HCR2012 - 571R

Be it resolved by the House of Representatives of the State of Arizona, the Senate concurring:

1. Under the power of the referendum, as vested in the Legislature, the following measure, relating to income tax, is enacted to become valid as a law if approved by the voters and on proclamation of the Governor:

An Act

amending section 43-1011, Arizona Revised Statutes, as amended by Laws 2021, chapter 412, section 15; amending sections 43-1311 and 43-1711, Arizona Revised Statutes; relating to income tax.

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 43-1011, Arizona Revised Statutes, as amended by Laws 2021, chapter 412, section 15, is amended to read:

START_STATUTE43-1011. Taxes and tax rates

A. There shall be levied, collected and paid for each taxable year on the entire taxable income of every resident of this state and on the entire taxable income of every nonresident that is derived from sources within this state taxes determined in the following manner:

1. For taxable years beginning from and after December 31, 1996 through December 31, 1997:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 — $10,000 2.90% of taxable income

$10,001 — $25,000 $290, plus 3.30% of the excess over $10,000

$25,001 — $50,000 $785, plus 3.90% of the excess over $25,000

$50,001 — $150,000 $1,760, plus 4.80% of the excess over $50,000

$150,001 and over $6,560, plus 5.17% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 — $20,000 2.90% of taxable income

$20,001 — $50,000 $580, plus 3.30% of the excess over $20,000

$50,001 — $100,000 $1,570, plus 3.90% of the excess over $50,000

$100,001 — $300,000 $3,520, plus 4.80% of the excess over $100,000

$300,001 and over $13,120, plus 5.17% of the excess over $300,000

2. For taxable years beginning from and after December 31, 1997 through December 31, 1998:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 — $10,000 2.88% of taxable income

$10,001 — $25,000 $288, plus 3.24% of the excess over $10,000

$25,001 — $50,000 $774, plus 3.82% of the excess over $25,000

$50,001 — $150,000 $1,729, plus 4.74% of the excess over $50,000

$150,001 and over $6,469, plus 5.10% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 — $20,000 2.88% of taxable income

$20,001 — $50,000 $576, plus 3.24% of the excess over $20,000

$50,001 — $100,000 $1,548, plus 3.82% of the excess over $50,000

$100,001 — $300,000 $3,458, plus 4.74% of the excess over $100,000

$300,001 and over $12,938, plus 5.10% of the excess over $300,000

3. For taxable years beginning from and after December 31, 1998 through December 31, 2005:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 — $10,000 2.87% of taxable income

$10,001 — $25,000 $287, plus 3.20% of the excess over $10,000

$25,001 — $50,000 $767, plus 3.74% of the excess over $25,000

$50,001 — $150,000 $1,702, plus 4.72% of the excess over $50,000

$150,001 and over $6,422, plus 5.04% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 — $20,000 2.87% of taxable income

$20,001 — $50,000 $574, plus 3.20% of the excess over $20,000

$50,001 — $100,000 $1,534, plus 3.74% of the excess over $50,000

$100,001 — $300,000 $3,404, plus 4.72% of the excess over $100,000

$300,001 and over $12,844, plus 5.04% of the excess over $300,000

4. For taxable years beginning from and after December 31, 2005 through December 31, 2006:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 — $10,000 2.73% of taxable income

$10,001 — $25,000 $273, plus 3.04% of the excess over $10,000

$25,001 — $50,000 $729, plus 3.55% of the excess over $25,000

$50,001 — $150,000 $1,617, plus 4.48% of the excess over $50,000

$150,001 and over $6,097, plus 4.79% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 — $20,000 2.73% of taxable income

$20,001 — $50,000 $546, plus 3.04% of the excess over $20,000

$50,001 — $100,000 $1,458, plus 3.55% of the excess over $50,000

$100,001 — $300,000 $3,233, plus 4.48% of the excess over $100,000

$300,001 and over $12,193, plus 4.79% of the excess over $300,000

5. Subject to subsections B and C of this section, for taxable years beginning from and after December 31, 2006 through December 31, 2018:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 — $10,000 2.59% of taxable income

$10,001 — $25,000 $259, plus 2.88% of the excess over $10,000

$25,001 — $50,000 $691, plus 3.36% of the excess over $25,000

$50,001 — $150,000 $1,531, plus 4.24% of the excess over $50,000

$150,001 and over $5,771, plus 4.54% of the excess over $150,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 — $20,000 2.59% of taxable income

$20,001 — $50,000 $518, plus 2.88% of the excess over $20,000

$50,001 — $100,000 $1,382, plus 3.36% of the excess over $50,000

$100,001 — $300,000 $3,062, plus 4.24% of the excess over $100,000

$300,001 and over $11,542, plus 4.54% of the excess over $300,000

6. Subject to subsections D and E of this section, for taxable years beginning from and after December 31, 2018 through December 31, 2021:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 — $26,500 2.59% of taxable income

$26,501 — $53,000 $686, plus 3.34% of the amount over $26,500

$53,001 — $159,000 $1,571, plus 4.17% of the

amount over $53,000

$159,001 and over $5,991, plus 4.50% of the amount over $159,000

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 — $53,000 2.59% of taxable income

$53,001 — $106,000 $1,373, plus 3.34% of the amount over $53,000

$106,001 — $318,000 $3,143, plus 4.17% of the amount over $106,000

$318,001 and over $11,983, plus 4.50% of the amount over $318,000

7. Subject to subsections subsection E and F of this section, for taxable years beginning from and after December 31, 2021 through December 31 of the year in which notice is provided to the department pursuant to section 43-243, subsection A or subsection B, paragraph 1:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 — $27,272 2.55% of taxable income

$27,273 and over $695, plus 2.98% of the amount over $27,272

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 — $54,544 2.55% of taxable income

$54,545 and over $1,391, plus 2.98% of the amount over $54,544

8. Subject to subsections subsection E and F of this section, for taxable years beginning from and after December 31 of the year in which notice is provided to the department pursuant to section 43-243, subsection A or subsection B, paragraph 1 through December 31 of the year in which notice is provided to the department pursuant to section 43-243, subsection B, paragraph 2:

(a) In the case of a single person or a married person filing separately:

If taxable income is: The tax is:

$0 — $27,272 2.53% of taxable income

$27,273 and over $690, plus 2.75% of the amount over $27,272

(b) In the case of a married couple filing a joint return or a single person who is a head of a household:

If taxable income is: The tax is:

$0 — $54,544 2.53% of taxable income

$54,545 and over $1,380, plus 2.75% of the amount over $54,544

9. Subject to subsection F of this section, For taxable years beginning from and after December 31, of the year in which notice is provided to the department pursuant to section 43-243, subsection B, paragraph 2, 2022 through December 31, 2026, the tax is 2.5% of taxable income.

10. For taxable years beginning from and after December 31, 2026, the tax is 2% of taxable income.

B. For the taxable year beginning from and after December 31, 2014 through December 31, 2015, the department shall adjust the income dollar amounts for each rate bracket prescribed by subsection A, paragraph 5 of this section according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics. The revised dollar amounts shall 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.

C. For each taxable year beginning from and after December 31, 2015 through December 31, 2018, the department shall adjust the income dollar amounts for each rate bracket prescribed by subsection A, paragraph 5 of this section according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics. The revised dollar amounts shall 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.

D. For each taxable year beginning from and after December 31, 2019 through December 31, 2021, the department shall adjust the income dollar amount for each rate bracket prescribed by subsection A, paragraph 6 of this section according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics. The revised dollar amounts shall 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.

E. For each taxable year beginning from and after December 31, 2021 through December 31, 2022, the department shall adjust the income dollar amount for each rate bracket prescribed by subsection A, paragraphs 7 and 8 of this section, as applicable, according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics. The revised dollar amounts shall 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. END_STATUTE

Sec. 2. Section 43-1311, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1311. Tax imposed on estates and trusts; rates; annual adjustment

A. Except for trusts that are taxable as partnerships or corporations under the internal revenue code, the income of estates or of any kind of property held in trust is subject only to the income tax imposed by subsection B of this section.

B. There shall be levied, collected and paid for each taxable year on the entire taxable income of every resident trust of this state and on the entire taxable income of nonresident trust that is derived from sources within this state taxes determined in the following manner:

1. For taxable years beginning from and after December 31, 2020 through December 31, 2021:

If taxable income is: The tax is:

$0 — $27,272 2.59% of taxable income

$27,273 — $54,544 $686, plus 3.34% of the amount over $27,272

$54,545 — $163,632 $1,571, plus 4.17% of the

amount over $54,544

$163,633 and over $5,991, plus 4.50% of the amount over $163,632

2. Subject to subsection C of this section, for taxable years beginning from and after December 31, 2021 through December 31 of the year in which notice is provided to the department pursuant to section 43-244, subsection A or subsection B, paragraph 1:

If taxable income is: The tax is:

$0 — $27,272 2.55% of taxable income

$27,273 and over $695, plus 2.98% of the amount over $27,272

3. Subject to subsection C of this section, for taxable years beginning from and after December 31 of the year in which notice is provided to the department pursuant to section 43-244, subsection A or subsection B, paragraph 1 through December 31 of the year in which notice is provided to the department pursuant to section 43-244, subsection B, paragraph 2:

If taxable income is: The tax is:

$0 — $27,272 2.53% of taxable income

$27,273 and over $690, plus 2.75% of the amount over $27,272

4. For taxable years beginning from and after December 31, of the year in which notice is provided to the department pursuant to section 43-244, subsection B, paragraph 2, 2022 through December 31, 2026, the tax is 2.5% of taxable income.

5. For taxable years beginning from and after December 31, 2026, the tax is 2% of taxable income.

C. For each taxable year beginning from and after December 31, 2021 through December 31, 2022, the department shall adjust the income dollar amount for each rate bracket prescribed by subsection B, paragraphs 2 and 3 of this section, as applicable, according to the average annual change in the metropolitan Phoenix consumer price index published by the United States department of labor, bureau of labor statistics. The revised dollar amounts shall 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. END_STATUTE

Sec. 3. Section 43-1711, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1711. Taxes and tax rate

If an Arizona small business taxpayer makes the election pursuant to section 43-302, there shall be levied, collected and paid for each taxable year on the Arizona small business taxable income taxes as determined in the following manner:

1. For taxable years beginning from and after December 31, 2020 through December 31, 2021, an amount equal to 3.5% of the Arizona small business taxable income.

2. For taxable years beginning from and after December 31, 2021 through December 31, 2022, an amount equal to 3.0% of the Arizona small business taxable income.

3. For taxable years beginning from and after December 31, 2022 through december 31, 2026, an amount equal to 2.5% of the Arizona small business taxable income.

4. For taxable years beginning from and after December 31, 2026, an amount equal to 2% of the Arizona small business taxable income. END_STATUTE

2. The Secretary of State shall submit this proposition to the voters at the next general election as provided by article IV, part 1, section 1, Constitution of Arizona.