The proposed bill aims to update Arizona tax statutes to align with the U.S. Internal Revenue Code as of January 1, 2026, incorporating changes made by Congress in 2025. Key updates include new individual income tax subtractions for qualified tips, overtime compensation, and senior deductions, as well as an increase in the standard deduction and additional charitable contribution deductions. The bill also repeals certain tax credits, including the refundable portion of the Research and Development Tax Credit, and imposes a moratorium on new computer data center tax relief applications from July 1, 2026, to June 30, 2029. Furthermore, it modifies public infrastructure funding provisions by increasing the aggregate cap on state prime contracting transaction privilege tax revenues and adjusting minimum capital investment thresholds for cities and counties. Additionally, the bill expands property tax exemptions for veterans and their surviving spouses, clarifying income definitions and requiring evidence of disability ratings for eligibility. It also repeals sections 20-224.03, 41-1507, and 41-1525, which currently provide for certain premium tax credits and other provisions. The bill introduces new provisions for processing payment requests related to public infrastructure improvements and modifies definitions and requirements for tax credits associated with manufacturing facilities. Overall, these updates aim to streamline tax regulations, enhance support for veterans, and modernize Arizona's tax system.

Statutes affected:
Introduced Version: 20-224, 20-224.01, 20-224.03, 20-837, 20-1010, 20-1060, 20-1097.07, 41-1507, 41-1525, 42-1001, 42-5032.02, 42-11111, 43-105, 43-222, 43-1021, 43-1022, 43-1041, 43-1042, 43-1073.01, 43-1074, 43-1074.01, 43-1083.03, 43-1121, 43-1122, 43-1161, 43-1164.04, 43-1168, 43-1170, 43-1183, 48-4203, 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, 42-5075, 42-5010, 42-5029, 44-401, 28-6532, 42-11152, 32-1601, 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, 43-1083, 43-1083.02, 43-1162, 43-1164.03, 43-1073, 43-1082, 43-1085, 43-1086, 43-1089, 43-1089.01, 43-1089.02, 43-1089.03, 43-1164, 43-1165, 43-1181, 43-1178, 43-1081.01, 43-1084, 43-1164.05, 43-1184, 43-1333, 99-514, 43-1029, 15-1871, 43-1024, 101-336, 43-1014, 43-1023, 15-1628, 15-1451, 43-1025, 43-1027, 111-5, 111-92, 41-1518, 20-1691, 43-1028, 41-1507.01, 42-1118, 42-1122, 42-1108, 41-1512, 6-101, 43-961, 43-1129, 43-1130, 43-1201, 43-947, 43-1130.01, 43-1124, 43-1123, 43-1127, 2024-2025, 2026-2027
Senate Engrossed Version: 20-224, 20-224.01, 20-224.03, 20-837, 20-1010, 20-1060, 20-1097.07, 41-1507, 41-1525, 42-1001, 42-5032.02, 42-11111, 43-105, 43-222, 43-1021, 43-1022, 43-1041, 43-1042, 43-1073.01, 43-1074, 43-1074.01, 43-1083.03, 43-1121, 43-1122, 43-1161, 43-1164.04, 43-1168, 43-1170, 43-1183, 48-4203, 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, 42-5075, 42-5010, 42-5029, 44-401, 28-6532, 42-11152, 32-1601, 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, 43-1083, 43-1083.02, 43-1162, 43-1164.03, 43-1073, 43-1082, 43-1085, 43-1086, 43-1089, 43-1089.01, 43-1089.02, 43-1089.03, 43-1164, 43-1165, 43-1181, 43-1178, 43-1081.01, 43-1084, 43-1164.05, 43-1184, 43-1333, 99-514, 43-1029, 15-1871, 43-1024, 101-336, 43-1014, 43-1023, 15-1628, 15-1451, 43-1025, 43-1027, 111-5, 111-92, 41-1518, 20-1691, 43-1028, 41-1507.01, 42-1118, 42-1122, 42-1108, 41-1512, 6-101, 43-961, 43-1129, 43-1130, 43-1201, 43-947, 43-1130.01, 43-1124, 43-1123, 43-1127, 2024-2025, 2026-2027