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ARIZONA HOUSE OF REPRESENTATIVESFifty-fourth Legislature Second Regular Session |
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HB 2752: individual income tax; rate adjustment.
Sponsor: Representative Roberts, LD 11
Committee on Ways & Means
Overview
Requires the Joint Legislative Budget Committee (JLBC) to compute the individual income tax rate reduction and the Arizona Department of Revenue (DOR) to reduce the individual income tax by the computed amount in the following year.
History
Individual income taxes are levied for each taxable year on the entire taxable income of each resident of Arizona and on the entire taxable income of each nonresident that is derived from sources within Arizona. The individual income tax rate is structured gradually based on income level and currently ranges from 2.59% to 4.50%.
For each taxable year beginning January 1, 2020, DOR is required to adjust the income dollar amount for each rate bracket according to the average annual change in the metropolitan Phoenix Consumer Price Index published by the U.S. Department of Labor, Bureau of Labor Statistics. The revised dollar amounts must be raised to the nearest whole dollar. The income dollar amounts for each rate bracket may not be revised below the amounts prescribed in the prior taxable year (A.R.S. § 43-1011).
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Single or Married Filing Separately |
Married Filing Jointly or Head of Household |
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Taxable Income |
Tax |
Taxable Income |
Tax |
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$0-$26,500 |
2.59% of taxable income |
$0-$53,000 |
2.59% of taxable income |
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$26,501-$53,000 |
$686, plus 3.34% of the amount over $26,500 |
$53,001-$106,000 |
$1,373, plus 3.34% of the amount over $53,000 |
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$53,001-$159,000 |
$1,571, plus 4.17% of the amount $53,000 |
$106,001-$318,00 |
$3,143, plus 4.17% of the amount over $106,000 |
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$159,001 and over |
$5,991, plus 4.50% of the amount over $159,000 |
$318,001 and over |
$11,983, plus 4.50% of the amount over $318,000 |
Provisions
1. 
Requires JLBC, for each fiscal year
beginning in FY 2021 for the purpose of computing the individual income tax
rate reduction, to:
a) Determine the amount of ongoing state GF revenues collected by the state;
b) Determine the amount by which ongoing state GF revenues exceed the grown limit; and
c) Multiply the amount of ongoing state GF revenues that exceed the grown limit by 50%.
2. Directs JLBC staff to provide an annual estimate of the growth limit and the likelihood of ongoing state GF revenues exceeding the growth limit based on the most recent available data.
3. Requires DOR, for each fiscal year beginning after June 30, 2020, to reduce the individual income tax for the next taxable year by an equal percentage such that the total amount of the rate reduction is equal to 50% of the amount determined by JLBC by which ongoing state GF revenues exceed the growth limit.
4. Specifies that if the amount determined by JLBC by which ongoing state GF revenues exceed the growth limit is equal to or less than zero, the individual income tax rate reduction must be the same as the rates for the immediately preceding taxable year.
5. Defines growth limit, inflation and population growth.
6. Applies to all taxable years beginning January 1, 2021.
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10. HB 2752
11. Initials VP/EB Page 0 Ways & Means
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