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Scott Lindholm 3-29-2007

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--$2.5 million 2007--$5 million

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Scott Lindholm 3-29-2007

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  1. The Iowa Lutheran School Tuition Organization Scott Lindholm 3-29-2007

  2. 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--$2.5 million • 2007--$5 million • The law to date does not go past 2007 Iowa Lutheran School Tuition Organization

  3. 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 Organization

  4. 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 Organization

  5. 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 Organization

  6. 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 Organization

  7. 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 Organization

  8. 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 Organization

  9. 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 Organization

  10. 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 Organization

  11. 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 Organization

  12. 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 Organization

  13. 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 Organization

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