AZ SB1370

Allows individual taxpayers to claim a tax credit against state income taxes for fees or cash contributions to public schools for educational activities sponsored and sanctioned by the school.

Credit limits are $200 for single individuals or heads of household, $300 for married couples filing jointly in 2005, and $400 for married couples filing jointly in 2006 and subsequent years.

Unused tax credits may be carried forward for up to five consecutive taxable years if they exceed the taxpayer's current tax liability.

Redefines eligible activities as "educational activities" (broadly including extracurricular activities, college and career readiness programs, equipment, materials, and fees) rather than the narrower previous definition limited to extracurricular activities and character education programs.

School principals determine how undesignated contributions are used; schools must report to the department by February 28 of each year on the number of contributions received, total dollar amounts, and how funds were spent.