Newly Passed Legislation Enables Arizonans to Deduct Donations and Support Nonprofits

06/04/2019, By Valley of the Sun United Way

The Arizona legislature adjourned last week following a long discussion on the state budget. We are happy to share that the budget they passed includes a Charitable Tax Deduction that we believe will benefit everyone, including taxpayers, community members, and nonprofit organizations. Our Chief Public Policy Officer, Penny Allee Taylor, answered the questions below to provide more information on this change and what it means for you.

What does the Charitable Tax Deduction mean for taxpayers?

It means that taxpayers can still make a tax deductible donation for Arizona taxes even if they don't itemize and choose to take the standard deduction. The Charitable Tax Deduction will allow 25% of a taxpayer's charitable donations to be added to the standard deduction beginning for taxable years from and after December 31, 2018.

How will this change benefit nonprofits and their communities in Arizona?

Under the old policy, the Tax Cuts and Jobs Act of 2017 significantly and negatively affected nonprofits, making it more difficult for tax-exempt organizations to carry out their missions.

When the Charitable Deduction became part of the standard deduction, it made tax filing easier, but it also meant that donors received less benefits from their philanthropy. As a result, we and other nonprofits experienced a decrease in charitable giving. Arizona stood to lose $273 million dollars annually.

Charitable giving is especially important in Arizona, where we face the fifth highest poverty rate in the nation, where 667,000 people experience poverty in Maricopa County, and one in every four Arizona children live in poverty.

Charitable organizations create thriving places that benefit everyone. Philanthropic resources help Americans every day by creating jobs, spurring innovation, supporting vulnerable populations, and empowering people to improve their lives. This change will help us and other nonprofits to be more effective and to serve our communities with more programs and services.

What advocacy efforts led to this change?

Valley of the Sun United Way led the charge to get the Charitable Tax Deduction back so that it could help donors, communities, and all of the other nonprofits in Arizona. We built a coalition with the Alliance of Non-Profits, Arizona Grantmakers Forum and many other nonprofits to get the law passed.

We would like to thank our bill sponsor, Representative Ben Toma, the legislature, the Governor and staff, and all of our supporters who called, emailed, and tagged their representatives on social media to advocate for this change.

What else does Valley of the Sun United Way advocate for?

We fight for all individuals and families in our community to be free from poverty and to have opportunities to thrive and maintain a high quality of life. We rally around local, state, and federal issues that help youth succeed, increase financial stability, end homelessness, and end hunger. Some of our causes include encouraging permanent supportive housing with the Housing First model, securing funding for 2-1-1 Community Information and Referral for social services, and more. See the full list on our Public Policy Agenda.



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