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 tax 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 rates and the establishment of new rates for future taxable years. For instance, it would specify that for taxable years beginning after December 31, 2025, the tax rate would be 2.47% of taxable income, replacing the previous rate of 2.5%. Overall, these changes aim to reduce the tax burden on individuals and businesses in Arizona while updating the relevant statutory language to reflect these new rates.

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