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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
ENACTED
FACT SHEET FOR S.b. 1171/H.B. 2383
conformity; internal revenue code
Purpose
Conforms Arizona tax statutes to the U.S. Internal Revenue Code (U.S. IRC) as of January 1, 2023, to reflect changes adopted by the U.S. Congress during 2022.
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 revised conformity report provided by the Arizona Department of Revenue, the fiscal impact to the state General Fund associated with S.B. 1171 is estimated to be $(3.47) million in FY 2023, $(10.24) million in FY 2024 and $(11.62) million in FY 2025.
Provisions
1. Updates the statutory definition of Internal Revenue Code to include all provisions in effect as of January 1, 2023, with the specific adoption of all retroactive effective dates, excluding any changes to the U.S. IRC enacted after January 1, 2023.
2. Makes technical and conforming changes.
3. Becomes effective on the general effective date.
Senate Action House Action
FIN 1/30/23 DP 7-0-0 WM 1/18/23 DP 10-0-0-0
3rd Read 2/16/23 28-0-2 3rd Read 2/20/23 56-0-4
(S.B. 1171 was substituted for H.B. 2383 on 3rd Read)
Signed by the Governor 3/3/23
Chapter 2
Prepared by Senate Research
March 7, 2023
MG/sr