SB1260 is a bill that proposes to align the Arizona small business income tax rate with the individual income tax rate of 2.5 percent, retroactive to taxable years beginning January 1, 2023. This bill accelerates the reduction of the small business income tax rate by two years, from the previously scheduled rate of 2.8 percent for taxable years 2023 and 2024, to the new rate of 2.5 percent starting from taxable years after December 31, 2022.

The bill includes technical and conforming changes and is set to become effective on the general effective date, retroactively applicable to the specified taxable years. The Joint Legislative Budget Committee estimates that the fiscal impact of SB1260 on state General Fund revenues will be minimal for fiscal years 2024 and 2025.

Statutes affected:
Introduced Version: 43-1711
Senate Engrossed Version: 43-1711
Chaptered Version: 43-1711