Gretyl Macalaster crystallized the debate in her Union Leader report on the hearing:

“This program uses the tax system to deliver funding for the program. If there was no business profits tax, this program could not exist. The only way we can run this program is if a business owes the tax and chooses to divert some of the tax to this program,” Alex Luchenitser, associate legal director of Americans United For Separation of Church and State, argued for the plaintiffs.

Richard Head, with the state Attorney General’s Office, argued for the state that because the tax is retained by the business and never paid to the state, it should not be considered public money.

“What we have in the law before you is a private business making a decision it is going to donate money to a scholarship organization. There is no governmental involvement, except we will give you a tax credit for that decision,” Head said.

He did concede upon further questioning from Lewis that if the businesses chose not to make the contribution, the money would go to the state.

Read the whole report here: Judge hears debate over education tax credits