This bill proposes to amend current Arizona income tax statutes by introducing a new individual income tax subtraction for net capital gains derived from the sale or exchange of a taxpayer's primary residence. Specifically, it would allow taxpayers to subtract the amount of any net capital gain included in their federal adjusted gross income (FAGI) for taxable years beginning January 1, 2027, provided that the property was their primary residence for at least five of the preceding taxable years. The current law, as outlined in section 43-1022, does not include this specific provision for primary residences. The bill's new language would create this subtraction, thereby updating the tax code to reflect this new benefit for homeowners selling their primary residences. The bill aims to provide tax relief to individuals by aligning state tax treatment with federal provisions while also establishing specific residency requirements for eligibility.

Statutes affected:
Introduced Version: 43-1022
Senate Engrossed Version: 43-1022