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Tax break for PC gifts proposed

A California congresswoman introduces a bill that would sweeten tax breaks to organizations that donate computers to public schools.

U.S. Rep. Anna Eshoo (D-California) today introduced the Computer Donation Incentive Act, which will sweeten tax breaks to corporations and organizations that donate computers to public schools.

The act's introduction coincides with President Clinton's summit on volunteerism this week. It will extend tax benefits to groups that give to public as well as private schools.

Under current law, donations from manufacturers to public schools qualify for a tax deduction equal only to the cost of making the equipment. But donations to private schools qualify for an added deduction worth the production cost, plus half the profit the manufacturer would have received if the product were sold.

The bill also awards an additional tax cut to companies that donate up to eight hours of teacher training.

Lewis Roth, a spokesman for Eshoo, said federal tax breaks are necessary to further encourage high-tech firms to donate training for teachers.

"Helping schools get hardware, software, wiring--high-tech companies realized this does no good if teachers don't know how to use the equipment," Roth said.

The bill is not necessarily aimed at large high-tech firms such as Sun Microsystems, Hewlett-Packard, Apple Computer, and IBM, which already donate extensively to schools, but to other firms that are replacing systems as they upgrade.

Donations of machines older than three years from businesses, and not manufacturers, are excluded from the proposed deduction. "We want to ensure that, as companies are upgrading equipment, they are not dumping outdated technology and software on the schools," Roth said.

Eshoo's Silicon Valley constituency in Palo Alto is also being hit up for donations at home.

Three bills to enact Gov. Pete Wilson's Digital High School plan also are working their way through the California Legislature.

The plan calls for $500 million from the state to wire campuses to the Net and ensure computer-literate graduates, as well as for a local match of at least $1 million for an average-sized school, which will likely be obtained through private industry.