Neighborhood Assistance Program (NAP)
Missouri State Income Tax Credits
Good Samaritan Boys Ranch is a not-for-profit Missouri Corporation chartered in 1959 for the purpose of providing intensive long term treatment for troubled boys. The Ranch is licensed by the State to provide residential services for 75 boys between the ages of 12 and 18 years old. The Ranch is recognized, statewide, as an effective residential treatment provider. The Ranch has demonstrated that it can achieve positive results with severely troubled children through its innovative treatment programs.
To meet this challenge, the Ranch with the assistance of $350,000 in 70% State NAP credits, has undertaken a capital campaign to raise approximately $1,200,000 over the next two years. The Department of Economic Development awarded the Ranch these credits in July or 2004, based upon the Ranch's stated needs and its exemplarily record of reliability and stability.
The following information on NAP credits is designed to enlighten prospective donors of the positive economic benefits available to them through Missouri's NAP tax credit program.
THE PROGRAM
In 1978, Missouri became the third state in the nation to adopt legislation creating a Neighborhood Assistance Program (NAP). Since its inception, more than 11,000 donors have given over $210 million to NAP projects, and in return, the State has given over $110 million in tax credits to those donors.
The philosophy behind the program is quite simple. Rather than funding a project by giving a grant, the State "partially reimburses" eligible donors who fund the project themselves. In effect, this enables donors to finance local projects with money they would otherwise owe on their Missouri taxes.
HOW THE PROGRAM WORKS
Unlike a direct government grant, this form of state assistance involves no transfer of dollars. Instead, Good Samaritan Boys Ranch assumes full responsibility for securing the desired financial support through their own fund-raising efforts, using the tax credits as an incentive. The State's role is to approve the Ranch's projects and process tax credits for eligible donors. The credits equal 70% of the value of most contributions and are issued in the form of "coupons" that donors may then redeem when they file their Missouri tax return.
WHO QUALIFIES FOR CREDITS
- Corporations
- Insurance Companies
- Express Companies
- Banks and other financial institutions
- Partnerships (and their individual partners)
- S-corporations (and their individual shareholders)
- Limited Liability Companies (and their individual members)
- Individuals who either:
A) operate a sole proprietorship in Missouri
B) operate a farm in Missouri
C) have rental property
D) receive royalty or honorarium income
NAP CREDIT FEATURES
- Credits may be claimed against a variety of
state taxes
A) Financial Institution Tax (special restriction may apply)
B) Corporate Franchise Tax
C) Corporate & Individual Income Taxes - Five-year carry-forward provision. Donor has six tax periods to utilize credits.
- May by combined with federal charitable deduction.
- Rules for valuing NAP donations are more favorable than IRS rules in some instances.
TYPES OF DONATIONS
The Ranch may accept cash, materials, supplies, equipment, real estate, stocks and bonds. The allocation of credits for donations is based on the fair market value of the item(s) at the time they are donated.
THE PROCESS
To qualify for credits, a donor must make an eligible contribution to the Ranch. Prospective donors who have questions about their eligibility or the type of donation they are contemplating may contact the Department of Economic Development (DED) directly prior to making a contribution.
Missouri Department of Economic
Development
Neighborhood Assistance Program
P.O. Box 118
Jefferson City, MO 65102
OR
The Southwest Regional Office in Springfield, MO
For further information about the Ranch and its capital campaign and the availability of Missouri NAP tax credits, contact Julie Conway, Director (417) 350-9694 or via e-mail at jconway@ranchlife.org.