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HB2088 - 572R - I Ver
PREFILED��� DEC 23 2025
REFERENCE TITLE:
legal tender; uses
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HB 2088
Introduced by
Representative
Kupper
AN
ACT
amending title 1, Arizona Revised
Statutes, by adding chapter 9; amending sections 6-851, 9-1443, 11-1943,
43-1021, 43-1022, 43-1121 and 43-1122, Arizona Revised
Statutes; relating to legal tender.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 1, Arizona Revised Statutes,
is amended by adding chapter 9, to read:
CHAPTER 9
LEGAL TENDER
ARTICLE 1. GENERAL PROVISIONS
START_STATUTE
1-901.
Definitions
In this chapter, unless the context otherwise
requires:
1. "Legal tender" means an
authorized medium of exchange for the payment of debts, taxes and public
charges.
2. "Specie" means coin or
refined bullion that has gold or silver content, including bars or ingots that
are marked with weight, purity and manufacturer information.
END_STATUTE
START_STATUTE
1-902.
Legal tender; compelled use prohibited; voluntary adoption;
forfeiture prohibition
A. Legal tender in this state consists of all of the
following:
1. Legal tender that is authorized by the United States congress
for the payment of debts, public charges, taxes and dues.
2. Specie coin that is issued at any time by the United
States government, except a numismatic coin with a fair market value that is at
least fifteen percent greater than the value of the metal it contains.
3. Refined specie bullion that is produced by a refiner
that is accredited by a nationally recognized precious metals association if
the refined specie bullion meets minimum purity standards of 0.999 for gold and
0.999 for silver.
4. Any other specie that a court of competent jurisdiction
rules by a final, unappealable order to be within the scope of this state's
authority to make a legal tender.
B. Except as expressly provided by contract, a person may
not compel any other person to tender or accept specie legal tender except that
this state shall promote voluntary adoption through education and incentives.
C. Specie is protected from seizure or confiscation by this
state except in cases of proven criminal activity and shall be treated as a
hedge against inflation and monetary instability.
END_STATUTE
START_STATUTE
1-903.
Legal tender exchanges; taxation and regulation; state treasurer
duties
A. Notwithstanding any other law, the purchase, sale,
exchange or transfer of one form of legal tender for another, including specie
or federal reserve notes, does not give rise to liability for any type of state
tax, including transaction privilege tax, use tax, capital gains, income tax or
property tax.
B. Legal tender, including
specie, is money and is not subject to taxation or regulation as property other
than money, including exemption from all state taxes on holdings, appreciation
or transactions involving precious metals.
C. Any tax that is due as a result of a transaction
involving specie legal tender shall be paid in the same specie or legal tender
or in an equivalent amount of nonspecie legal tender that is valued pursuant to
real-time market exchange rates that are provided by an independent precious
metals pricing service that is approved by the state treasurer.
D. The state treasurer shall establish guidelines for
valuation, including integration with digital platforms for instantaneous
conversions.
END_STATUTE
START_STATUTE
1-904.
Enforcement and implementation; rules; civil actions
A. The
attorney general shall enforce this chapter and, if necessary, intervene in any
legal action to preserve and protect this state's monetary authority that is
expressly reserved in article I, section 10 of the United States constitution.
B. The
state treasurer shall adopt rules to implement this chapter, including
standards for specie issuance, valuation protocols and public education
campaigns on sound money principles.
C. Any
person who is aggrieved by a violation of this chapter may bring a civil action
for injunctive relief and damages.� The court shall award reasonable attorney
fees to the prevailing party.
END_STATUTE
Sec. 2. Section 6-851, Arizona Revised
Statutes, is amended to read:
START_STATUTE
6-851.
Definitions
A. In this chapter, unless the context otherwise
requires:
1. "Trust business" means the holding out
by a person to the public at large by advertising, solicitation or other means
that the person is available to act as a fiduciary in this state and accepting
and undertaking to perform the duties as such a fiduciary in the regular course
of business.
2. "Trust company" means a corporation
holding a certificate issued under this article.
B. In this article, unless the context otherwise
requires:
1. "Agent" means a person who receives
compensation to regularly perform services specifically related to the conduct
of the trust business.
2. "Asset" means any property or property
right held by a licensee for the benefit of another.
3. "Capital" means the total of
outstanding common stock, preferred stock and surplus and undivided profits.
4. "Certificate" means a certificate of
authority issued under this chapter to engage in trust business.
5. "Contingency plan" means a document
stating a trust company's means of conducting business and preserving records
in the event of any power outage, flood or other physical emergency.
6. "Discretionary assets" means those
assets in which the trust company has the unilateral authority to determine
investment strategies and execute investment transactions without seeking the
concurrence, approval or authority from the customer or any other external
party.
7. "Fiduciary" means a personal
representative, administrator, guardian, conservator, trustee, agent or other
person who acts in a fiduciary capacity and who is not exempt by section 6-852.
8. "Impaired" or "insolvent"
means the trust company does not possess assets that are at least equal to
liabilities, required reserves and total issued and outstanding capital.
9. "Legal tender"
means a
medium of exchange, including specie, that is authorized by the United States
Constitution or Congress for the payment of debts, public charges, taxes and
dues
has the same meaning prescribed in section 1-901
.
10. "Liquid capital" means legal tender,
capital in the form of certificates of deposit issued by banks, savings banks
or savings and loan associations doing business in this state and insured by
the federal deposit insurance corporation or any successor institution,
including deposits to a single depository where excess deposit insurance is
provided through a reciprocal deposit arrangement by participating banks, or
direct obligations of the United States government with maturity of not more
than five years.
11. "Nondiscretionary assets" means those
assets for which the trust company must obtain from the customer, broker or
investment advisor specific direction and instructions regarding both
investment strategies and investment executions.
12. "Specie"
means coins
having precious metal content
has the same meaning
prescribed in section 1-901
.
13. "Surplus" means the total amount paid
by shareholders in excess of the par or stated value of the shares of capital
stock of a trust business in consideration for the shares.
END_STATUTE
Sec. 3. Section 9-1443, Arizona Revised
Statutes, is amended to read:
START_STATUTE
9-1443.
License fee; requirements, conditions and limitations; pass
through to subscribers
A. For the privilege of a video service provider to
occupy or use, in whole or in part, any highway within the boundaries of a
local government to provide video service through a video service network, the
local government may require a video service provider to pay a license fee to
the local government based on the gross revenue that the video service provider
receives from its subscribers located within the boundaries of the local
government.� The license fee both:
1. Is subject to the limit prescribed in section 9-1442,
subsection B and to offset, including amounts collected from subscribers, as
prescribed by section 9-1442, subsections A and I and subsection D of
this section.
2. Shall be due
no
not
more often than quarterly.
B. If the local government requires a license fee
pursuant to subsection A of this section, the local government shall adopt a
local law that imposes the license fee equally and uniformly on all of the
following that are operating within the boundaries of the local government:
1. Video service providers.
2. Holdover cable operators.
C. A video service provider shall pay the entire
amount of the license fee directly to the local government in a check, draft or
note or automated clearinghouse transaction that is payable in legal tender as
defined in section
43-1021
1-901
.
D. A video service provider may do all of the
following:
1. Pass the license fee through to and collect the
license fee from its subscribers within the boundaries of the local government,
including for an incumbent cable operator any change in license fees that
results from a change in the applicable definition of gross revenue.
2. Designate the amount of the license fee collected
from each subscriber as a separate line item on the subscriber's bill.
END_STATUTE
Sec. 4. Section 11-1943, Arizona Revised
Statutes, is amended to read:
START_STATUTE
11-1943.
License fee; requirements; conditions and limitations; pass
through to subscribers
A. For the privilege of a video service provider to
occupy or use, in whole or in part, any highway within the boundaries of a
county to provide video service through a video service network, the county may
require a video service provider to pay a license fee to the county based on
the gross revenue that the video service provider receives from its subscribers
located within the boundaries of the county.� The license fee both:
1. Is subject to the limit prescribed by section 11-1942,
subsection B and to offset, including amounts collected from subscribers, as
prescribed by section 11-1942, subsections A and I and subsection D of
this section.
2. Shall be due
no
not
more often than quarterly.
B. If the county requires a license fee pursuant to
subsection A of this section, the county shall adopt a local law that imposes
the license fee equally and uniformly on all of the following that are
operating within the boundaries of the county:
1. Video service providers.
2. Holdover cable operators.
C. A video service provider shall pay the entire
amount of the license fee directly to the county in a check, draft or note or
automated clearinghouse transaction that is payable in legal tender as defined
in section
43-1021
1-901
.
D. A video service provider may do all of the
following:
1. Pass the license fee through to and collect the
license fee from its subscribers within the boundaries of the county, including
for an incumbent cable operator any change in license fees that results from a
change in the applicable definition of gross revenue.
2. Designate the amount of the license fee collected
from each subscriber as a separate line item on the subscriber's bill.
END_STATUTE
Sec. 5. Section 43-1021, Arizona Revised
Statutes, is amended to read:
START_STATUTE
43-1021.
Addition to Arizona gross income
In computing Arizona adjusted
gross income, the following amounts shall be added to Arizona gross income:
1. A beneficiary's share of the fiduciary adjustment
to the extent that the amount determined by section 43-1333 increases the
beneficiary's Arizona gross income.
2. An amount equal to the ordinary income portion of
a lump sum distribution that was excluded from federal adjusted gross income
pursuant to the special rule for individuals who attained fifty years of age
before January 1, 1986 under Public Law 99-514, section 1122(h)(3).
3. The amount of interest
income received on obligations of any state, territory or possession of the
United States, or any political subdivision thereof, located outside of this
state, reduced, for taxable years beginning from and after December 31, 1996,
by the amount of any interest on indebtedness and other related expenses that
were incurred or continued to purchase or carry those obligations and that are
not otherwise deducted or subtracted in arriving at Arizona gross income.
4. The excess of a
partner's share of partnership taxable income required to be included under
chapter 14, article 2 of this title over the income required to be reported
under section 702(a)(8) of the internal revenue code.
5. The excess of a
partner's share of partnership losses determined pursuant to section 702(a)(8)
of the internal revenue code over the losses allowable under chapter 14,
article 2 of this title.
6. Any amount of agricultural water conservation
expenses that were deducted pursuant to the internal revenue code for which a
credit is claimed under section 43-1084.
7. The amount by which the depreciation or
amortization computed under the internal revenue code with respect to property
for which a credit was taken under section 43-1081.01 or that is
pollution control equipment for which a credit was taken before taxable year
2022 exceeds the amount of depreciation or amortization computed pursuant to
the internal revenue code on the Arizona adjusted basis of the property.
8. The amount by which the adjusted basis computed
under the internal revenue code with respect to property for which a credit was
claimed under section 43-1074.02 or 43-1081.01 or that is pollution
control equipment for which a credit was taken before taxable year 2022 and
that is sold or otherwise disposed of during the taxable year exceeds the
adjusted basis of the property computed under section 43-1074.02 or 43-1081.01 or
for pollution control equipment, the section in which the credit was taken, as
applicable.
9. The deduction referred to in section 1341(a)(4)
of the internal revenue code for restoration of a substantial amount held under
a claim of right.
10. The amount by which a net operating loss
carryover or capital loss carryover allowable pursuant to section 1341(b)(5) of
the internal revenue code exceeds the net operating loss carryover or capital
loss carryover allowable pursuant to section 43-1029, subsection F.
11. The amount of any depreciation allowance allowed
pursuant to section 167(a) of the internal revenue code to the extent not
previously added.
12. The amount of a nonqualified withdrawal, as
defined in section 15-1871, from a college savings plan established
pursuant to section 529 of the internal revenue code that is made to a
distributee to the extent the amount is not included in computing federal
adjusted gross income, except that the amount added under this paragraph shall
not exceed the difference between the amount subtracted under section 43-1022
in prior taxable years and the amount added under this section in any prior
taxable years.
13. If a subtraction is or has been taken by the
taxpayer under section 43-1024, in the current or a prior taxable year
for the full amount of eligible access expenditures paid or incurred to comply
with the requirements of the Americans with disabilities act of 1990
(P.L. 101-336) or title 41, chapter 9, article 8, any amount of
eligible access expenditures that is recognized under the internal revenue
code, including any amount that is amortized according to federal amortization
schedules, and that is included in computing taxable income for the current
taxable year.
14. For taxable years beginning from and after
December 31, 2017, the amount of any net capital loss 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
has the same meaning
prescribed in section 1-901
.
(b) "Specie"
means coins
having precious metal content
has the same meaning
prescribed in section 1-901
.
15. For taxable years beginning from and after
December 31, 2021, the amount deducted by the partnership or S corporation
pursuant to the internal revenue code for the amount paid to this state under
section 43-1014 and for taxes that the department determines are
substantially similar to the tax imposed under section 43-1014.� This
amount shall be reflected in the partner's or shareholder's Arizona gross
income and the partnership's or S corporation's Arizona taxable income.
16. The amount of any motion picture production
costs that was deducted pursuant to the internal revenue code for which a tax
credit is claimed under section 43-1082.�
END_STATUTE
Sec. 6. Section 43-1022, Arizona Revised
Statutes, is amended to read:
START_STATUTE
43-1022.
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.� 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.� The amount subtracted may not exceed:
(a) In taxable years beginning before December 31,
2025, $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.�
(b) In taxable years beginning from and after
December 31, 2025, $5,000 for a single individual or head of household.
(c) For taxable years beginning from and after
December 31, 2025, $10,000 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 $10,000.�
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
has the same meaning prescribed in section 1-901
.
(b) "Specie"
means coins
having precious metal content
has the same meaning
prescribed in section 1-901
.
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.
(c) For taxable years beginning from and after
December 31, 2020, the full amount received.
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.
(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.
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.
(c) "Virtual currency" 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.
END_STATUTE
Sec. 7. Section 43-1121, Arizona Revised
Statutes, is amended to read:
START_STATUTE
43-1121.
Additions to Arizona gross income; corporations
In computing Arizona taxable income for a corporation, the
following amounts shall be added to Arizona gross income:
1. The amount of interest income received on
obligations of any state, territory or possession of the United States, or any
political subdivision thereof, located outside this state, reduced, for taxable
years beginning from and after December 31, 1996, by the amount of any interest
on indebtedness and other related expenses that were incurred or continued to
purchase or carry those obligations and that are not otherwise deducted or
subtracted in arriving at Arizona gross income.
2. The excess of a partner's share of partnership
taxable income required to be included under chapter 14, article 2 of this
title over the income required to be reported under section 702(a)(8) of the
internal revenue code.
3. The excess of a partner's share of partnership
losses determined pursuant to section 702(a)(8) of the internal revenue code
over the losses allowable under chapter 14, article 2 of this title.
4. The amount of any depreciation allowance allowed
pursuant to section 167(a) of the internal revenue code to the extent not
previously added.
5. The amount of dividend income received from
corporations and allowed as a deduction pursuant to sections 243, 245, 245A and
250(a)(1)(B) of the internal revenue code.
6. Taxes that are based on income paid to states,
local governments or foreign governments and that were deducted in computing
federal taxable income.
7. Expenses and interest relating to tax-exempt
income on indebtedness incurred or continued to purchase or carry obligations
the interest on which is wholly exempt from the tax imposed by this title.�
Financial institutions, as defined in section 6-101, shall be governed by
section 43-961, paragraph 2.
8. Commissions, rentals and other amounts paid or
accrued to a domestic international sales corporation controlled by the payor
corporation if the domestic international sales corporation is not required to
report its taxable income to this state because its income is not derived from
or attributable to sources within this state. If the domestic
international sales corporation is subject to article 4 of this chapter, the
department shall prescribe by rule the method of determining the portion of the
commissions, rentals and other amounts that are paid or accrued to the
controlled domestic international sales corporation and that shall be deducted
by the payor.� 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 domestic international sales corporation by the payor corporation.
9. The amount of net operating loss taken pursuant
to section 172 of the internal revenue code.
10. The amount of exploration expenses determined
pursuant to section 617 of the internal revenue code to the extent that they
exceed $75,000 and to the extent that the election is made to defer those
expenses not in excess of $75,000.
11. Amortization of costs incurred to install
pollution control devices and deducted pursuant to the internal revenue code or
the amount of deduction for depreciation taken pursuant to the internal revenue
code on pollution control devices for which an election is made pursuant to
section 43-1129.
12. The amount of depreciation or amortization of
costs of child care facilities deducted pursuant to section 167 or 188 of the
internal revenue code for which an election is made to amortize pursuant to
section 43-1130.
13. The loss 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.
14. The amount by which the depreciation or
amortization computed under the internal revenue code with respect to property
for which a credit was taken under section 43-1170 exceeds the amount of
depreciation or amortization computed pursuant to the internal revenue code on
the Arizona adjusted basis of the property.
15. The amount by which the adjusted basis computed
under the internal revenue code with respect to property for which a credit was
claimed under section 43-1170 and that is sold or otherwise disposed of
during the taxable year exceeds the adjusted basis of the property computed
under section 43-1170.
16. The deduction referred to in section 1341(a)(4)
of the internal revenue code for restoration of a substantial amount held under
a claim of right.
17. The amount by which a capital loss carryover
allowable pursuant to section 1341(b)(5) of the internal revenue code exceeds
the capital loss carryover allowable pursuant to section 43-1130.01,
subsection F.
18. Any wage expenses deducted pursuant to the
internal revenue code for which a credit is claimed under section 43-1175
and representing net increases in qualified employment positions for employment
of temporary assistance for needy families recipients.
19. Any amount of expenses that were deducted
pursuant to the internal revenue code and for which a credit is claimed under
section 43-1178.
20. Any amount deducted pursuant to section 170 of
the internal revenue code representing contributions to a school tuition
organization for which a credit is claimed under section 43-1183 or 43-1184.
21. If a subtraction is or has been taken by the
taxpayer under section 43-1124, in the current or a prior taxable year
for the full amount of eligible access expenditures paid or incurred to comply
with the requirements of the Americans with disabilities act of 1990
(P.L. 101-336) or title 41, chapter 9, article 8, any amount of
eligible access expenditures that is recognized under the internal revenue
code, including any amount that is amortized according to federal amortization
schedules, and that is included in computing Arizona taxable income for the
current taxable year.
22. For taxable years beginning from and after
December 31, 2017, the amount of any net capital loss 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
has the same meaning
prescribed in section 1-901
.
(b) "Specie"
means coins
having precious metal content
has the same meaning
prescribed in section 1-901
.
23. The amount of any deduction that is claimed in
computing Arizona gross income and that represents a donation of a school site
for which a credit is claimed under section 43-1181.
24. The amount of any motion picture production
costs that was deducted pursuant to the internal revenue code for which a tax
credit is claimed under section 43-1165.�
END_STATUTE
Sec. 8. Section 43-1122, Arizona Revised
Statutes, is amended to read:
START_STATUTE
43-1122.
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
has the same meaning prescribed in section 1-901
.
(b) "Specie"
means coins
having precious metal content
has the same meaning
prescribed in section 1-901
.
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.
END_STATUTE
Sec. 9.
Short title
This act may be cited as the "Ron Swanson Act".