Enacted 2006 • Launched 2006 • Tax-Credit Scholarship
Arizona provides a credit on corporate income taxes for donations to School Tuition
Organizations (STOs), nonprofits that provide private school scholarships. Corporate taxpayers
contributing to STOs may claim a tax credit equal to the full amount of their contribution. The
program is limited to a total of $10 million in available tax credits per year, a figure that is
allowed to rise 20 percent annually.
Latest Stats (2010-11)
- Students participating: 4,693
- Schools participating: 190
- Scholarship organizations: 14
- Average scholarship value: $2,077
Program Details
Average scholarship value as a percentage of Arizona’s total per-student spending ($7,968)
Student Funding
STOs provide varying amounts of student aid. Scholarships are capped at $4,800 in grades K-8
and $6,100 in grades 9-12. Those amounts increase annually by $100.
Student Eligibility
Students’ family incomes must be below 185 percent of the income eligible for reduced-price
lunch ($78,889 for a family of four in 2013). Students must be in kindergarten, a public school
enrollee for at least 100 days in the previous year, or a prior scholarship recipient.
Legal Developments
March 12, 2009, the Arizona Court of Appeals upheld Arizona’s corporate tax-credit scholarships and the Arizona Supreme Court refused to hear an appeal. Green v. Garriott, 212 P.3d 96 (Ariz. App. 2009)
Rules & Regulations
- Income Limit: 185% x FRL
- Geographic Limit: Statewide
- Enrollment Cap: None
- Scholarship Cap: None
- Testing Mandates: Yes-National
- Credit Value: 100%
- Credit Cap: None
- Program Cap: Escalator
Governing Statutes
Title 43-1183 of the Arizona statutes
Friedman Contact
Robbie Rhinesmith | robbie@edchoice.org
Additional Links
Arizona Department of Revenue's 2009 Report
