5 deduction, school supplies purchased by school teachers for their
 
 6 students and classrooms.  The deduction may be taken by nonpublic
 
 7 school teachers; provided that the deductions comply with
 
 8 applicable state and federal laws with respect to support or
 
 9 benefits to nonpublic educational institutions.  The department
 
10 of taxation may adopt rules pursuant to chapter 91 to effectuate
 
11 this subsection including certification requirements for claimed
 
12 deductions."
 
13      SECTION 3.  Statutory material to be repealed is bracketed.
 
14 New statutory material is underscored.
 
15      SECTION 4.  This Act shall take effect upon its approval and
 
16 shall apply to taxable years beginning after December 31, 1999.
 
17 
 
18                           INTRODUCED BY:  _______________________