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The bill would also make technical changes to existing statutes, including the deletion of outdated tax rates and the insertion of new rates. For instance, the current QTR for high school districts would be updated from $1.5930 to $1.54185, and for unified school districts from $3.1860 to $3.0837. Furthermore, the bill clarifies that for taxable years beginning after December 31, 2025, the tax rate for individual income and small business income would be set at 2.47%. Overall, these changes aim to streamline tax rates and provide reductions across various categories.

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