Read the full stored bill text
SB1180 - 572R - H Ver
House Engrossed
Senate Bill
DOR; income tax
forms; conformity
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1180
AN
ACT
amending section 43-107, Arizona
Revised Statutes; amending title 43, chapter 3, article 2, Arizona Revised
Statutes, by adding section 43-329; relating to income tax returns.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Section 43-107, Arizona Revised
Statutes, is amended to read:
START_STATUTE
43-107.
Nonconformity in application of internal revenue code; abatement
of penalties and interest; form and instruction preparation; definitions
A. Notwithstanding
sections 42-1123 and 42-1125,
no
interest or
penalty may
not
be assessed on a nonconformity deficiency
if all of the following are true for a taxable year:
1. The taxpayer filed a return and paid the taxes
due, relying on the department's published forms and instructions.
2. Conformity does not occur.
3. The department supplements
its
the
published forms and instructions related to
nonconformity and requires the taxpayer to file an amended return.
4.
By the extended due date of the
next taxable year's return
ON OR BEFORE THE EXTENDED
RETURN DUE DATE FOR THE SECOND YEAR FOLLOWING THE CLOSE OF THAT TAXABLE YEAR
,
the taxpayer amends
its
the taxpayer's
return
to report the nonconformity deficiency and pays the additional tax in the
manner prescribed by the department.
B. IF NONCONFORMITY
OCCURS FOR A TAXABLE YEAR, THE DEPARTMENT SHALL SUPPLEMENT THE PUBLISHED FORMS
AND INSTRUCTIONS RELATING TO NONCONFORMITY AS FOLLOWS:
1. For nonconformity as
prescribed by subsection D, paragraph 2, subdivision (
a
) of this section enacted on or
before FEBRUARY 15 of the year following the close of that taxable year, the
supplemental forms and instructions shall be published as quickly as
practicable.
2. For nonconformity as
prescribed by subsection D, paragraph 2, subdivision (
a
) of this section enacted from and
after FEBRUARY 15 of the year following the close of that taxable year, the
supplemental forms and instructions shall be published on or before January 1
of the second year following the close of that taxable year.
3. For nonconformity as
prescribed by subsection D, paragraph 2, subdivision (
b
) of this section, the
supplemental forms and instructions shall be published on or before July 15 of
the second year following the close of that taxable year.
B.
C.
Notwithstanding section 42-1123,
the department shall not pay interest on refunds resulting from an amended
return related to nonconformity unless the refund is paid more than sixty days
after the due date set forth in subsection A, paragraph 4 of this section or
filing date, whichever is later.
C.
D.
For
the purposes of this section:
1. "Conformity" means an amendment to
section 43-105 that results in adoption of the definition of the internal
revenue code for the taxable year.
2. "Nonconformity" means either:
(a) Conformity plus another amendment to this title
that does not conform to specific provisions of the internal revenue code as
defined in section 43-105 for the taxable year.
(b) No amendment to section 43-105 for the
taxable year.
END_STATUTE
Sec. 2. Title 43, chapter 3, article 2, Arizona
Revised Statutes, is amended by adding section 43-329, to read:
START_STATUTE
43-329.
Returns; form and instruction preparation; conformity assumption;
definitions
A. Pursuant to section
43-102, for the purposes of prescribing the forms and instructions
required for a taxpayer to file a return pursuant to this title, the department
shall assume that the legislature will enact an amendment to section 43-105
that results in conformity to the provisions of the internal revenue code
, but only to the
extent those provisions
affect federal adjusted gross income
or federal taxable
income AND IMPLEMENT SECTION 43-1042
. �If the legislature enacts
nonconformity, the department shall supplement the published forms and
instructions related to the nonconformity
pursuant to section 43-107
.
B. For the purposes of
this section, "conformity" and "nonconformity" have the
same meanings prescribed in section 43-107.
END_STATUTE
Sec. 3.
Legislative intent
It is the intent of the legislature to
establish a consistent conformity cycle that:
1. Provides taxpayers and
tax professionals with timely and reliable tax forms and instructions.
2. Allows the legislature
sufficient opportunity to review and determine whether federal tax law changes
should be adopted for Arizona income tax purposes.
3. Reduces administrative
burdens on the department of revenue.
4. Minimizes midyear
revisions to income tax forms, filing requirements, software programming and
taxpayer guidance.
5. Preserves the
legislature's authority to adopt, reject or modify federal income tax law
changes while providing certainty regarding the taxable year to which such
changes apply.