The proposed bill, if enacted, would amend several sections of the Arizona Revised Statutes to reduce various tax rates effective for taxable years beginning January 1, 2026. Specifically, it would decrease the individual income tax rate, the estates and trusts income tax rate, and the Arizona small business income tax rate from the current 2.5 percent to 2.47 percent. Additionally, the state transaction privilege tax (TPT) rate would be lowered from 5 percent to 4.93 percent. The qualifying tax rate (QTR) for the year 2025 would also be adjusted, setting it at $1.54185 for high school districts and $3.0837 for unified school districts.

The bill would also make technical changes to existing statutes, including the adjustment of tax brackets and the timing of tax rate increases. It would replace outdated figures, such as the QTR for 2024, with updated amounts for 2025, and clarify the effective dates for the new tax rates. Overall, the bill aims to streamline tax regulations while providing tax relief to individuals and businesses in Arizona.

Statutes affected:
Introduced Version: 41-1276, 42-5010, 43-1011, 43-1311, 43-1711, 15-971, 42-17151, 15-447, 42-5008.01, 42-5070, 42-5076, 42-5005, 42-5072, 42-5069, 42-5029, 42-5075, 42-5032.02, 43-243, 43-244
House Engrossed Version: 41-1276, 42-5010, 43-1011, 43-1311, 43-1711, 15-971, 42-17151, 15-447, 42-5008.01, 42-5070, 42-5076, 42-5005, 42-5072, 42-5069, 42-5029, 42-5075, 42-5032.02, 43-243, 43-244