Sponsored by Representative Justin Olson, R-Mesa, the bill, HB 2153, added S Corporations to those allowed to receive a tax credit for donations to STOs. Often it is small businesses and even sole proprietorships that are filed as S Corporations.
Applications for the tax credit opened up on July 1st, the start of the new fiscal year. At the close of business, on Monday July 6th, the Arizona Department of Revenue had processed over 300 applications. They estimate that the amount donated will reach $51.6 Million, the capped level allowed for such tax credits for fiscal year 2016.
“Arizona business owners have truly stepped up, donating more than $50 million to help low-income families send their children to a school of their choice. Reaching the cap in less than a week demonstrates the commitment from our business community to help make sure our students have access to a quality education,” said Republican Majority Leader Steve Montenegro. “Because of the success of this program, many Arizona families will have the same opportunity that wealthier families do.”
The total amount allowed for such tax credits is $51.6 Million in the 2016 fiscal year. The amount goes up by 20 percent each fiscal year. Tax credit donors are not allowed to designate scholarships to particular students. Students apply to the STOs to receive the tuition assistance. Scholarships coming from the corporate tax credit must go to a low-income family, which is defined as income of no more than 185 percent of the eligibility threshold for the federal school lunch program.