Bill > SB1318

This bill establishes a new mechanism for managing Arizona's state tax revenues and implementing potential income tax rate reductions. Starting in fiscal year 2025-2026, the Joint Legislative Budget Committee (JLBC) will annually calculate a "growth limit" for state general fund revenues, which is based on the previous year's revenues adjusted for inflation and population growth. If ongoing state revenues exceed this growth limit, the JLBC will determine the "structural surplus" - the difference between ongoing revenues and expenditures. The bill then mandates that 50% of this structural surplus will be returned to taxpayers through a reduction in the individual income tax rate. Specifically, the state's Department of Revenue will be required to lower the income tax rate for each tax year beginning after December 31, 2025, with the reduction amount directly tied to the calculated "Arizona taxpayer return." This approach creates an automatic mechanism for potential tax relief that is linked to the state's economic growth and revenue performance, providing a potentially dynamic and responsive tax rate adjustment process.

Budget and Finance

https://apps.azleg.gov/BillStatus/BillOverview/82701