 |
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
AMENDED
tax corrections act of 2025
Purpose
Corrects errors and obsolete language, addresses blending problems and provides clarifying changes to tax statutes.
Background
The Arizona Department of Revenue (ADOR) and Legislative Council review the tax statutes for errors, obsolete language and blending problems. These recommendations are then compiled into an annual bill.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Specifies, retroactive to October 30, 2023, that interest does not accrue and is not payable on the 2023 Arizona Families Tax Rebate.
2. Adds, to the individuals prohibited from preparing or assisting in the preparation of a tax return, any individual acting as an ADOR agent or contractor or any manager or supervisor of such an individual.
3. Allows the immediate dismissal or removal, rather than discharge, from any duties performed as an ADOR agent or contractor, if the agent or contractor accepts compensation to prepare or assist in the preparation of a tax return.
4. Removes, from the definition of a qualifying health care organization, the requirement to annually file its annual financial audit with ADOR.
5. Allows a part-time or seasonal employee whose services consist solely of labor in connection with the planting, cultivating, harvesting or field packing of seasonal agricultural crops to elect to have income tax withheld.
6. Requires the Arizona State Lottery Commission, a permittee conducting horse or dog racing, a fantasy sports contest operator or an event wagering operator to deduct and withhold from each payment of gambling winnings an amount equal to the highest individual income tax rate of 2.5 percent, rather than 20 percent of the amount prescribed by federal law.
7. Eliminates the authority of a city, town or other taxing jurisdiction to apply a municipal tax to online lodging transactions involving rentals of lodging accommodations for more than 29 consecutive days in the city, town or other taxing jurisdiction.
8. Specifies, retroactive to January 1, 2022, that the election to be taxed at the entity level is made by filing the partnership's or S corporation's business tax return.
9. Adds a partnership that amends its return to reflect an administrative adjustment to the list of partnerships required to file a return for the year where adjustments to income or the gain, loss or deduction on which the federal imputed underpayment was reviewed.
10. Makes technical and conforming changes.
11. Becomes effective on the general effective date.
Amendments Adopted by the House of Representatives
ยท Eliminates the authority of a city, town or other taxing jurisdiction to apply a municipal tax to online lodging transactions involving rentals of lodging accommodations of more than 29 consecutive days.
Senate Action House Action
FIN 2/3/25 DP 6-0-1 WM 3/12/25 DP 7-0-0-2
3rd Read 2/27/25 29-0-1 3rd Read 3/25/25 55-3-2
Prepared by Senate Research
March 26, 2025
MG/AL/ci