Tax Credits for Private Tuition, Arizona House Bill 2074

State of Arizona ——— Senate Engrossed House Bill
House of Representatives
Forty-third Legislature
First Regular Session, 1997
House Bill 2074

An Act

Amending section 43-1021, Arizona revised statutes; Amending Title 43, Chapter 10, Article 5, Arizona Revised Statutes, by adding sections 43-1087 and 43-1088; relating to individual income taxation.

Be it enacted by the legislature of the State of Arizona:

Sec. 1. [Omitted.]

Sec. 2. Title 43, chapter 10, article 5, Arizona Revised Statutes, is amended by adding section 43-1087, to read:
43-1087. Credit for voluntary contributions to school tuition organization; definitions -
For taxable years beginning from and after December 31, 1997, a credit is allowed against taxes imposed by this title for the amount of voluntary cash contributions made by the taxpayer during the taxable year to a school tuition organization but not exceeding five hundred dollars in any taxable year. The five hundred dollar limitation also applies to taxpayers who elect to file a joint return for the taxable year. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the tax credit that would have been allowed for a joint return.
If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant’s income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title forward for not more than five consecutive taxable years’ income tax liability.
The credit allowed by this section is in lieu of any deduction pursuant to section 170 of the Internal Revenue Code and taken for state tax purposes.
The tax credit is not allowed if the taxpayer designates the taxpayer’s donation to the school tuition organization for the direct benefit of any dependent of the taxpayer.
For the purposes of this section:
“Qualified school” means a non-governmental primary or secondary school in this state that does not discriminate on the basis of race, color, sex, handicap, familial status or national origin and that satisfies the requirements prescribed by law for private schools in this state on January 1, 1997.
“School tuition organization” means a charitable organization in this state that is exempt from federal taxation under section 501(c)(3) of the Internal Revenue Code and that allocates at least ninety per cent of its annual revenue for educational scholarships or tuition grants to children to allow them to attend any qualified school of their parents’ choice. In addition, to qualify as a school tuition organization the charitable organization shall provide educational scholarships or tuition grants to students without limiting availability to only students of one school.

Sec. 3. Title 43, chapter 10, article 5, Arizona Revised Statutes, is amended by adding section 43-1088, to read:
43-1-88. Tax credit; public school fees; definition -
For taxable years beginning from and after December 31, 1997, a credit is allowed against the taxes imposed by this title for the amount of any fees paid by a taxpayer during the taxable year to a public school located in this state for the support of extra curricular activities of the of the school, but not exceeding two hundred dollars.
The two hundred dollar limitation also applies to taxpayers who elect to file a joint return for the taxable year. A husband and wife who file separate returns for a taxable year year in which they could have filed a joint return may each claim only one-half of the tax credit that would have been allowed for a joint return.
The credit allowed by this section is in lieu of any deduction pursuant to section 170 of the Internal Revenue Code and taken for state purposes.
If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant’s income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title for not more than five consecutive taxable years’ income tax liability.
For the purposes of this section, “extra curricular activities” means school sponsored activities that require enrolled students to pay a fee in order to participate including fees for:
Band uniforms.
Equipment or uniforms for varsity athletic activities.
Scientific laboratory materials.

Sec. 4. [Omitted.}

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