The proposed bill aims to modernize Arizona's tax statutes by aligning them with the U.S. Internal Revenue Code (IRC) as of January 1, 2026, and includes several significant updates. It would introduce new individual income tax subtractions, modify existing deductions, and increase the Dependent Tax Credit from $100 to $125 per dependent under 17 years old. The bill also seeks to repeal certain tax credits, such as those for solar energy devices and new employment, and eliminate the refundable portion of the Research and Development Tax Credit. Additionally, it would repeal the requirement for the State Treasurer to divert transaction privilege tax revenues to the Rio Nuevo Multipurpose Facility District and declare Arizona's participation in the federal tax credit for contributions to school granting organizations (SGOs). In terms of specific statutory changes, the bill proposes the repeal of sections 20-224.03, 41-1525, 42-5031, and 42-5159 and the amendment of various sections including 20-224, 20-837, 20-1010, 42-1001, 42-2003, 42-5009, 42-5029, 43-105, 43-222, 43-301, 43-323, and 43-1022. It introduces new definitions related to income tax calculations, particularly for taxpayers aged sixty and older, and clarifies tax credits and penalties associated with premium taxes. The bill also adjusts the standard deduction to match the federal basic standard deduction and establishes provisions for scholarship granting organizations, ensuring compliance with federal regulations. Overall, these updates aim to streamline tax reporting and compliance while enhancing tax benefits for individuals.

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
House 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