AR HB1745

Establishes the Individual Income Tax Credit Opportunity Scholarship Program allowing taxpayers to claim income tax credits of up to $4,400 for voluntary cash contributions to certified school tuition organizations, with a statewide annual cap of $440,000 in credits awarded on a first-come, first-serve basis.

Requires school tuition organizations to be nonprofit entities exempt from federal taxation under 26 U.S.C. § 501(c)(3), allocate at least 90% of annual revenues to educational scholarships or tuition grants, and maintain a public registry through the Department of Finance and Administration.

Defines "qualified schools" as nongovernmental preschools offering services to students with disabilities and nongovernmental primary or secondary schools located in Arkansas that do not discriminate based on race, color, disability, familial status, or national origin, excluding charter schools.

Prohibits taxpayers from claiming credits if they designate contributions for direct benefit of their own dependents or swap donations with other taxpayers to benefit each other's dependents; scholarship awards cannot be based solely on donor recommendations.

Requires annual financial audits for organizations receiving $1 million or more in donations and financial reviews for those receiving less, with audit costs excluded from scholarship spending calculations; effective for tax years beginning January 1, 2015.