Enacted 1997 • Launched 1997 • Tax-Credit Scholarship
Arizona provides a credit on individual income taxes for donations to School Tuition
Organizations (STOs), nonprofits that provide private school scholarships. Individual
taxpayers contributing to STOs may claim a dollar-for-dollar credit of up to $1,000, and married
couples filing jointly may claim up to $2,000 (half of which must go to scholarships for children
leaving public schools, rather than those already in private schools). Individuals may claim
up to $200 ($400 for married couples) for contributing to a public school for extracurricular
activities or character education programs.
Latest Stats (2010-11)
- Scholarships awarded: 25,312
- Schools participating: 351
- Scholarship organizations: 52
- Average scholarship value: $1,861
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. By law, the scholarships are limited to $4,800
for grades K-8 and $6,100 for grades 9-12. Those amounts increase annually by $100.
Student Eligibility
Each STO may set its own eligibility guidelines. Most STOs give to students based on financial
need, sometimes concentrating on a specific location or school system. Individual taxpayers
may not make STO contributions earmarked for specific children.
Legal Developments
April 4, 2011, the U.S. Supreme Court upheld Arizona’s personal tax-credit scholarships, ruling that taxpayers do not have standing under the Establishment Clause to challenge a tax-credit scholarship program. The Court rejected opponents’ position that personal income is government property, stating, “Respondents’ contrary position assumes that income should be treated as if it were government property even if it has not come into the tax collector’s hands. That premise finds no basis in standing jurisprudence. Private bank accounts cannot be equated with the Arizona State Treasury.” Arizona Christian Sch. Tuition Org. v. Winn, 131 S. Ct. 1436, 179 L. Ed. 2d 523 (2011)
Rules & Regulations
- Income Limit: None
- Geographic Limit: Statewide
- Enrollment Cap: None
- Scholarship Cap: Full Tuition
- Testing Mandates: None
- Credit Value: 100%
- Credit Cap: Yes
- Program Cap: None
Governing Statutes
Title 43-1089 and 43-1089.01 of the Arizona statutes
Friedman Contact
Robbie Rhinesmith | robbie@edchoice.org
Additional Links
Arizona Department of Revenue's 2009 Report
