ARIZONA HOUSE OF REPRESENTATIVES

Fifty-sixth Legislature

First Regular Session

Senate: FIN DP 5-2-0-0 | 3rd Read 18-11-1-0

House: WM DP 7-3-0-0

SB 1260: small businesses; income tax; rate

Sponsor: Senator Mesnard, LD 13

Caucus & COW

Overview

Reduces the Arizona small business income tax rate to 2.5% for taxable years (TY) beginning January 1, 2023.

History

For taxable years beginning January 1, 2021, small business taxpayers may annually elect to file an Arizona small business income tax return with the Department of Revenue. (A.R.S. § 43-302) A small business taxpayer is any individual taxpayer who reports on their federal income tax return any income that constitutes Arizona small business gross income. (A.R.S. § 32-104 and A.R.S. § 43-1701) The tax rate for TY 2023 and 2024 is 2.8% and reduces to 2.5% in TY 2025 and each year thereafter. (A.R.S. § 43-1711)

Provisions

1.   ☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteReduces the Arizona small business income tax rate to 2.5% beginning TY 2023. (Sec. 1)

2.   Makes technical and conforming changes. (Sec. 1)

3.   Contains a retroactivity clause. (Sec. 2)

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7.                     SB 1260

8.   Initials VP  Page 0 CaucusCOW

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