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HB2019 - 572R - I Ver
PREFILED��� NOV 19 2025
REFERENCE TITLE:
individual income tax; filing exemption
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HB 2019
Introduced by
Representative
Keshel
AN
ACT
amending section 43-403, Arizona
Revised Statutes; amending title 43, chapter 10, article 4, Arizona Revised
Statutes, by adding section 43-1043; relating to individual income tax.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 43-403, Arizona Revised
Statutes, is amended to read:
START_STATUTE
43-403.
Employment excluded from withholding
A. No amount shall be deducted or retained from:
1. Wages or salary paid to an employee of a common
carrier when such employee is a nonresident of this state as defined in section
43-104 and regularly performs services both within and without this
state.
2. Wages paid for domestic service in a private
home.
3. Wages paid for casual labor not in the course of
the employer's trade or business.
4. Wages paid to part-time or seasonal employees
whose services to the employer consist solely of labor in connection with the
planting, cultivating, harvesting or field packing of seasonal agricultural
crops, except such employees whose principal duties are operating any
mechanically-driven device in such operations.
5. Wages or salary paid to a nonresident of this
state who is:
(a) An employee of an individual, fiduciary,
partnership, corporation or limited liability company having property, payroll
and sales in this state, or of a related entity having more than fifty per cent
direct or indirect common ownership.
(b) Physically present in this state for less than
sixty days in a calendar year for the purpose of performing a service that will
benefit the employer or the related entity. For purposes of
determining the number of days of service in this state, days spent in the
following activities are not included:
(i) In transit.
(ii) Engaging in personal activities.
(iii) Participating in training or professional
development activities or attending meetings that are not directly connected to
the Arizona operations of the employer or the related entity.
6. Wages or salary paid to a nonresident who is in
this state on a temporary basis for the purpose of performing disaster recovery
from a declared disaster during a disaster period as defined in section 42-1130.
7. Wages paid to an employee who is
under twenty-five years of age and Married to an individual who is under
twenty-five years of age.
B. In addition to the exemptions from the
withholding provisions contained in subsection A of this section, because of
the temporary nature of such employment, no amount shall be deducted or
retained from wages paid to a nonresident of this state engaged in any phase of
motion picture production when, prior to the time of payment of such wages, an
application is made by the employer to the department, on forms prescribed by
the department, for an exemption from the withholding provisions of this
section and the department determines that the nonresident would be allowed a
credit under section 43-1096 against all of the taxes upon such wages
imposed by this chapter.
C. Subsection A, paragraph 5 of this section does
not apply to a nonresident employee who is in this state solely for athletic or
entertainment purposes.
D. Notwithstanding subsection A, paragraphs 4 and 5
of this section:
1. A nonresident employee under subsection A,
paragraph 5 of this section or a part-time or seasonal employee under
subsection A, paragraph 4 of this section may elect to have withholding
deducted in the manner prescribed by section 43-401, subsection E and the
employer shall withhold tax pursuant to that election.
2. The employer may elect to withhold tax from the
nonresident employee before the sixty-day limitation has elapsed.
END_STATUTE
Sec. 2.
Heading change
The article heading of title 43,
chapter 10, article 4, Arizona Revised Statutes, is changed from
"DEDUCTIONS" to "DEDUCTIONS AND EXEMPTIONS".
Sec. 3. Title 43, chapter 10, article 4,
Arizona Revised Statutes, is amended by adding section 43-1043, to read:
START_STATUTE
43-1043.
Exemption; individuals under twenty-five years of age and
married
A. An individual who is under twenty-five
years of age and married to an individual who is under twenty-five years
of age is exempt from the tax imposed under this chapter with respect to that
taxable year, regardless of the source or nature of the income.
B. The department shall establish a
process to verify eligibility for the exemption under this section.
END_STATUTE
Sec. 4.
Applicability
This act applies to taxable years
beginning from and after December 31, 2026.