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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
REVISED
school tax credit; contributions
Purpose
Allows school tax credits for contributions made toward certain items.
Background
Current
statute allows for tax credits against contributions made toward a public
school for: 1) standardized testing for college credit or readiness offered by
a widely-recognized and accepted educational testing organization; 2) the
career and technical education industry certification assessment; 3)
preparation courses and materials for standardized testing;
4) cardiopulmonary resuscitation training; 5) extracurricular activities; and
6) character education programs. A single individual or a head of household may
receive a tax credit of up to $200; a married couple filing a joint return may
receive a tax credit of up to $400. If the credit exceeds the amount of the
taxpayer's income tax, the unused portion of the tax credit can be carried
forward for up to five years.
The site council of a public school (site council) that receives contributions that are not designated for a specific purpose determines how the contributions are used at the school site. If contributions were previously designated for a specific purpose or program, and the purpose or program has been discontinued or not used for two consecutive fiscal years, then the contributions are considered undesignated in the following fiscal year (A.R.S. § 43-1089.01).
An analysis of H.B. 2425 by the Arizona Department of Revenue (ADOR) indicates a negative fiscal impact to the state General Fund for tax year (TY) 2019 through TY 2022, resulting from an increase in the number of donors and in the amount donated in response to the expansion of uses for public school tax credit contributions. ADOR estimates an impact of between $4.2 million and $6.2 million in TY 2019, $4.3 million and $6.4 million in TY 2020, $4.4 million and $6.6 million in TY 2021 and $4.5 million and $6.8 million in TY 2022.
Provisions
1. Allows, beginning July 1, 2019, through June 30, 2022, public school tax credit contributions to be used for:
a) capital items, including:
i. furniture, furnishings, athletic equipment and other equipment, including computer software;
ii. pupil and nonpupil transportation vehicles and equipment, including all capital expenditures within a contract if the school district contracts for pupil transportation;
iii. textbooks and related printed subject matter materials adopted by the governing board of the school district;
iv. instructional aids;
v. library books;
vi. payment of principal and interest on bonds; and
vii. school district administration emergency needs that are directly related to pupils;
b) community school meal programs;
c) student consumable healthcare supplies; and
d) playground equipment and shade structures for playground equipment.
2. Allows the site council to transfer undesignated contributions to any school within the same school district.
3. Defines community school meal program as a school meal program that takes place before or after the regular school day on school property.
4. Defines student consumable healthcare supplies as tissues, hand wipes, bandages and other healthcare consumables that are generally used by children.
5. Makes technical and conforming changes.
6. Becomes effective on the general effective date.
Revisions
· Includes fiscal impact based on ADOR analysis.
House Action
ED 2/12/19 W/D
WM 2/20/19 DP 7-2-1-0
3rd Read 2/26/19 39-20-1
Prepared by Senate Research
March 6, 2019
CS/LC/kja