AZ HB2581

Expands tax credits for contributions to school tuition organizations (STOs) by allowing wholesalers, domestic farm wineries, domestic microbreweries, and severers to claim credits against luxury tax and severance tax liabilities in addition to existing income tax credits.

Increases individual income tax credit cap from $500 to $750 per year for single filers and from $1,000 to $1,500 for married couples filing jointly, with automatic annual adjustments based on consumer price index.

Removes the preapproval and cap system for income tax credits under sections 43-1183 and 43-1184, allowing taxpayers to claim the full amount of their contributions without Department of Revenue preapproval or aggregate dollar limits.

Establishes STO credit programs for two purposes: scholarships for low-income students and scholarships for displaced students and students with disabilities, with requirements that organizations allocate at least 90% of contributions to educational scholarships or tuition grants.

Requires STOs to handle excess scholarship amounts by returning funds exceeding base tuition to the organization for reallocation as multiyear awards or scholarships for other students.