The proposed bill aims to update Arizona tax statutes by aligning them with the U.S. Internal Revenue Code (IRC) as of January 1, 2026, introducing new individual income tax subtractions and deductions, modifying existing tax credits, and repealing certain credits. Key changes include the introduction of subtractions for qualified tips and overtime compensation, an increase in the standard deduction, and adjustments to charitable contribution treatment. Additionally, the bill imposes a temporary prohibition on new computer data centers receiving tax relief and modifies public infrastructure funding parameters for manufacturing facilities.

Furthermore, the bill expands property tax exemptions for veterans and their surviving spouses, clarifies income definitions for tax purposes, and establishes a new Unemployment Insurance Operating Fund. It also repeals specific sections related to premium tax credits and adjusts the aggregate limit for tax credits while ensuring that at least eighty percent of grants from the district support projects generating transaction privilege tax revenues. Overall, these updates aim to streamline tax administration, enhance compliance with federal law, and improve the efficiency and fairness of public infrastructure funding and property tax exemptions.

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
House Engrossed Version (06/11/2026): 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
Chaptered 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