Income tax checkoffs are commonly instituted in most states to benefit popular causes including wildlife preservation, child abuse prevention and political campaigns.

For fiscal year 2022, only four states have implemented income tax checkoffs for the arts.  California is the only state to receive a substantial amount, $250,000, from this funding mechanism. Other states’ receipts varied from $12,000 to $65,000. Due to low funding returns, a number of additional states have ended prior arts checkoff programs.

States with Current Arts Checkoffs

States with Past Arts Checkoffs

Advantages of Checkoffs

• Checkoffs are very simple means of raising funds for an organization.
• Legislators find checkoffs appealing because they do not require a new tax.
• If competition is low (with few causes listed on the tax form), checkoffs can be an opportunistic source of funding.
• Presence of the arts on the tax form may increase awareness of the state arts agency and its programs.

Disadvantages of Checkoffs

• Checkoffs have sometimes raised insufficient funds for the arts.
• Participation is often discouraged by tax preparers in an effort to keep their clients’ taxes as low as possible.
• Competition with other checkoff options results in less money for each one.
• Checkoffs can lead to administrative problems for state tax agencies in simplifying and processing tax forms.
• Lack of citizen participation in the checkoff program may be misconstrued as lack of citizen support for the arts.

Issues to Consider

• Will the presence of checkoffs change the perceptions of state legislators? In some cases, state elected officials may perceive the ongoing appropriation of general fund dollars as less urgent if a dedicated funding mechanism, such as a checkoff, is available.
• How many checkoffs are on the state’s tax form? Studies indicate that the greater number of options given to taxpayers, the less money is generated across the board.
• Is there a budget available to promote the checkoff? Promotion is essential to the success of this funding strategy, but some organizations find that the costs of promotion exceed the dollars generated. States recommend public service announcements targeted to taxpayers, as well as some sort of promotion targeted specifically to tax preparers.

For more information about income tax checkoffs or other dedicated revenue strategies, contact NASAA Research Manager Mohja Rhoads.