The Alliance of Arizona Nonprofits is praising Gov. Doug Ducey and legislators for including legislation that encourages charitable giving in the recently enacted budget.
“Even before the impact of the coronavirus pandemic created staggering financial challenges for nonprofit organizations across the state, the nonprofit sector was facing an estimated $323 million annual loss due to tax law changes at the federal and state levels,” said Alliance of Arizona Nonprofits Chief Executive Officer Kristen Merrifield. “In 2019, the Arizona legislature and Gov. Ducey helped mitigate this impact by allowing an ‘above-the-line’ charitable deduction regardless of income level or whether the taxpayer took the standard deduction.”
Under that legislation, taxpayers could deduct up to 25 percent of charitable donations at the state level.
“This year’s budget continues to incentivize giving that helps our charitable sector by increasing the amount of the charitable deduction by the annual rate of inflation. That benefits both taxpayers, who can claim a higher deduction for increased donations, and nonprofits receiving the donations,” Merrifield added. “We are extremely grateful on behalf of Arizona’s nonprofit sector for that action.”
The charitable tax deduction increase was initially introduced as HB2113, sponsored by Rep. Shawnna Bolick (R-Phoenix), before being added to the final budget Ducey signed last week.
“Arizona philanthropy applauds lawmakers and Gov. Ducey for recognizing the vital role of Arizona nonprofits in helping communities recover from the pandemic,” said Laurie Liles, president and chief executive officer of Arizona Grantmakers Forum. “Incentivizing all Arizonans to give to the charities of their choice is a smart policy move and a win-win for taxpayers and the nonprofits they support.”
Arizona’s nonprofits comprise the state’s fifth-largest non-government employers and generate more direct jobs, wages and salaries than the construction industry. In 2016, nonprofits directly and indirectly generated nearly $2.3 billion, or 9.1%, in state and local tax revenue.