The proposed bill would significantly update Arizona tax statutes by aligning them with the U.S. Internal Revenue Code (IRC) as of January 1, 2026, incorporating changes made by Congress in 2025. Key updates include the establishment of new individual income tax subtractions, modifications to existing deductions, and an increase in the Dependent Tax Credit from $100 to $125 per dependent under 17 years old. The bill also repeals certain tax credits, such as those for solar energy devices and pollution control equipment, and eliminates the refundable portion of the Research and Development Tax Credit. Additionally, it repeals the requirement for the State Treasurer to divert state transaction privilege tax (TPT) revenues to the Rio Nuevo Multipurpose Facility District and declares Arizona's election to participate in the federal tax credit for contributions to school granting organizations (SGOs). Moreover, the bill proposes updates to the standard deduction to match the federal basic standard deduction based on the taxpayer's filing status, introduces a mechanism for increasing the standard deduction based on charitable contributions, and modifies carryforward provisions for tax credits. It also repeals sections related to premium tax credits for insurers and corporations, and various existing statutes related to tax credits, including those for basic research payments and certain scholarship granting organizations. Overall, these changes aim to modernize Arizona's tax code, streamline tax deductions and credits, and enhance alignment with federal regulations.

Statutes affected:
Introduced Version: 20-224, 20-224.01, 20-224.03, 20-837, 20-1010, 20-1060, 20-1097.07, 28-2154.01, 41-1520, 41-1525, 42-1001, 42-2003, 42-5009, 42-5029, 42-5031, 42-5061, 42-5071, 42-5159, 42-6009, 43-105, 43-222, 43-301, 43-323, 43-1022, 43-1030, 43-1041, 43-1042, 43-1073.01, 43-1074, 43-1074.01, 43-1083, 43-1083.02, 43-1083.03, 43-1121, 43-1122, 43-1161, 43-1164.03, 43-1164.04, 43-1164.05, 43-1168, 43-1170, 48-4203, 48-4204, 48-4231.01, 48-4231.02, 48-4237, 20-206, 9-951, 35-146, 35-147, 9-952, 9-972, 20-1566, 20-224.04, 20-224.06, 20-224.07, 20-224.05, 20-416, 28-101, 1991-1992, 41-1752, 20-225, 20-167, 28-2154, 42-6051, 42-5063, 42-6012, 43-302, 4-101, 42-2002, 42-1101, 42-12006, 41-1512, 41-1517, 41-1519, 43-1082, 43-1165, 32-1164, 12-821.01, 36-2806, 5-401, 42-1124, 42-3401, 42-6002, 9-499.15, 9-500.39, 11-269.17, 43-221, 42-2001, 42-1122, 46-291, 44-7101, 44-7111, 42-1103.02, 42-1125.01, 43-419, 42-5001, 42-5032.02, 42-5076, 42-1104, 28-4301, 42-6004, 42-5075, 42-5040, 42-5005, 28-9601, 42-1116, 42-5014, 42-5070, 42-5010, 42-5155, 42-5010.01, 42-5164, 42-5205, 42-1118, 42-1254, 42-5030, 42-5030.01, 42-5032, 42-5032.01, 42-5032.03, 49-282, 17-273, 15-2084, 15-1648, 15-1472, 42-5031.01, 15-971, 2001-2002, 2002-2003, 2003-2004, 2004-2005, 2005-2006, 15-154, 15-154.01, 15-241, 43-1072.01, 15-977, 41-2257, 41-2258, 42-5033, 42-5033.01, 42-6010, 9-626, 41-194.01, 15-1402, 15-1403, 15-1409, 42-5156, 23-501, 36-1901, 28-5201, 42-5074, 42-6017, 88-525, 95-627, 99-661, 111-296, 28-5739, 28-8344, 42-5073, 3-311, 46-191, 36-551, 41-3201, 41-1514.02, 1-215, 49-426, 49-480, 41-1516, 44-1771, 45-604, 28-1171, 104-104, 44-1302, 42-5064, 48-4238, 48-4201, 28-1461, 28-1301, 28-2003, 28-2352, 28-2402, 28-2481, 28-5801, 5-839, 28-5810, 48-4234, 9-505, 42-5003, 43-1079.01, 43-1088, 43-1089.04, 43-1167.01, 43-1175, 43-1072.02, 43-1074.02, 43-1075, 43-1076.01, 43-1077, 43-1078, 43-1162, 43-1183, 43-1073, 43-1085, 43-1086, 43-1089, 43-1089.01, 43-1089.02, 43-1089.03, 43-1164, 43-1181, 43-1178, 43-1081.01, 43-1084, 43-1184, 43-1012, 43-1072, 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, 41-1507.01, 41-1507, 42-1108, 6-101, 43-961, 43-1129, 43-1130, 43-1201, 43-947, 43-1130.01, 43-1124, 43-1123, 43-1127, 43-1802, 43-1803, 48-4202, 48-4231, 48-4235, 41-1278, 41-1279.06
Senate Engrossed Version: 20-224, 20-224.01, 20-224.03, 20-837, 20-1010, 20-1060, 20-1097.07, 28-2154.01, 41-1520, 41-1525, 42-1001, 42-2003, 42-5009, 42-5029, 42-5031, 42-5061, 42-5071, 42-5159, 42-6009, 43-105, 43-222, 43-301, 43-323, 43-1022, 43-1030, 43-1041, 43-1042, 43-1073.01, 43-1074, 43-1074.01, 43-1083, 43-1083.02, 43-1083.03, 43-1121, 43-1122, 43-1161, 43-1164.03, 43-1164.04, 43-1164.05, 43-1168, 43-1170, 48-4203, 48-4204, 48-4231.01, 48-4231.02, 48-4237, 20-206, 9-951, 35-146, 35-147, 9-952, 9-972, 20-1566, 20-224.04, 20-224.06, 20-224.07, 20-224.05, 20-416, 28-101, 1991-1992, 41-1752, 20-225, 20-167, 28-2154, 42-6051, 42-5063, 42-6012, 43-302, 4-101, 42-2002, 42-1101, 42-12006, 41-1512, 41-1517, 41-1519, 43-1082, 43-1165, 32-1164, 12-821.01, 36-2806, 5-401, 42-1124, 42-3401, 42-6002, 9-499.15, 9-500.39, 11-269.17, 43-221, 42-2001, 42-1122, 46-291, 44-7101, 44-7111, 42-1103.02, 42-1125.01, 43-419, 42-5001, 42-5032.02, 42-5076, 42-1104, 28-4301, 42-6004, 42-5075, 42-5040, 42-5005, 28-9601, 42-1116, 42-5014, 42-5070, 42-5010, 42-5155, 42-5010.01, 42-5164, 42-5205, 42-1118, 42-1254, 42-5030, 42-5030.01, 42-5032, 42-5032.01, 42-5032.03, 49-282, 17-273, 15-2084, 15-1648, 15-1472, 42-5031.01, 15-971, 2001-2002, 2002-2003, 2003-2004, 2004-2005, 2005-2006, 15-154, 15-154.01, 15-241, 43-1072.01, 15-977, 41-2257, 41-2258, 42-5033, 42-5033.01, 42-6010, 9-626, 41-194.01, 15-1402, 15-1403, 15-1409, 42-5156, 23-501, 36-1901, 28-5201, 42-5074, 42-6017, 88-525, 95-627, 99-661, 111-296, 28-5739, 28-8344, 42-5073, 3-311, 46-191, 36-551, 41-3201, 41-1514.02, 1-215, 49-426, 49-480, 41-1516, 44-1771, 45-604, 28-1171, 104-104, 44-1302, 42-5064, 48-4238, 48-4201, 28-1461, 28-1301, 28-2003, 28-2352, 28-2402, 28-2481, 28-5801, 5-839, 28-5810, 48-4234, 9-505, 42-5003, 43-1079.01, 43-1088, 43-1089.04, 43-1167.01, 43-1175, 43-1072.02, 43-1074.02, 43-1075, 43-1076.01, 43-1077, 43-1078, 43-1162, 43-1183, 43-1073, 43-1085, 43-1086, 43-1089, 43-1089.01, 43-1089.02, 43-1089.03, 43-1164, 43-1181, 43-1178, 43-1081.01, 43-1084, 43-1184, 43-1012, 43-1072, 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, 41-1507.01, 41-1507, 42-1108, 6-101, 43-961, 43-1129, 43-1130, 43-1201, 43-947, 43-1130.01, 43-1124, 43-1123, 43-1127, 43-1802, 43-1803, 48-4202, 48-4231, 48-4235, 41-1278, 41-1279.06