History of Corporate Tax Credit


History of the Corporate Tax Credit
In 2006 and then in 2008, the Arizona State Legislature passed into law the Corporate Income Tax Credit and then the Displaced/Disabled Corporate Income Tax Credit, which allows a corporation to make a contribution to a qualified STO (School Tuition Organization) and receive a dollar for dollar tax credit up to the total amount of the tax liability. There is no maximum amount a corporation can re-direct, but the law was capped at $10 million for the fiscal year 2006-2007 with an increase of 20% each year for the Corporate credit and capped at $5,000,000 for the Displaced/Disabled credit with no inflator.

Through 2017, since the inception of the program (from DOR reports) over $292 million has been donated and nearly 21,000 children have benefited in Fiscal Year 2017 from those donations.

Each STO is required to use no less than 90% of the corporate contributions to students whose family income does not exceed 185% of the income limit to qualify for a free or reduced lunch program. (See chart for income levels).