The following is a summary of the corporate tax credit. Please
consult with your company’s tax advisor to determine
if it will benefit from this tax credit opportunity.
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A “C” corporation may receive
a dollar for dollar tax credit for cash contributions
to the Brophy Community Foundation up to the amount of
its Arizona state income tax liability. An “S”
corporation with a tax liability at the corporate level
may also be eligible for the tax credit. |
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There is no contribution cap per corporation. There
is a statewide cap of $10 million for FY 2006-07. Each
year, for the five years of the program, the cap will
increase by 20% until FY 2010-2011, when it will reach
nearly $21 million. |
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The corporation must notify Brophy Community Foundation
of its intent to contribute and the total amount before
making the contribution. Contributions may not be made
directly to the school. |
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Brophy Community Foundation shall request pre-approval
from the Arizona Department of Revenue (ADOR) of the intended
corporate contribution amount via ADOR’s form 05-5529
and express mail. |
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The ADOR has 20 days to pre-approve or deny the request.
If approved, Brophy Community Foundation must immediately
notify the corporation. |
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If ADOR approves the request, the corporation must make
the contribution within 10 days of receiving notice of
the approval. |
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If the corporate contribution is not received by the
Brophy Community Foundation within 10 days, the contribution
is no longer eligible for the state tax credit. |
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Unused credit can be carried forward for five years. |
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The corporation may not designate its contribution for
the benefit of any specific student. |
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Each corporate contributor is encouraged to consult
with it own tax advisor regarding the tax benefits arising
from any contribution. |
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Brophy Community Foundation must use at
least 90% of its corporate contributions for tuition aid
awards. |
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The tuition aid awards cannot exceed $4,200 for students
in grades K-8 or $5,500 for students in grades 9-12. After
2006, the maximum amount of the award is increased by
$100. |
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Brophy Community Foundation is required to report to
the Arizona Department of Revenue (ADOR), by June 30 of
each year, specific information set forth in the law.
|
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Brophy Community Foundation must verify that an independent
review of financial statements was completed by a certified
public accountant. |
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Brophy Community Foundation must allow the ADOR to verify
that tuition aid awards were given to students attending
qualified schools. |
**A school tuition organization is a charitable organization
exempt from federal taxation under section 501(c)(3) of the
internal revenue code that allocates at least 90% of its annual
revenue for tuition aid awards to students attending qualified
schools without limiting availability to students of only
one school.
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A “qualified school” is an Arizona
non-governmental primary or secondary school that doesnot
discriminate on the basis of race, color, handicap, familial
status or national origin. |
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The qualified school must annually administer and make
available to the public the aggregate test scores on a
nationally standardized norm-referenced achievement test.
|
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The teaching staff and any personnel that have unsupervised
contact with students must be fingerprinted. |
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The qualified school must refund to the appropriate
school tuition organization a prorated amount of a student’s
tuition aid award if the student leaves the school before
the end of the school year. |
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The student’s family income may not
exceed 185% of the income limit required to qualify a
child for reduced price lunches under the national school
lunch program. The student does not have to claim this
benefit to receive a tuition aid award. |
| * |
A student may receive tuition aid who either:
1. attended a public school as a full-time student for
the first 100 days of the prior fiscal year and transferred
to a qualified school, or
2. enrolled in a kindergarten program of a qualified school. |
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Once a student receives tuition aid under this law
and continues attending a qualified school, he/she continues
to be eligible to receive tuition aid. |
| * |
Students who receive tuition aid are allowed to attend
any qualified school of their parent’s choice. |
