Enacted 1997 • Launched 1997–98
Arizona provides a credit on individual income taxes for donations to School Tuition Organizations (STOs), privately run non-profit organizations that distribute private school scholarships. Individual taxpayers contributing to STOs may claim a dollar-for-dollar credit of up to $500, and married couples filing jointly may claim up to $1,000. Also, individuals may claim up to $200 ($400 for married couples) for contributing to a public school for extracurricular activities or character education programs. Any non-profit that wants to operate as an STO may do so; there were 53 STOs in 2010–11.
Latest Stats (2010)
- Students Participating: 26,453
- Schools Participating: 367
- Average Scholarship Value: $1,791
Program Details
Program Type
Tax-Credit Scholarship
Scholarship/Voucher Value
STOs provide varying amounts of student aid. In 2010, the average scholarship was worth $1,791. By statute, the scholarships are limited in value to $4,700 for K–8 and $6,000 for grades 9–12. Those amounts increase annually by $100.
Participation
In 2010, 26,453 scholarships students attended 367 private schools.
Student Eligibility
Each STO may set its own eligibility guidelines. Most STOs give to students based solely on financial need, sometimes concentrating on a specific location or school system. An individual taxpayer may not make a contribution to an STO earmarked for his or her own child.
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
Additional Links
Arizona Department of Revenue's 2009 Report
