HB4029 • 2026

income tax changes; notification; forms

HB4029 - income tax changes; notification; forms

Budget Taxes

Passed Legislature

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

Sponsor: Justin Olson
Last action: 2026-03-30
Official status: Senate minority caucus
Effective date: Not listed

Plain English Breakdown

The official status indicates the bill passed both chambers and reached final enrollment, but no specific effective date is listed in the provided metadata.

HB4029: Rules for Checking Federal Tax Changes and Updating State Forms

This law requires state agencies to check if matching federal tax changes will change Arizona income tax revenue by at least $100 million, asks the Governor to decide on special legislative sessions if needed, updates when reports are due, and clarifies rules for creating tax forms.

What This Bill Does

Requires the Governor's Office of Strategic Planning and Budgeting (OSPB) and the Joint Legislative Budget Committee (JLBC) to each calculate annually if matching new federal tax laws would change state income tax revenue by $100 million or more.
Asks the Governor to decide before September 30 whether a special legislative session is needed in years where those changes are expected to exceed $100 million.
Directs the Governor to send written notice to Senate and House leaders explaining why a special session is necessary if one is called.
Changes deadlines for tax reports so an initial summary of federal law changes is due by September 30 and a final report is due by January 10.
Removes a rule that stopped the Department of Revenue from creating tax forms that differ slightly from current statutes.

Who It Names or Affects

The Governor's Office of Strategic Planning and Budgeting
The Joint Legislative Budget Committee
The Arizona Department of Revenue Director
State legislators who may be called to a special session

Terms To Know

Conformity: Updating state tax laws to match changes made by the U.S. Congress in federal tax rules.
Federal Adjusted Gross Income (FAGI): The starting number used from federal taxes to calculate how much Arizona income tax a person owes.
Special Session: A meeting of the state Legislature held outside its regular schedule to pass specific laws.

Limits and Unknowns

The bill does not say exactly how much money will be raised or lost until agencies finish their yearly calculations.
It is unclear if a special session will actually happen because the Governor decides based on future evaluations.
The text notes there is no expected cost to the state General Fund for passing this law, but it does not list costs for running any potential special sessions.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

HOUSE - Ways & Means (Adopted)

Adopted

Plain English: Adopted 1

The official amendment file could not be read automatically during the last sync, so only the official amendment metadata is shown right now.

HOUSE - Ways & Means (Proposed)

Proposed

Plain English: This amendment requires state officials to check if federal tax changes will significantly affect Arizona's income and forces the Governor to call a special legislative session if those financial impacts are large enough.

The Governor's Office of Strategic Planning and Budgeting and the Joint Legislative Budget Committee must each year calculate if matching federal tax laws would change state revenue by $100 million or more.
If that calculation shows a big change in money, the Governor must decide if a special meeting of the legislature is needed to update Arizona's tax laws.
The Director of Revenue must now submit an initial report on changes to federal tax rules by September 30 instead of January 10.
The Department of Revenue may create a simplified tax form for single or married taxpayers who are under age 65, not blind, and do not claim most deductions or credits.

The official text provided is cut off at the end, so the full list of rules for the new simplified tax form cannot be explained completely.
Some parts of the amendment use technical legal terms like 'tax expenditures' and specific statute numbers that are hard to define without more context.

SENATE - Finance (Adopted)

Adopted

Plain English: This amendment requires state officials to check if federal tax changes will significantly affect Arizona's income, forces the Governor to call a special legislative session if needed, and creates new rules for simplified tax forms.

The Governor's budget office and the Joint Legislative Budget Committee must each year calculate if matching federal tax law changes would change state revenue by $100 million or more.
If those calculations show a change of over $100 million, the Governor must decide before September 30 whether to call a special legislative session to update Arizona's laws and notify lawmakers in writing.
The Director of Revenue must submit two reports each year: an initial report by January 10 summarizing federal tax code changes from the previous year, and a final report also due on that date.
New rules allow for simplified or short-form tax returns for individuals who meet specific requirements, such as using standard deductions and not claiming most credits.

The official text provided is cut off at the end of Section 3, so some details about the final eligibility rule for the simplified tax form are missing.
Some technical legal terms like 'tax expenditures' or specific section numbers were kept simple but may have complex meanings not fully explained in this summary.

SENATE - Finance (Proposed)

Proposed

Plain English: This amendment requires state officials to check if federal tax changes will significantly affect Arizona's income, forces the Governor to call special legislative sessions for big changes, and creates new short forms for simple tax returns.

The Governor's budget office and a legislative committee must yearly calculate if matching federal tax laws would change state revenue by $100 million or more.
If that calculation shows a change of over $100 million, the Governor must decide if a special meeting of the legislature is needed to update Arizona's tax laws.
The Department of Revenue director must submit two reports each year: one in September summarizing federal tax changes and another final report by January 10.
New rules allow taxpayers with simple financial situations, such as those using standard deductions without extra credits or exemptions, to use shorter or simplified tax forms.

The official text provided is cut off at the end of Section 3, so some details about who qualifies for the simplified form are missing.
Because the full list of requirements for the new short forms is incomplete in this document, we cannot explain every specific rule a taxpayer must follow to use them.

Bill History

2026-03-30 Senate
Senate minority caucus
2026-03-30 Senate
Senate majority caucus
2026-03-10 Senate
Senate second read
2026-03-09 Senate
Senate Rules: PFC
2026-03-09 Senate
Senate Finance: DPA
2026-03-09 Senate
Senate first read
2026-02-26 Senate
Transmitted to Senate
2026-02-26 House
House third read passed
2026-02-23 House
House committee of the whole
2026-02-17 House
House minority caucus
2026-02-17 House
House majority caucus
2026-02-10 House
House second read
2026-02-09 House
House Rules: C&P
2026-02-09 House
House Ways & Means: DPA
2026-02-09 House
House first read

Official Summary Text

HB4029 - 572R - Senate Fact Sheet

Assigned to
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PASSED BY COMMITTEE

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

AMENDED

FACT SHEET FOR
H.B. 4029

income tax
changes; notification; forms

Purpose

Requires the
Governor's Office of Strategic Planning and Budgeting (OSPB) and the Joint
Legislative Budget Committee (JLBC) to each annually evaluate whether the
fiscal impact of conforming Arizona law to the changes adopted by the U.S.
Congress in the prior year will exceed $100 million. Requires the Governor, in
a year determined to have a fiscal impact of at least $100 million, to
determine if a special session of the Legislature is necessary for the purposes
of conformity.

Background

The Arizona
Legislature periodically updates the statutory definition of the U.S. IRC to
include any federal provisions that became effective in the preceding calendar
year as a means of paralleling the computation of Arizona income tax and other
statutory references throughout the Arizona Revised Statutes to the amended
U.S. IRC. Tax conformity with the U.S. IRC is deemed necessary because the
calculation of Arizona corporate income tax liability begins with federal
taxable income. Similarly, federal adjusted gross income (FAGI) is the starting
point for individual income tax assessment.

Conformity
means
an amendment to
A.R.S.
� 43-105
that results in adoption of the definition of the U.S. IRC for the
taxable year.
Nonconformity
means either: 1) conformity plus another
amendment that does not conform to specific provisions of the U.S. IRC as statutorily
defined for the taxable year; or 2) no amendment to the definition of U.S. IRC for
the taxable year (
A.R.S.
� 43-107
).

By January 10
each year, the Director of the Arizona Department of Revenue (ADOR) must
prepare and submit to the Legislature a report containing a summary of all
revisions made to the U.S. IRC during the preceding calendar year (
A.R.S.
� 42-1005
).

By adopting the
income tax statutes, the Legislature declared its intent to adopt the
provisions of the U.S. IRC relating to FAGI and federal taxable income, subject
only to modifications contained in state law (
A.R.S.
� 43-102
).

All tax returns
required by state law must be in a form that is prescribed by ADOR, and ADOR
must prepare blank return forms and furnish the forms on request (
A.R.S.
� 43-323
).

There is no
anticipated fiscal impact to the state General Fund associated with this
legislation.

Provisions

Requires both OSPB and JLBC to annually evaluate and determine if
conforming Arizona law to the changes made to the U.S. IRC for calculating FAGI
for the purpose of calculating taxable income in Arizona will result in an
increase or decrease of income tax revenues of $100 million or more compared to
the amount of revenues that would be collected if Arizona law did not conform
to the U.S. IRC changes.

Requires the Governor, before September 30 of each year in which either
OSPB or JLBC determines that conforming to the U.S. IRC will increase or
decrease income tax revenues by $100 million or more, to determine if a special
session of the Legislature is necessary to conform Arizona law to the U.S. IRC
changes.

Requires the Governor, if the Governor determines that a special session
is necessary to conform Arizona law to the U.S. IRC changes, to notify the
President of the Senate and the Speaker of the House of Representatives in
writing of the determination and the reasons that support the determination.

Requires the Director of ADOR, by September 30 each year, to prepare and
submit to the Legislature an initial report containing a summary of all
revisions made to the U.S. IRC during the preceding calendar year.

Specifies that the report submitted by the Director of ADOR to the
Legislature on January 10 of each year must be a final report of the revisions
made to the U.S. IRC during the preceding calendar year.

Makes technical changes.

Becomes effective on the general effective date.

Amendments Adopted by
Committee

�

Removes the prohibition against ADOR prescribing tax return forms
that are inconsistent with the statutes in effect on the date the forms are
issued.

House Action
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Senate
Action

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Prepared by Senate Research

March 25, 2026

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Current Bill Text

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