Arizona HB 2058: STO credit cap; growth trigger

Bill Text

HB2058 - 531R - I Ver 

 REFERENCE TITLE: STO credit cap; growth trigger

 State of Arizona

 House of Representatives

 Fifty-third Legislature

 First Regular Session

 2017

 HB 2058

 Introduced by 

 Representatives 
 Friese: Fernandez

AN 
ACT

Amending section 43-1183, Arizona Revised 
Statutes; relating to corporate income tax credit for contributions to school 
tuition organizations.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 43-1183, Arizona Revised 
Statutes, is amended to read:

START_STATUTE43-1183. Credit 
for contributions to school tuition organization

A. Beginning 
from and after June 30, 2006, a credit is allowed against the 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 that is certified 
pursuant to chapter 15 of this title at the time of donation.

B. The 
amount of the credit is the total amount of the taxpayer's contributions for 
the taxable year under subsection A of this section and is preapproved by the department 
of revenue pursuant to subsection D of this section.

C. The 
department of revenue:

1. Shall 
not allow tax credits under this section and section 20‑224.06 that 
exceed in the aggregate a combined total of ten million dollars in any fiscal 
year. Beginning in fiscal year 2007‑2008 through fiscal year 
2016-2017, the 
aggregate dollar amount of the tax credit cap from the previous fiscal year 
shall be annually increased by twenty percent.� Beginning in fiscal year 
2017-2018, the annual increase, if any, shall be determined as follows:

(a) If the 
transaction privilege tax growth rate and the total nonfarm employment growth 
rate are each less than two percent:

(i) On or 
before February 1, the director of the office of strategic planning and 
budgeting and the director of the joint legislative budget committee shall 
jointly notify the director of the department.

(ii) The 
aggregate dollar amount of the tax credit cap shall not increase from the 
previous year.

(b) If the 
director of the department does not receive notice pursuant to subdivision (a), item (i) of this paragraph, the aggregate 
dollar amount of the tax credit cap from the previous fiscal year shall be 
increased by twenty percent.

2. Shall 
preapprove tax credits under this section and section 20‑224.06 subject 
to subsection D of this section.

3. Shall 
allow the tax credits under this section and section 20‑224.06 on a first 
come, first served basis.

D. For 
the purposes of subsection C, paragraph 2 of this section, before making a contribution 
to a school tuition organization, the taxpayer under this title or title 20 
must notify the school tuition organization of the total amount of 
contributions that the taxpayer intends to make to the school tuition 
organization. Before accepting the contribution, the school tuition 
organization shall request preapproval from the department of revenue for the 
taxpayer's intended contribution amount.� The department of revenue shall 
preapprove or deny the requested amount within twenty days after receiving the 
request from the school tuition organization. If the department of 
revenue preapproves the request, the school tuition organization shall 
immediately notify the taxpayer, and the department of insurance in the case of 
a credit under section 20‑224.06, that the requested amount was 
preapproved by the department of revenue.� In order to receive a tax credit 
under this subsection, the taxpayer shall make the contribution to the school 
tuition organization within twenty days after receiving notice from the school 
tuition organization that the requested amount was preapproved. If 
the school tuition organization does not receive the preapproved contribution 
from the taxpayer within the required twenty days, the school tuition 
organization shall immediately notify the department of revenue, and the 
department of insurance in the case of a credit under section 20‑224.06, 
and the department of revenue shall no longer include this preapproved 
contribution amount when calculating the limit prescribed in subsection C, 
paragraph 1 of this section.

E. 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.

F. Co-owners 
of a business, including corporate partners in a partnership and stockholders 
of an S corporation as defined in section 1361 of the internal revenue code, 
may each claim only the pro rata share of the credit allowed under this section 
based on the ownership interest.� The total of the credits allowed all such 
owners may not exceed the amount that would have been allowed a s