This bill proposes several updates to the Arizona Revised Statutes regarding taxation, particularly in relation to the definition of the "internal revenue code" and the computation of income tax. The current law defines the "internal revenue code" as the version in effect as of January 1, 2026, with specific provisions for taxable years beginning after December 31, 2025. The bill modifies this definition to clarify that for taxable years starting from December 31, 2025, the code will include provisions effective during 2025 and exclude changes enacted after January 1, 2026. Additionally, it introduces new provisions allowing taxpayers to subtract certain amounts from their Arizona gross income, including qualified tips, overtime compensation, and retirement account distributions, specifically for taxable years beginning after December 31, 2024.

Furthermore, the bill establishes a new chapter on scholarship granting organizations, allowing nonprofit organizations to apply for certification to provide scholarships under federal tax credit provisions. It mandates the department to submit a list of certified organizations to the U.S. Secretary of the Treasury and to post this list on its website. The act also retroactively applies to taxable years beginning after December 31, 2024, ensuring that the changes take effect in a timely manner for taxpayers. Overall, the bill aims to modernize tax provisions and enhance the support for educational funding through scholarships.

Statutes affected:
Introduced Version: 42-1001, 43-105, 43-301, 43-323, 43-1022, 43-1030, 43-1041, 43-1042, 43-1073.01, 43-1012, 43-1072, 43-1072.01, 43-1072.02, 43-1073, 43-1021, 43-1023, 43-309, 15-1628, 15-1451, 43-1333, 43-1025, 43-1027, 43-1029, 111-5, 111-92, 41-1518, 20-1691, 101-336, 43-1024, 43-1028