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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
ENACTED
FACT SHEET FOR H.B. 2688/S.B. 1222
internal revenue code; conformity.
Purpose
Conforms Arizona tax statutes to the U.S. Internal Revenue Code (U.S. IRC) as of January 1, 2025, to reflect changes adopted by the U.S. Congress during 2024.
Background
The Arizona Legislature periodically updates the statutory definition of the U.S. IRC to include any federal provisions that became effective in the preceding calendar year as a means of paralleling the computation of Arizona income tax and other statutory references throughout the Arizona Revised Statutes to the amended U.S. IRC. Tax conformity with the U.S. IRC is deemed necessary because the calculation of Arizona corporate income tax liability begins with federal taxable income. Similarly, federal adjusted gross income is the starting point for individual income tax assessment.
According to the Arizona Department of Revenue (ADOR), there is no anticipated fiscal impact to the state General Fund associated with S.B. 1222 since no enacted federal acts modified the U.S. IRC in 2024.
Provisions
1. Updates the statutory definition of Internal Revenue Code to include all provisions in effect as of January 1, 2025, with the specific adoption of all retroactive effective dates, excluding any changes to the U.S. IRC enacted after January 1, 2025.
2. Makes technical and conforming changes.
3. Becomes effective on the general effective date.
House Action Senate Action
WM 2/5/25 DP 8-0-0-1 FIN 2/3/25 DP 6-0-1
3rd Read 2/24/25 54-0-6 3rd 2/24/25 30-0-0
(H.B. 2688 was substituted for S.B. 1222 on
3rd Read)
Signed by the Governor 2/28/25
Chapter 1
Prepared by Senate Research
March 3, 2025
MG/ci