HB2778 - 561R

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

Section 1. Section 33-1413.01, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1413.01. Utility charges; waste, garbage and rubbish removal charges

A. If A landlord charges separately for gas, water or electricity there shall be provide a separate meter for every user for gas, water and electricity. For each billing period the cost of the charges for the period shall be separately stated, along with the opening and the closing meter readings and the dates of the meter readings. Each bill shall show the computation of the charge generally in accordance with the serving utility company billing format for individual service supplied through a single service meter.

B. If the landlord separately charges for utilities, The landlord shall not charge more than the prevailing basic service single family single-family residential rate charged by the serving utility or provider.

C. For the purpose of regulating mobile home parks as public or consecutive water systems, the state shall not adopt rules pursuant to title 49, chapter 2, article 9, that are more stringent than authorized by the federal government. Submetering solely to determine the charges for individual water use by park tenants for the purpose of water conservation, without other evidence indicating a transaction subject to regulation under title 49, chapter 2, article 9, shall not be used as a basis for treating any mobile home park as a public or consecutive water system.

D. A landlord may charge separately for removal of waste, garbage, rubbish, refuse and trash and for sewer services. Any charges for removal or sewer services may not exceed the prevailing single family single-family residential charge, fee or rate for these services levied by the political subdivision or provider. END_STATUTE

Sec. 2. Title 33, chapter 11, article 1, Arizona Revised Statutes, is amended by adding sections 33-1420 and 33-1420.01, to read:

START_STATUTE33-1420. Mobile home park opportunity to purchase; offers; exemption

A. A mobile home park owner may not make a final unconditional acceptance of any offer for the sale or other transfer of ownership of the mobile home park without first giving ninety days' notice of the following to each tenant:

1. That the mobile home park owner intends to sell the mobile home park.

2. The price, terms and conditions of an acceptable offer that the mobile home park owner has received to sell the mobile home park or the price, terms and conditions for which the mobile home park owner intends to sell the mobile home park. On request, the mobile home park owner shall provide to the tenants a copy of the signed written offer.

3. That the residents have the opportunity to purchase the mobile home park as prescribed by this section.

B. The mobile home park owner shall provide the notice required by subsection A of this section by certified mail, return receipt requested, to each tenant at the tenant's permanent address, to the city or town in which the mobile home park is located or, if none, the county in which the mobile home park is located and to the Arizona department of housing at its main office. The Arizona department of housing, within five days after receiving the notice, shall provide a copy of the notice to any governmental body or nonprofit organization that has registered with the department to receive copies of those notices.

C. A group or association of tenants of the mobile home park or their assignees may submit to the mobile home park owner a proposed purchase and sale agreement within ninety days after the date that the mobile home park owner mails a notice prescribed by subsection A of this section. On submittal of the proposed purchase and sale agreement, the group or association of tenants or their assignees have an additional ninety days from the date of the proposed purchase and sale agreement to obtain a binding commitment for any necessary financing or guarantees. The group or association of tenants or their assignees must submit to the mobile home park owner reasonable evidence that the owners of at least fifty-one percent of the owner-occupied mobile homes in the mobile home park have approved the group or association purchasing the park. During the time periods prescribed by this section, the mobile home park owner may not complete an unconditional sale of the mobile home park to another potential buyer.

D. A mobile home park owner that receives an offer pursuant to this section may not unreasonably refuse to:

1. Provide documents, data and other information in response to reasonable requests for information from a group or association of tenants or their assignees that are participating in the opportunity to purchase the mobile home park and that would enable them to prepare an offer. The documents, data and other information provided to the tenants may be shared for the purposes of evaluating or obtaining financing for the prospective transaction, but all persons who receive the documents, data and other information shall otherwise keep them confidential if the mobile home park owner or the mobile home park owner's agent so requests.

2. Schedule a closing date for a purchase and sale agreement.

E. If, after a proposed purchase and sale agreement is submitted pursuant to subsection C of this section, the additional ninety-day period prescribed by subsection C of this section expires and a group or association of tenants or their assignees have not submitted to the mobile home park owner a binding financial commitment regarding the sale, the group's or association's opportunity to purchase that is provided by this section terminates.

F. A group or association of tenants or their assignees that have the opportunity to purchase may assign their purchase right to a local or state government, tribal government or housing authority, a nonprofit corporation with expertise related to housing or an agency of this state for the purpose of continuing to operate the property as a mobile home park.

G. A group or association of tenants or their assignees may submit an offer to purchase to a mobile home park owner at any time without regard to whether the mobile home park owner has RECEIVED, accepts or offers a sale as prescribed in subsection A of this section. The mobile home park owner shall consider in good faith any offer made pursuant to this section. The requirements of this section apply separately to each substantially different offer to sell or purchase the mobile home park.

H. Notwithstanding any provision of this section, a mobile home park owner is not required to provide notice or the opportunity to purchase to a group or association of tenants or their assignees if the sale, transfer or conveyance of the mobile home park is to any of the following:

1. A spouse, a partner in a civil union or a parent, sibling, aunt, uncle, first cousin or legally recognized child of the mobile home park owner.

2. A trust the beneficiaries of which are the spouse, partner in a civil union or legally recognized children of the mobile home park owner.

3. A business entity or trust that the transferring business entity or trust controls directly or indirectly. For the purposes of this paragraph, "controls" means:

(a) Owns entirely as a subsidiary.

(b) Owns a majority interest.

(d) Is owned by a family member who is included within the line of intestate succession if the mobile home park owner dies intestate.

(e) Is transferred between joint tenants or tenants in common.

4. An entity pursuant to eminent domain.

I. To qualify for an exemption under subsection H of this section, a transaction must not be made in bad faith, must be made for a legitimate business purpose or a legitimate familial purpose consistent with the exemptions prescribed by subsection H of this section and must not be made for the primary purpose of avoiding the opportunity to purchase provisions prescribed by this section.

J. Notwithstanding any provision of the leases or other documents that govern the use and operation of the mobile home park, the duty to comply with this section is deemed an implied covenant of the lease agreement between the tenant and the mobile home park owner.END_STATUTE

START_STATUTE33-1420.01. Capital gains tax exclusion; sale of mobile home park; definition

A. Any capital gains income realized from the sale or exchange of a mobile home park is excluded from Arizona taxable income or gross income under title 43.

B. To qualify for the exclusion under this section, the sale must be made to:

1. A tenants' association or a mobile home park residents' association.

2. A nonprofit organization under section 501(c)(3) of the internal Revenue Code that purchases a mobile home park on behalf of an association of tenants or mobile home park residents.

3. A county housing authority.

4. A municipal housing authority.

C. An individual, corporation or partnership, S corporation or disregarded entity qualifies for the exclusion under this section. If the exclusion allowed under this section is taken by a partnership, S corporation or disregarded entity, the exclusion must be attributed to shareholders, partners or other owners using the same proportion used to report the partnership's, S corporation's or disregarded entity's income or loss for income tax purposes.

D. For the purposes of this section, "tenants' association" or "mobile home park residents' association" means an association of tenants in a mobile home park that has established bylaws for the association.END_STATUTE

Sec. 3. Title 33, chapter 11, article 2, Arizona Revised Statutes, is amended by adding section 33-1439, to read:

START_STATUTE33-1439. Heat mitigation measures

an owner or park manager may not prohibit a tenant from installing on or in the tenant's mobile home reasonably necessary cooling mechanisms or features to reduce energy costs and prevent the occupants' heat-related illness and death. These cooling mechanisms and features include temporary window-mounted ventilation or air conditioning units, wall-mounted mini-split air conditioners, commercial window coverings and other commercial cooling methods and sun barriers.END_STATUTE

Sec. 4. Section 33-1476, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1476. Termination or nonrenewal of rental agreement by landlord; noncompliance with rental agreement by tenant; failure to pay rent

A. The landlord shall specify the reason or reasons for the termination or nonrenewal of any tenancy in the mobile home park. The reason or reasons relied on for the termination or nonrenewal shall be stated in writing with specific facts, so that the date, place and circumstances concerning the reason or reasons for termination or nonrenewal can be determined. Reference to or recital of the language of this chapter, or both, is not sufficient compliance with this subsection.

B. The landlord may not terminate or refuse to renew a tenancy without good cause. For the purposes of this subsection, "good cause" means:

1. Noncompliance with any provision of the rental agreement.

2. Nonpayment of rent. NOTWITHSTANDING any provision in the lease agreement, Failure to pay parking or pet fees does not constitute nonpayment of rent and is not grounds for termination, nonrenewal or eviction.

3. Change in use of land.

4. Clear and convincing evidence that a tenant has repeatedly violated any provision of this chapter and established a pattern of noncompliance with such provisions.

C. The landlord's right to terminate or to refuse to renew a tenancy pursuant to subsection B of this section does not arise until the landlord has complied with subsection D, E or H of this section.

D. Except as otherwise prohibited by law:

1. If there is a material noncompliance by the tenant with the rental agreement, the landlord shall deliver a written notice to the tenant specifying the acts and omissions constituting the breach and that the rental agreement will terminate upon on a date not less than thirty days after receipt of the notice if the breach is not remedied in fourteen days. If the tenant remedies the situation within the time specified in the notice, the landlord shall issue a notice to the tenant releasing the tenant from the termination of rental agreement notice.

2. If there is a noncompliance by the tenant with section 33-1451 materially affecting health and safety, the landlord may deliver a written notice to the tenant specifying the acts and omissions constituting the breach and that the rental agreement will terminate upon on a date not less than twenty days after receipt of the notice if the breach is not remedied in ten days. However, if the breach is remediable by repair or the payment of damages or otherwise, and the tenant adequately remedies the breach before the date specified in the notice, the rental agreement will not terminate. If the tenant remedies the situation within the time specified in the notice, the landlord shall issue a notice to the tenant releasing the tenant from the termination of rental agreement notice.

3. If there is a noncompliance that is both material and irreparable and that occurs on the premises, including an illegal discharge of a weapon, homicide as prescribed in sections 13-1102 through 13-1105, criminal street gang activity as prescribed in section 13-105, activity as prohibited in section 13-2308, prostitution as defined in section 13-3211, the unlawful manufacturing, selling, transferring, possessing, using or storing of a controlled substance as defined in section 13-3451, threatening or intimidating as prohibited in section 13-1202, infliction of serious bodily harm, assault as prohibited in section 13-1203, criminal activity involving serious property damage or acts that have been found to constitute a nuisance pursuant to section 12-991, the landlord may deliver a written notice for immediate termination of the rental agreement and proceed pursuant to section 33-1485.

4. If a tenant engages in repetitive conduct that is the subject of notices under this subsection, after two incidents of the same type documented by the landlord within a twelve month twelve-month period or after receipt by the landlord of two written complaints from other tenants about the repetitive conduct within a twelve month twelve-month period, the landlord may deliver a written notice to the tenant specifying the repetitive conduct and the documentation and advising the tenant that, on documentation of the next incident of the same type, final notice will be given and the rental agreement or tenancy will be terminated thirty days after the date of the notice.

5. If a tenant has been involved in three or more documented incidents of conduct of any type described in this section within a twelve month twelve-month period, the landlord may deliver a written notice to the tenant specifying the conduct and the documentation and advising the tenant that, on documentation of the next incident, final notice will be given and the rental agreement or tenancy will be terminated thirty days after the date of the notice.

E. If rent is unpaid when due and the tenant fails to pay rent within seven days after written notice by the landlord of nonpayment and the landlord's intention to terminate the rental agreement if the rent is not paid within that period of time, the landlord may terminate the rental agreement. Before judgment in an action brought by the landlord under this subsection, the tenant may have the rental agreement reinstated by tendering the past due but unpaid periodic rent, reasonable attorney's attorney fees incurred by the landlord and court costs, if any.

F. Except as provided in this chapter, the landlord may recover actual damages, obtain injunctive relief or recover possession of the premises pursuant to an action in forcible detainer for repeated noncompliance by the tenant with the rental agreement or section 33-1451.

G. The remedy provided in subsection F of this section is in addition to any right of the landlord arising under subsection D of this section.

H. If a change in use is intended for the land on which a mobile home park or a portion of a mobile home park is located and the landlord intends eviction of a mobile home tenant due to a change in use, the landlord shall notify all tenants in the park in writing that:

1. The change in use may subsequently result in the termination of a rental agreement.

2. The tenant being terminated due to the change in use will receive a one hundred eighty day eighty-day notice before the actual termination of the rental agreement. END_STATUTE

Sec. 5. Section 33-1481, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1481. Remedy after termination

A. If the rental agreement is terminated, the landlord may have a claim for possession of the mobile home space and for rent and a separate claim for actual damages for breach of the rental agreement.

B. In the execution of any writ of restitution issued pursuant to section 12-1178 or 12-1181, the landlord may shall provide written instructions to the sheriff or constable not to remove the mobile home from its space, and if those written instructions are provided, the sheriff or constable may fully execute the writ of restitution by removing all occupants and their possessions from the mobile home and from the space it occupies. The landlord shall hold the tenant's personal property for a period of fourteen calendar days after the landlord takes temporary possession of the mobile home. The landlord shall use reasonable care in moving and holding the tenant's personal property.

C. If the owner does not contact the landlord within fourteen days after execution of the writ of restitution in order to obtain a clearance for removal of the mobile home from the mobile home park as prescribed by section 33-1451 or to recover the owner's personal property, or both, the mobile home shall then be deemed abandoned and section 33-1478 applies and the landlord may terminate any utility services that are provided by the landlord. An owner of a mobile home in compliance with the provisions of subsection C D of this section may recover possession of the owner's mobile home while the title remains in the owner's name.

C. D. A mobile home that is subject to a judgment for forcible detainer may not be removed from its space until the provisions of section 33-1451, subsection B have been satisfied. The landlord may agree in writing to accept other terms in satisfaction of the judgment. This provision shall not apply to any lienholder of record on the date of judgment or its successors or assigns. END_STATUTE

Sec. 6. Section 43-1022, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1022. Subtractions from Arizona gross income

In computing Arizona adjusted gross income, the following amounts shall be subtracted from Arizona gross income:

1. The amount of exemptions allowed by section 43-1023.

2. Benefits, annuities and pensions in an amount totaling not more than $2,500 received from one or more of the following:

(a) The United States government service retirement and disability fund, the United States foreign service retirement and disability system and any other retirement system or plan established by federal law, except retired or retainer pay of the uniformed services of the United States that qualifies for a subtraction under paragraph 26 of this section.

(b) The Arizona state retirement system, the corrections officer retirement plan, the public safety personnel retirement system, the elected officials' retirement plan, an optional retirement program established by the Arizona board of regents under section 15-1628, an optional retirement program established by a community college district board under section 15-1451 or a retirement plan established for employees of a county, city or town in this state.

3. A beneficiary's share of the fiduciary adjustment to the extent that the amount determined by section 43-1333 decreases the beneficiary's Arizona gross income.

4. Interest income received on obligations of the United States, minus any interest on indebtedness, or other related expenses, and deducted in arriving at Arizona gross income, that were incurred or continued to purchase or carry such obligations.

5. The excess of a partner's share of income required to be included under section 702(a)(8) of the internal revenue code over the income required to be included under chapter 14, article 2 of this title.

6. The excess of a partner's share of partnership losses determined pursuant to chapter 14, article 2 of this title over the losses allowable under section 702(a)(8) of the internal revenue code.

7. The amount allowed by section 43-1025 for contributions during the taxable year of agricultural crops to charitable organizations.

8. The portion of any wages or salaries paid or incurred by the taxpayer for the taxable year that is equal to the amount of the federal work opportunity credit, the empowerment zone employment credit, the credit for employer paid social security taxes on employee cash tips and the Indian employment credit that the taxpayer received under sections 45A, 45B, 51(a) and 1396 of the internal revenue code.

9. The amount of exploration expenses that is determined pursuant to section 617 of the internal revenue code, that has been deferred in a taxable year ending before January 1, 1990 and for which a subtraction has not previously been made. The subtraction shall be made on a ratable basis as the units of produced ores or minerals discovered or explored as a result of this exploration are sold.

10. The amount included in federal adjusted gross income pursuant to section 86 of the internal revenue code, relating to taxation of social security and railroad retirement benefits.

11. To the extent not already excluded from Arizona gross income under the internal revenue code, compensation received for active service as a member of the reserves, the national guard or the armed forces of the United States, including compensation for service in a combat zone as determined under section 112 of the internal revenue code.

12. The amount of unreimbursed medical and hospital costs, adoption counseling, legal and agency fees and other nonrecurring costs of adoption not to exceed $3,000. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $3,000. The subtraction under this paragraph may be taken for the costs that are described in this paragraph and that are incurred in prior years, but the subtraction may be taken only in the year during which the final adoption order is granted.

13. The amount authorized by section 43-1027 for the taxable year relating to qualified wood stoves, wood fireplaces or gas fired fireplaces.

14. The amount by which a net operating loss carryover or capital loss carryover allowable pursuant to section 43-1029, subsection F exceeds the net operating loss carryover or capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code.

15. Any amount of qualified educational expenses that is distributed from a qualified state tuition program determined pursuant to section 529 of the internal revenue code and that is included in income in computing federal adjusted gross income.

16. Any item of income resulting from an installment sale that has been properly subjected to income tax in another state in a previous taxable year and that is included in Arizona gross income in the current taxable year.

17. For property placed in service:

(a) In taxable years beginning before December 31, 2012, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year computed as if the election described in section 168(k) of the internal revenue code had been made for each applicable class of property in the year the property was placed in service.

(b) In taxable years beginning from and after December 31, 2012 through December 31, 2013, an amount determined in the year the asset was placed in service based on the calculation in subdivision (a) of this paragraph. In the first taxable year beginning from and after December 31, 2013, the taxpayer may elect to subtract the amount necessary to make the depreciation claimed to date for the purposes of this title the same as it would have been if subdivision (c) of this paragraph had applied for the entire time the asset was in service. Subdivision (c) of this paragraph applies for the remainder of the asset's life. If the taxpayer does not make the election under this subdivision, subdivision (a) of this paragraph applies for the remainder of the asset's life.

(c) In taxable years beginning from and after December 31, 2013 through December 31, 2015, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been ten percent of the amount allowed pursuant to section 168(k) of the internal revenue code.

(d) In taxable years beginning from and after December 31, 2015 through December 31, 2016, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been fifty-five percent of the amount allowed pursuant to section 168(k) of the internal revenue code.

(e) In taxable years beginning from and after December 31, 2016, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been the full amount allowed pursuant to section 168(k) of the internal revenue code.

18. With respect to property that is sold or otherwise disposed of during the taxable year by a taxpayer that complied with section 43-1021, paragraph 11 with respect to that property, the amount of depreciation that has been allowed pursuant to section 167(a) of the internal revenue code to the extent that the amount has not already reduced Arizona taxable income in the current or prior taxable years.

19. The amount contributed during the taxable year to college savings plans established pursuant to section 529 of the internal revenue code on behalf of the designated beneficiary to the extent that the contributions were not deducted in computing federal adjusted gross income. The amount subtracted may not exceed:

(a) $2,000 per beneficiary for a single individual or a head of household.

(b) $4,000 per beneficiary for a married couple filing a joint return. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $4,000 per beneficiary.

20. The portion of the net operating loss carryforward that would have been allowed as a deduction in the current year pursuant to section 172 of the internal revenue code if the election described in section 172(b)(1)(H) of the internal revenue code had not been made in the year of the loss that exceeds the actual net operating loss carryforward that was deducted in arriving at federal adjusted gross income. This subtraction only applies to taxpayers who made an election under section 172(b)(1)(H) of the internal revenue code as amended by section 1211 of the American recovery and reinvestment act of 2009 (P.L. 111-5) or as amended by section 13 of the worker, homeownership, and business assistance act of 2009 (P.L. 111-92).

21. For taxable years beginning from and after December 31, 2013, the amount of any net capital gain included in federal adjusted gross income for the taxable year derived from investment in a qualified small business as determined by the Arizona commerce authority pursuant to section 41-1518.

22. An amount of any net long-term capital gain included in federal adjusted gross income for the taxable year that is derived from an investment in an asset acquired after December 31, 2011, as follows:

(a) For taxable years beginning from and after December 31, 2012 through December 31, 2013, ten percent of the net long-term capital gain included in federal adjusted gross income.

(b) For taxable years beginning from and after December 31, 2013 through December 31, 2014, twenty percent of the net long-term capital gain included in federal adjusted gross income.

(c) For taxable years beginning from and after December 31, 2014, twenty-five percent of the net long-term capital gain included in federal adjusted gross income. For the purposes of this paragraph, a transferee that receives an asset by gift or at the death of a transferor is considered to have acquired the asset when the asset was acquired by the transferor. If the date an asset is acquired cannot be verified, a subtraction under this paragraph is not allowed.

23. If an individual is not claiming itemized deductions pursuant to section 43-1042, the amount of premium costs for long-term care insurance, as defined in section 20-1691.

24. The amount of eligible access expenditures paid or incurred during the taxable year to comply with the requirements of the Americans with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, article 8 as provided by section 43-1024.

25. For taxable years beginning from and after December 31, 2017, the amount of any net capital gain included in Arizona gross income for the taxable year that is derived from the exchange of one kind of legal tender for another kind of legal tender. For the purposes of this paragraph:

(a) "Legal tender" means a medium of exchange, including specie, that is authorized by the United States Constitution or Congress to pay debts, public charges, taxes and dues.

(b) "Specie" means coins having precious metal content.

26. Benefits, annuities and pensions received as retired or retainer pay of the uniformed services of the United States in amounts as follows:

(a) For taxable years through December 31, 2018, an amount totaling not more than $2,500.

(b) For taxable years beginning from and after December 31, 2018 through December 31, 2020, an amount totaling not more than $3,500.

27. For taxable years beginning from and after December 31, 2020, the amount contributed during the taxable year to an achieving a better life experience account established pursuant to section 529A of the internal revenue code on behalf of the designated beneficiary to the extent that the contributions were not deducted in computing federal adjusted gross income. The amount subtracted may not exceed:

(a) $2,000 per beneficiary for a single individual or a head of household.

28. For taxable years beginning from and after December 31, 2020, Arizona small business gross income but only if an individual taxpayer has elected to separately report and pay tax on the taxpayer's Arizona small business adjusted gross income on the Arizona small business income tax return.

29. To the extent not already excluded from Arizona gross income under the internal revenue code, the value of virtual currency and non-fungible tokens the taxpayer received pursuant to an airdrop at the time of the airdrop. This paragraph may not be interpreted as providing a subtraction for any appreciation in value that occurs from holding the virtual currency after the initial receipt of the airdrop. For the purposes of this paragraph:

(a) "Airdrop" means the receipt of virtual currency through a means of distribution of virtual currency to the distributed ledger addresses of multiple taxpayers.

(b) "Non-fungible token" has the same meaning prescribed in section 43-1028.

30. The amount allowed as a subtraction by section 43-1028 for gas fees not already included in the taxpayer's virtual currency or non-fungible token basis.

31. The amount allowed pursuant to section 33-1420.01.END_STATUTE

Sec. 7. Section 43-1122, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1122. Subtractions from Arizona gross income; corporations

In computing Arizona taxable income for a corporation, the following amounts shall be subtracted from Arizona gross income:

1. The excess of a partner's share of income required to be included under section 702(a)(8) of the internal revenue code over the income required to be included under chapter 14, article 2 of this title.

2. The excess of a partner's share of partnership losses determined pursuant to chapter 14, article 2 of this title over the losses allowable under section 702(a)(8) of the internal revenue code.

3. The amount allowed by section 43-1025 for contributions during the taxable year of agricultural crops to charitable organizations.

4. The portion of any wages or salaries paid or incurred by the taxpayer for the taxable year that is equal to the amount of the federal work opportunity credit, the empowerment zone employment credit, the credit for employer paid social security taxes on employee cash tips and the Indian employment credit that the taxpayer received under sections 45A, 45B, 51(a) and 1396 of the internal revenue code.

5. With respect to property that is sold or otherwise disposed of during the taxable year by a taxpayer that complied with section 43-1121, paragraph 4 with respect to that property, the amount of depreciation that has been allowed pursuant to section 167(a) of the internal revenue code to the extent that the amount has not already reduced Arizona taxable income in the current taxable year or prior taxable years.

6. With respect to a financial institution as defined in section 6-101, expenses and interest relating to tax-exempt income disallowed pursuant to section 265 of the internal revenue code.

7. Dividends received from another corporation owned or controlled directly or indirectly by a recipient corporation. For the purposes of this paragraph, "control" means direct or indirect ownership or control of fifty percent or more of the voting stock of the payor corporation by the recipient corporation. Dividends shall have the meaning provided in section 316 of the internal revenue code. This subtraction shall apply without regard to section 43-961, paragraph 2 and article 4 of this chapter.

8. Interest income received on obligations of the United States.

9. The amount of dividend income from foreign corporations. For the purposes of this paragraph, gross up income as described in section 78 of the internal revenue code, global intangible low-taxed income as defined in section 951A of the internal revenue code and subpart F income as defined in section 952 of the internal revenue code shall be considered foreign dividends.

10. The amount of net operating loss allowed by section 43-1123.

11. The amount of any state income tax refunds received that were included as income in computing federal taxable income.

12. The amount of expense recapture included in income pursuant to section 617 of the internal revenue code for mine exploration expenses.

13. The amount of deferred exploration expenses allowed by section 43-1127.

14. The amount of exploration expenses related to the exploration of oil, gas or geothermal resources, computed in the same manner and on the same basis as a deduction for mine exploration pursuant to section 617 of the internal revenue code. This computation is subject to the adjustments contained in section 43-1121, paragraph 10 and paragraphs 12 and 13 of this section relating to exploration expenses.

15. The amortization of pollution control devices allowed by section 43-1129.

16. The amount of amortization of the cost of child care facilities pursuant to section 43-1130.

17. The amount of income from a domestic international sales corporation required to be included in the income of its shareholders pursuant to section 995 of the internal revenue code.

18. The income of an insurance company that is exempt under section 43-1201 to the extent that it is included in computing Arizona gross income on a consolidated return pursuant to section 43-947.

19. The amount by which a capital loss carryover allowable pursuant to section 43-1130.01, subsection F exceeds the capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code.

20. An amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year computed as if the election described in section 168(k)(7) of the internal revenue code had been made for each applicable class of property in the year the property was placed in service.

21. The amount of eligible access expenditures paid or incurred during the taxable year to comply with the requirements of the Americans with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, article 8 as provided by section 43-1124.

22. For taxable years beginning from and after December 31, 2017, the amount of any net capital gain included in Arizona gross income for the taxable year that is derived from the exchange of one kind of legal tender for another kind of legal tender. For the purposes of this paragraph:

(a) "Legal tender" means a medium of exchange, including specie, that is authorized by the United States Constitution or Congress to pay debts, public charges, taxes and dues.

(b) "Specie" means coins having precious metal content.

23. With respect to a public service corporation operating a water system or sewage disposal facility, the amount of monies or property received as a contribution in aid of construction. For the purposes of this paragraph:

(a) "Contribution in aid of construction" means any amount of monies or other property contributed to a public service corporation that provides water or sewage disposal services to the extent that the purpose of the contribution is to provide for expanding, improving or replacing the public service corporation's water system or sewage disposal facilities, including any amount of monies or other property contributed to a public service corporation for a water system or sewage disposal facility subject to a contingent obligation to repay the amount, in whole or in part, to the contributor.

(b) "Public service corporation" means a public service corporation as defined in article XV, section 2, Constitution of Arizona, that is regulated by the corporation commission.

24. The amount allowed pursuant to section 33-1420.01.END_STATUTE