This bill proposes several updates to current statutes regarding income tax in Arizona. It mandates that the Joint Legislative Budget Committee (JLBC) determine specific state revenue metrics starting in fiscal year 2025-2026, including the growth limit, excess state tax collections, structural surplus, and Arizona taxpayer return. The definitions for terms such as "Arizona taxpayer return," "excess state tax collections," "growth limit," "inflation," "population growth," and "structural surplus" are also introduced to clarify the calculations involved in these determinations.

Additionally, the bill requires the Arizona Department of Revenue to reduce the individual income tax rate for each taxable year beginning January 1, 2026, by an amount equal to the Arizona taxpayer return as defined by the new statute. This change aims to ensure that the tax rate reflects the structural surplus, thereby potentially lowering the tax burden on residents based on the state's financial performance.

Statutes affected:
Introduced Version: 41-1275, 43-1015, 2025-2026, 2024-2025
Senate Engrossed Version: 41-1275, 43-1015, 2025-2026, 2024-2025