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 it was effective on January 1, 2025, but the bill would amend this to reflect the code as of January 1, 2026, and include provisions effective during 2025. Additionally, the bill introduces new provisions for taxable years beginning after December 31, 2024, allowing taxpayers to subtract certain amounts from their Arizona gross income, including qualified tips, overtime compensation, and retirement account distributions, while also establishing specific limits based on filing status.

Furthermore, the bill would create a new chapter on scholarship granting organizations, allowing for participation in a federal tax credit program for contributions to such organizations, effective from December 31, 2026. It mandates the department to certify organizations and submit annual lists to the U.S. Secretary of the Treasury. The act is designed to apply retroactively to taxable years starting after December 31, 2024, thereby impacting tax calculations and deductions for those years.

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