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).