Assigned to FIN                                                                                                   FOR CAUCUS & FLOOR ACTION

ARIZONA STATE SENATE

Forty-seventh Legislature, First Regular Session

AMENDED

FACT SHEET FOR S.B. 1010

national guard compensation; tax subtraction

Purpose

            Establishes an income tax subtraction for compensation received by members of the Arizona National Guard.

Background

The Arizona National Guard consists of the Arizona Army National Guard and the Arizona Air National Guard.  The Arizona Army National Guard and the Arizona National Guard are comprised of nearly 4,600 people and 2,600 people, respectively. 

Laws 2005, Chapter 264 created a $1,000 tax credit for employers with full-time employees who are members of the Arizona National Guard placed on active duty.

Laws 2005, Chapter 115 established a check-off on the individual income tax form for contributions to the National Guard Relief Fund (Fund).  Fund monies are required to be used to provide financial assistance to families of Arizona National Guard members when the member is placed on active duty and is serving in a combat zone.  

S.B. 1010 allows an income tax subtraction for compensation, bonuses and allowances received by a taxpayer for service as a member of the Arizona National Guard, not to exceed $5,000.

S.B. 1010 will have a negative fiscal impact to the state General Fund due to decreased individual income tax collections.

Provisions

1. Allows compensation, bonuses and allowances received by a taxpayer for service as a member of the Arizona National Guard, not to exceed $5,000, to be subtracted from gross income.

2. Becomes effective on January 1, 2007.

Amendments Adopted by Committee

· Adds an effective date of January 1, 2007.

Senate Action

FIN                 2/16/06     DPA     7-0-2

Prepared by Senate Research

February 20, 2006

SL/HG/jas