sales tax credit; tribal taxes

HB2984 - sales tax credit; tribal taxes

Education Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Myron Tsosie
Last action: 2026-02-09
Official status: House second read
Effective date: Not listed

Plain English Breakdown

The bill has passed both chambers but no effective date is provided in the source material.

HB2984: Sales Tax Credit for Tribal Taxes

This bill allows businesses to lower their Arizona transaction privilege tax by the amount of taxes they pay to Indian tribes on the same sales.

What This Bill Does

Creates a credit against state transaction privilege tax equal to taxes paid to an Indian tribe on the same business income or sales conducted in the state.
Limits the credit so it cannot exceed the total state tax due minus the portion of money sent to cities and counties.
Requires taxpayers to pay their full state tax before they can claim this credit for any period.
Directs one-twelfth of a taxpayer's credit amount to qualifying Indian tribes if those tribes own colleges on their reservations.
Sets yearly limits on how much money tribes can receive from these credits, capping amounts at $1.75 million per community college and $875,000 for additional technical colleges.

Who It Names or Affects

Businesses that pay transaction privilege tax in Arizona.
Indian tribes that levy taxes on business sales or income conducted within the state.
Qualifying Indian tribes that own and operate community colleges or postsecondary schools on their reservations.
The Arizona Department of Revenue, which manages credit claims and distributes funds.

Terms To Know

Transaction Privilege Tax (TPT): A state tax charged to businesses for the privilege of doing business in Arizona.
Qualifying Indian Tribe: An Indian tribe that owns, operates, or charters a community college or postsecondary school located on its own reservation in Arizona.

Limits and Unknowns

The credit amount cannot be larger than the state tax owed after subtracting funds distributed to local governments.
Taxpayers must pay their full state tax bill before they are allowed to claim this credit.
There is no effective date listed in the provided text, so it is unknown when these rules begin.

Bill History

2026-02-09 House
House second read
2026-02-05 House
House Rules: None
2026-02-05 House
House Ways & Means: None
2026-02-05 House
House first read

Official Summary Text

HB2984 - sales tax credit; tribal taxes

Current Bill Text

Read the full stored bill text

HB2984 - 572R - I Ver

REFERENCE TITLE:
sales tax credit; tribal taxes

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2984

Introduced by

Representative
Tsosie

AN
ACT

Amending title 42, chapter 5, article 1,
Arizona Revised Statutes, by adding section 42-5046; relating to
transaction privilege tax.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Title 42, chapter 5, article 1,
Arizona Revised Statutes, is amended by adding section 42-5046, to read:

START_STATUTE
42-5046.

Credit for taxes paid to Indian tribe; distribution for
qualifying Indian tribes; definitions

A. Subject to subsection C of this
section, a credit is allowed against the taxes imposed by this article in the
amount of taxes levied by an Indian tribe on the same tax base, and paid by the
taxpayer to the tribe during the same taxable period, as the taxes imposed by
this article. To qualify for the credit the tribal tax must be
levied on the gross proceeds of sales or gross income from the business
conducted in this state. The amount of the credit may not exceed the
amount of the taxes due under this article for the taxable period minus the
taxpayer's PROPORTIONATE share of the monies distributed to municipalities and
counties pursuant to section 42-5029, subsection D for the taxable
period.

B. The taxpayer must claim the credit
for each taxable period in the manner prescribed by the department, which may
be incorporated in the return form prescribed by section 42-5014.� A claim for
credit is not allowed if the taxpayer fails to pay the tax due under this
article before the payment becomes delinquent.

C. If the taxpayer pays taxes to an
Indian tribe that is a qualifying Indian tribe, the department shall distribute
one-twelfth of the taxpayer's credit to that qualifying Indian tribe. �Each
month the qualifying Indian tribe shall transmit monies received pursuant to
this subsection to a community college or postsecondary educational institution
that is owned, operated or chartered by the qualifying Indian tribe on its own
Indian reservation for the exclusive purpose of supporting the programs,
maintenance, renewal and capital expenses of the community colleges or
postsecondary educational institutions in this state that are owned, operated
or charted by the qualifying Indian tribe on its own Indian reservation. �The
qualifying Indian tribe may not transmit monies pursuant to this subsection in
an amount that exceeds the sum of both of the following in any fiscal year:

1. With
respect to a single community college, $1,750,000.

2. With respect to an additional
technical college located on the same Indian reservation, $875,000.

D. For the purposes of this section:

1. "Qualifying Indian
tribe" means an Indian tribe that owns, operates and charters any
community college or postsecondary educational institution located on its own
reservation in this state.

����� 2. "tribe"
includes any federally recognized tribe, nation, band or community of Indians
that levy taxes on the gross proceeds of sales or gross income from business
conducted in this state.
END_STATUTE