Bill
Number: S.B. 1738
Gowan Floor Amendment
Reference
to: printed bill
Amendment
drafted by: Leg Council
FLOOR
AMENDMENT EXPLANATION
1. Reduces, from
$944,774,800 to $925,447,500, the distribution to the State Highway Fund from the
state General Fund portion of transaction privilege tax (TPT).
2. Replaces the
requirement for the Director of the Joint Legislative Budget Committee (JLBC)
and the Director of the Governor's Office of Strategic Planning and Budgeting
(OSPB) to add the total FY 2023 distributions to outlined funds to the actual
amount of FY 2023 state General Fund (state GF) revenue reported with a
requirement for the Directors of JLBC and OSPB to determine the total amount of
TPT revenues not designated as the distribution base that are directly
distributed to the outlined funds and add the amount to the actual amount of FY
2023 state GF revenue reported.
3. Stipulates that the
state GF threshold is met if the determined amount for FY 2023 is equal to or
exceeds $12,976,300,000 and requires the Directors of JLBC and OSPB to notify
the Arizona Department of Revenue as prescribed.
4. Removes provisions
relating to credits for individual and corporate contributions to school
tuition organizations.
5. Aligns the elective
entity-level income tax rate levied on partners and shareholders of an S
corporation with the income tax rate prescribed for individual income tax.
6. Makes technical and
conforming changes.
Page 95, strike lines 20 through 43
Strike pages 96 through 108
Page 109,
strike lines 1 through 38, insert:
"Sec. 15. Section
43-1014, Arizona Revised Statutes, is amended to read:
START_STATUTE43-1014. Entity-level
tax election; partnerships; S corporations; rules
A. For
taxable years beginning from and after December 31, 2021, the partners or
shareholders of a business that is treated as a partnership or S corporation
for federal income tax purposes may consent to be taxed at the entity level at
a tax rate of four and one-half
percent of that is the same as the tax rate prescribed by
section 43-1011 applicable to the entire portion of its taxable
income that is attributable to its resident partners or shareholders and the
portion of its taxable income derived from sources within this state that is
attributable to its nonresident partners or shareholders for that taxable
year. The election under this subsection must be made on or before the due
date or extended due date of the business's return under this title.
B. If
the election is made under subsection A of this section, all of the following
apply:
1. The
taxable income of the partnership or S corporation shall be computed under this
chapter or chapter 14 of this title, as applicable.
2. If
the partnership or S corporation does not pay the amount owed to the department
as a result of the election under this section, the department may collect the
amount from the partners or shareholders based on the proportionate share of
income that is attributable to each partner or shareholder for Arizona tax
purposes.
3. The
partnership or S corporation shall pay estimated tax pursuant to section 43-581
as necessary.
C. The
election under subsection A of this section does not apply to the following:
1. Partners
or shareholders that are not individuals, estates or trusts. The portion
of the taxable income attributable to a partner or shareholder that is not an
individual, estate or trust is not included in the entity-level tax under
subsection A of this section.
2. Partners
or shareholders who are individuals, estates or trusts and who opt out or waive the right to opt out of the election pursuant to
subsection D of this section. The portion of the taxable income attributable to
a partner or shareholder who is an individual, estate or trust and who opts out
or waives the right to opt out of the election pursuant to
subsection D of this section is not included in the entity-level tax
under subsection A of this section.
D. A
partnership or S corporation that intends to make the election under subsection
A of this section shall notify all partners or shareholders who are
individuals, estates or trusts of the intent to make the election and that each
partner or shareholder who is an individual, estate or trust has the right to
opt out of the election. The notice shall allow each partner or shareholder who
is an individual, estate or trust at least sixty days after receiving the
notice to notify the partnership or S corporation that the partner or
shareholder who is an individual, estate or trust is exercising the partner's
or shareholder's right to opt out of the election. If the partner or
shareholder who is an individual, estate or trust does not respond within the
sixty-day period or waives the right to opt out, the partner or
shareholder will be included in the election.
E. The
department shall adopt rules and prescribe forms and procedures as necessary to
administer this section." END_STATUTE
Renumber to
conform
Page 113,
line 20, strike "$944,774,800" insert "$925,447,500"
Page 113, strike lines 32 through 43, insert:
"Sec. 21. Fiscal year 2022-2023 state general fund determination
A. For
the purposes of determining whether the threshold in section 43-243,
subsection B, paragraph 2, Arizona Revised Statutes, and section 43-244,
subsection B, paragraph 2, Arizona Revised Statutes, is met for fiscal year
2022-2023, the director of the joint legislative budget committee and the
director of the governor's office of strategic planning and budgeting shall:
1. Determine
the total amount of revenues from the portion of the revenues derived from the
tax levied by title 42, chapter 5, articles 1 and 5, Arizona Revised Statutes,
that are not designated as the distribution base and that are directly
distributed to the following funds in fiscal year 2022-2023:
(a) The
border security fund established by section 26-105, Arizona Revised
Statutes.
(b) The
state highway fund established by section 28-6991, Arizona Revised
Statutes.
(c) The
state aviation fund established by section 28-8202, Arizona Revised
Statutes.
(d) The
budget stabilization fund established by section 35-144, Arizona Revised
Statutes.
(e) The
state parks revenue fund established by section 41-511.21, Arizona
Revised Statutes.
(f) The
water supply development revolving fund established by section 49-1271,
Arizona Revised Statutes.
(g) The
long-term water augmentation fund established by section 49-1302,
Arizona Revised Statutes.
2. Add
the dollar amount determined pursuant to paragraph 1 of this subsection to the
actual amount of fiscal year 2022-2023 state general fund revenue
reported, excluding the beginning balance.
B. If
the dollar amount determined pursuant to subsection A of this section for
fiscal year 2022-2023 is equal to or exceeds the dollar amount prescribed
by section 43-243, subsection B, paragraph 2, Arizona Revised Statutes,
and section 43-244, subsection B, paragraph 2, Arizona Revised Statutes,
the threshold is met and the director of the joint legislative budget committee
and the director of the governor's office of strategic planning and budgeting
shall notify the department of revenue as prescribed by section 43-243,
Arizona Revised Statutes, and section 43-244, Arizona Revised
Statutes."
Page 114,
line 2, strike "37" insert "24"
Strike lines
8 through 24
Renumber to
conform
Strike lines
28 through 33
Renumber to
conform
Amend title to conform