AZ HB2765

Increases the minimum percentage of annual revenues that school tuition organizations (STOs) must allocate to educational scholarships or tuition grants from 90% to 95% for contributions made under sections 20-224.06, 20-224.07, 43-1089, 43-1089.03, 43-1183, and 43-1184.

Applies the 95% allocation requirement to both income tax credits and insurance premium tax credits received by STOs.

Modifies scholarship cap amounts in section 43-1504(C) to increase by $200 annually after 2021, starting from $5,600 for K-8 students and $7,500 for grades 9-12.

Changes language from "permitted" to "allowed" and "e-mail" to "email" in violation notices and updates internal revenue code cross-references from section 1785 to 1793.

Makes conforming amendments to both chapters 15 and 16 of Arizona's tax code governing STOs, applying the same 95% allocation requirement and operational standards to all school tuition organization programs.