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HB2984 • 2026

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

Checked against official source text during the last sync.

Sales Tax Credit for Tribal Taxes

This bill allows businesses to get a credit on their Arizona sales tax if they pay taxes to an Indian tribe.

What This Bill Does

  • Creates a new rule that lets businesses claim a credit on their state sales tax if they paid taxes to an Indian tribe during the same period.
  • Limits the credit amount so it cannot be more than what the business owes in Arizona sales tax minus its share of money given to cities and counties.
  • Requires businesses to follow rules set by the department when claiming this credit.
  • Gives a special rule for certain tribes, where part of the credit goes directly to support education on their reservations.

Who It Names or Affects

  • Businesses that pay taxes to Indian tribes in Arizona
  • Indian tribes with community colleges or postsecondary educational institutions on their reservations

Terms To Know

Qualifying Indian tribe
An Indian tribe that owns, operates and charters a community college or postsecondary educational institution located on its own reservation in Arizona.
Transaction Privilege Tax (TPT)
A tax imposed by the state of Arizona on businesses for the privilege of conducting certain transactions.

Limits and Unknowns

  • The bill does not specify how much credit a business can claim in total.
  • It is unclear if all Indian tribes will qualify under this new rule.

Bill History

  1. 2026-02-09 House

    House second read

  2. 2026-02-05 House

    House Rules: None

  3. 2026-02-05 House

    House Ways & Means: None

  4. 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