What is a School Tuition Organization, STO? Does the AZ Department of Revenue certify STOs?
A school tuition organization is one that is tax exempt under Section 501(c)(3) of the Internal Revenue Code and allocates at least 90 percent of its annual revenue to scholarships or grants, and makes its scholarships/grants available to students of more than one qualified school. AZTO has historically allocated over 93% or revenue received. Beginning in 2011, the Arizona Department of Revenue will certify all school tuition organizations that are in compliance with the Private School Tuition Tax Credit Requirements. Prior to 2011, there is no requirement that the department certify a school tuition organization.
