REVISED

ARIZONA STATE SENATE

RESEARCH STAFF

MOLLY GRAVER

LEGISLATIVE RESEARCH ANALYST

FINANCE COMMITTEE

Telephone: (602) 926-3171

 

TO:                  MEMBERS OF THE SENATE

                        FINANCE COMMITTEE

DATE:            February 24, 2021

SUBJECT:      Strike everything amendment to S.B. 1252, relating to corporate income tax; subtraction


 


Purpose

Requires, for taxable years beginning January 1, 2022, a corporation's first $100,000 of Arizona gross income to be subtracted from Arizona gross income when computing a corporation's Arizona taxable income.

Background

The corporate income tax is levied on corporations that engage in business within Arizona. Arizona gross income for a corporation is the same as the corporation's federal taxable income for the taxable year. Current statute authorizes various amounts to be added or subtracted when computing a corporation's Arizona taxable income (A.R.S. §§ 43-1101; 43-1121; and 43-1122).

The Joint Legislative Budget Committee fiscal note estimates that S.B. 1252 would result in a state General Fund revenue loss of $(32.2) million, beginning in FY 2023. The fiscal note states that the estimate is uncertain due to data limitations (JLBC fiscal note).

Provisions

1.   Requires, for taxable years beginning January 1, 2022, a corporation's first $100,000 of Arizona gross income to be subtracted from Arizona gross income when computing a corporation's Arizona taxable income.

2.   Becomes effective on the general effective date.

Revisions

· Updates the fiscal impact statement.