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REFERENCE TITLE: conformity; internal revenue code; exceptions |
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State of Arizona Senate Fifty-fourth Legislature First Regular Session 2019
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SB 1166 |
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Introduced by Senator Mesnard
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AN ACT
Providing for conformity with the internal revenue code for taxable year 2018.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Internal revenue code; definition; taxable year 2018; delayed repeal
A. Notwithstanding sections 42‑1001 and 43‑105, Arizona Revised Statutes, for the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2017 through December 31, 2018, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2018, including those provisions that became effective during 2017 with the specific adoption of all retroactive effective dates, and including those provisions of the bipartisan budget act of 2018 (P.L. 115‑123) and the consolidated appropriations act, 2018 (P.L. 115‑141) that are retroactively effective during taxable years beginning from and after December 31, 2017 through December 31, 2018.
B. This section is repealed from and after December 31, 2019.
Sec. 2. Additions to taxable income for taxable year 2018; individuals; delayed repeal
A. For the taxable year beginning from and after December 31, 2017 through December 31, 2018, in computing Arizona adjusted gross income, in addition to the amounts added to Arizona gross income pursuant to section 43‑1021, Arizona Revised Statutes, for a taxpayer that elects to itemize deductions pursuant to section 43‑1042, Arizona Revised Statutes, the additional amounts shall be added to Arizona gross income:
1. An amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been the full amount allowed pursuant to section 168(k) of the internal revenue code.
2. Any amount deducted pursuant to section 179 of the internal revenue code for the taxable year to the extent not previously added.
B. For the taxable year beginning from and after December 31, 2017 through December 31, 2018, in computing Arizona adjusted gross income, in addition to the amounts added to Arizona gross income pursuant to section 43‑1021, Arizona Revised Statutes, the amount that would have been excluded pursuant to section 68 of the internal revenue code shall be added to Arizona gross income.
C. This section is repealed from and after December 31, 2019.
Sec. 3. Itemized deductions taxable year 2018; delayed repeal
A. For the taxable year beginning from and after December 31, 2017 through December 31, 2018, at the election of the taxpayer, and in lieu of the standard deduction allowed by section 43‑1041, Arizona Revised Statutes, in computing taxable income the taxpayer may take the amount of itemized deductions allowed under section 43‑1042, Arizona Revised Statutes, and in addition the taxpayer may deduct:
1. The amount of state and local taxes paid to the extent that the state and local taxes were not deducted in computing federal taxable income pursuant to section 164(b)(6) of the internal revenue code. A taxpayer may not claim a deduction pursuant to this paragraph and the credit allowed by section 43‑1071, Arizona Revised Statutes, with respect to the same state and local tax amounts.
2. The amount of miscellaneous itemized deductions as defined in 26 Code of Federal Regulations section 1.67‑1T(b) to the extent that the aggregate amount of miscellaneous itemized deductions exceeds two percent of federal adjusted gross income and was not deducted in computing federal taxable income.
3. The amount of home equity indebtedness interest and acquisition indebtedness interest to the extent that the home equity indebtedness interest and acquisition indebtedness interest were not deducted in computing federal taxable income pursuant to section 163(h)(3)(F) of the internal revenue code.
4. The amount of business losses of a pass‑through entity to the extent that the business losses of the pass‑through entity were not deducted in computing federal taxable income pursuant to section 461(l) of the internal revenue code. If a deduction is taken pursuant to this paragraph, the taxpayer may not deduct the amount of businesses losses of the pass‑through entity carried over from the taxable year beginning from and after December 31, 2017 through December 31, 2018 in a subsequent taxable year.
5. An amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been fifty percent of the amount allowed pursuant to section 168(k) of the internal revenue code. A deduction pursuant to this paragraph is in lieu of the subtraction provided by section 43-1022, paragraph 19, subdivision (e), Arizona Revised Statutes.
6. The amount deducted pursuant to section 179 of the internal revenue code for the taxable year not to exceed $500,000 or $500,000 minus the amount by which the cost of section 179 property placed in service during the taxable year exceeds $2,000,000, whichever is less.
B. This section is repealed from and after December 31, 2019.
Sec. 4. Additions to taxable income for taxable year 2018; corporations; delayed repeal
A. For the taxable year beginning from and after December 31, 2017 through December 31, 2018, in computing Arizona adjusted gross income for a corporation, in addition to the amounts added to Arizona gross income pursuant to section 43‑1121, Arizona Revised Statutes, the taxpayer shall add any amount deducted pursuant to section 179 of the internal revenue code for the taxable year to the extent not previously added.
B. This section is repealed from and after December 31, 2019.
Sec. 5. Subtractions to taxable income for taxable year 2018; corporations; delayed repeal
A. For the taxable year beginning from and after December 31, 2017 through December 31, 2018, in computing Arizona taxable income for a corporation, in addition to the amounts subtracted to Arizona gross income pursuant to section 43‑1122, Arizona Revised Statutes, the taxpayer shall subtract from Arizona gross income the amount deducted pursuant to section 179 of the internal revenue code for the taxable year not to exceed $500,000 or $500,000 minus the amount by which the cost of section 179 property placed in service during the taxable year exceeds $2,000,000, whichever is less.
B. This section is repealed from and after December 31, 2019.
Sec. 6. Retroactivity
This act applies retroactively to taxable years beginning from and after December 31, 2017.
Sec. 7. Emergency
This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.