The corporate tax credit was established in 2006 with the primary purpose of assisting students of families with low to moderate income switching from a public school to a private school. Corporate contributions can be accepted in accordance with the provisions of A.R.S. 43-1183. The corporate tax credits are available only to corporate taxpayers, corporate partners, exempt organizations subject to corporate income tax on unrelated business taxable income (UBTI), or S corporation individual shareholders.
A partnership may pass the credit through only to its corporate partners, each of which may claim a pro rate share of the credit based on their ownership interest.
An exempt organization may claim the credit only if it results from activities that generate UBTI.
Effective January 1, 2015 an S corporation may claim the credit against income Arizona is taking at the corporate level, or it may make an irrevocable election to pass the credit through to its individual shareholders.
Allowance available July 1, 2018
Notice: A School Tuition Organization cannot award, restrict, or reserve scholarships solely on the basis of a donor's recommendation. A taxpayer may not claim a credit if the taxpayer agrees to swap donations with another taxpayer to benefit either taxpayer's own dependent. A.R.S. 43-a603(c).
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