This bill proposes to amend current tax statutes by adding a provision that prohibits the assessment of late filing penalties for taxpayers whose total income tax liability is zero. Specifically, it introduces a new subsection (Z) to section 42-1125 of the Arizona Revised Statutes, stating that penalties cannot be assessed under the existing late filing rules if the taxpayer's total liability is zero. This change aims to alleviate the financial burden on taxpayers who do not owe any taxes.

Additionally, the bill includes a retroactive application clause, stating that the new provisions will apply to taxable periods beginning after December 31, 2025. The current language regarding penalties for late filing remains unchanged, except for the addition of the new subsection and the removal of an existing subsection (Z) that is no longer relevant. Overall, the bill seeks to simplify tax compliance for individuals with no tax liability while maintaining the existing penalty structure for those who do owe taxes.

Statutes affected:
Introduced Version: 42-1125
House Engrossed Version: 42-1125
Senate Engrossed Version: 42-1125