Read the full stored bill text
HB4029 - 572R - H Ver
House Engrossed
income tax changes;
notification; forms
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 4029
AN
ACT
amending title 41, chapter 1, article 1,
Arizona Revised Statutes, by adding section 41-112; amending sectionS 42-1005
AND 43-323, Arizona Revised Statutes; relating to income tax.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section
1.
1. Title
41, chapter 1, article 1, Arizona Revised Statutes, is amended by adding
section 41-112, to read:
START_STATUTE
41-112.
Evaluation and determination of income tax law changes; special
session analysis and notification
A. Each year, The governor's office
of strategic planning and budgeting and the joint legislative budget committee
shall
individually evaluate and determine if conforming
the laws of this state with changes made to the internal revenue code for
calculating federal adjusted gross income for the purpose of calculating
taxable income in this state will result in an increase or decrease of income
tax revenues of $100,000,000 or more compared to the amount of income tax
revenues that would be collected if the laws of this state did not conform to
the internal revenue code changes.
B. Before September 30 of each year
in which the evaluation made
by either the
governor's office of strategic planning and budgeting or the joint legislative
budget committee pursuant to subsection A of this section
exceeds an increase or decrease of income tax revenues of $100,000,000
or more, the governor shall determine if a special session of the legislature
is necessary to conform the laws of this state to the changes in the internal
revenue code and shall notify in writing the president of the senate and the
speaker of the house of representatives of that determination and the reasons
that support the determination.
END_STATUTE
Sec.
2.
2. Section
42-1005, Arizona Revised Statutes, is amended to read:
START_STATUTE
42-1005.
Powers and duties of director
A. The director shall be directly responsible to the
governor for the direction, control and operation of the department and shall:
1. Make such administrative rules as
he
the director
deems necessary and proper to effectively
administer the department and enforce this title and title 43.
2. On or before November 15 of each year
,
issue a written report to the governor and legislature
concerning the department's activities during the year. In any
election year
,
a copy of this report shall be made
available to the governor-elect and to the legislature-elect.
3. On or before December 15 of each year
,
issue a supplemental report
which
that
shall also contain proposed legislation recommended by the
department for the improvement of the system of taxation in
the
this
state.
4. In addition to the report required by paragraph 2
of this subsection, on or before November 15 of each year
,
issue a written report to the governor and legislature detailing the
approximate costs in lost revenue for all state tax expenditures in effect at
the time of the report. For the purpose of this paragraph, "tax
expenditure" means any tax provision in state law
which
that
exempts, in whole or in part, any persons, income,
goods, services or property from the impact of established taxes
,
including deductions, subtractions, exclusions, exemptions, allowances and
credits.
5.
Annually,
On or before
January 10
September 30 of each year
,
prepare and submit to the legislature
a
an initial
report containing a summary of
all the revisions made to the internal revenue code during the preceding
calendar year
and on or before january 10 of each year, submit a
final report to the legislature
.
6. Provide
such
assistance to
the governor and the legislature as they may require.
7. Delegate
such
administrative
functions, duties or powers as
he
the director
deems necessary to carry out the efficient
operation of the department.
B. The director may enter into an agreement with the
taxing authority of any state
which
that
imposes a tax on or measured by income to provide that
compensation paid in that state to residents of this state is exempt in that
state from liability for income tax, the requirement for filing a tax return
and withholding tax from compensation. Compensation paid in this
state to residents of that state is reciprocally exempt from the requirements
of title 43.
END_STATUTE
END_STATUTE
END_STATUTE
Sec.
3.
3. Section
43-323, Arizona Revised Statutes, is amended to read:
START_STATUTE
43-323.
Place and form of
filing returns
A. All returns required by this title shall be in
such a form as the department may from time to time prescribe and shall be
filed with the department.
B. The department shall prescribe a short form
return for individual taxpayers who:
1. Are eligible and elect to pay tax based on the
optional tax tables pursuant to section 43-1012.
2. Elect to claim the optional standard deduction
pursuant to section 43-1041, subsection A, but not the increased amount
for charitable deductions under section 43-1041, subsection I.
3. Elect not to file for credits against income tax
liability other than those contained in sections 43-1072, 43-1072.01,
43-1072.02, 43-1073 and 43-1073.01.
4. Are not required to add any income under section
43-1021 and do not elect any subtractions under section 43-1022,
except for the exemptions allowed under section 43-1023.
C. The department may provide a simplified return
form for individual taxpayers who:
1. Are eligible and elect to pay tax based on the
optional tax tables pursuant to section 43-1012.
2. Are residents for the full taxable year.
3. File as single individuals or married couples
filing joint returns under section 43-309.
4. Are not sixty-five years of age or older or
blind at the end of the taxable year.
5. Claim no exemptions under section 43-1023
for the taxable year.
6. Elect to claim the optional standard deduction
under section 43-1041, subsection A, but not the increased amount for
charitable deductions under section 43-1041, subsection I.
7. Are not required to add any income under section
43-1021 and do not elect to claim any subtractions under section 43-1022
or file for any credits under chapter 10, article 5 of this title, except the
credits provided by sections 43-1072.01, 43-1072.02 and 43-1073.
8. Do not elect to contribute a portion of any tax
refund as provided by any provision of chapter 6, article 1 of this title.�
Notwithstanding any provision of chapter 6, article 1 of this title, a
simplified return form under this subsection shall not include any space for
the taxpayer to so contribute a portion of a refund.
D. The department shall prepare blank forms for the
returns and furnish them on request.� Failure to receive or secure the form
does not relieve any taxpayer from making any return required.
E. An individual income tax preparer who prepares
more than ten original income tax returns that are timely filed during any
taxable year that begins from and after December 31, 2017 shall file
electronically all individual tax returns prepared by that tax preparer, for
that taxable year and each subsequent taxable year.� An individual income tax
preparer may not charge a separate fee to the taxpayer for filing a return
using the department's electronic filing program.� This subsection does not
apply if the taxpayer elects to have the return filed on paper or if the return
cannot be filed electronically for reasons outside of the tax preparer's
control.
F. Fiduciary returns, partnership returns,
withholding returns and corporate returns shall be filed electronically for
taxable years beginning from and after December 31, 2019, or when the
department establishes an electronic filing program, whichever is
later. Any person who is required to file electronically pursuant to
this subsection may apply to the director, on a form prescribed by the
department, for an annual waiver from the electronic filing requirement.� The
director may grant the waiver, which may be renewed for one subsequent year, if
any of the following applies:
1. The taxpayer has no computer.
2. The taxpayer has no internet access.
3. Any other circumstance considered to be worthy by
the director exists.
G. A waiver is not
required if the return cannot be electronically filed for reasons beyond the
taxpayer's control, including situations in which the taxpayer was instructed
by either the internal revenue service or the department of revenue to file by
paper.
H. The department may
not prescribe forms for returns pursuant to this section that are inconsistent
with the statutes that are in effect on the date that the forms are issued.
END_STATUTE