| 63 | | - | Be it enacted by the Legislature of the State of Arizona: Section 1. Title 15, chapter 2, article 2, Arizona Revised Statutes, is amended by adding section 15-249.17, to read: START_STATUTE15-249.17. Arizona student apprenticeship program; definitions A. The Arizona student apprenticeship program is established within the department of education to provide job training and economic opportunity to high school students in this state. The department shall develop application procedures, selection criteria and completion requirements. the Arizona student apprenticeship program is separate and apart from the United States department of labor-approved apprenticeship program. B. Any employer in this state may apply to participate in the program by submitting an application to the department. An employer that participates in the program shall do all of the following: 1. Provide each participant employee with job training. 2. Provide flexible scheduling to each participant employee so that the participant employee may attend classes. 3. Open a separate interest-bearing account on behalf of each participant employee. 4. Deposit the portion of each participant employee's wages selected by the participant employee pursuant to subsection E of this section in the account opened pursuant to paragraph 3 of this subsection. 5. Each time the employer deposits a portion of a participant employee's wages pursuant to paragraph 4 of this subsection, deposit an equivalent amount of monies in the account opened pursuant to paragraph 3 of this subsection. 6. If a participant employee successfully completes the program requirements prescribed by the department pursuant to subsection A of this section, disburse to the participant employee the entire amount of monies in the account opened pursuant to paragraph 3 of this subsection. 7. If a participant employee does not successfully complete the program requirements prescribed by the department pursuant to subsection A of this section, disburse to the participant employee from the account opened pursuant to paragraph 3 of this subsection an amount of monies that is equivalent to the sum of the monies deposited pursuant to paragraph 4 of this subsection. The employer may retain the monies deposited pursuant to paragraph 5 of this subsection and shall transmit any interest on those monies to the state treasurer for deposit in the state general fund. C. The department shall prepare a list that includes all employers that have been accepted to participate in the program and post this list on the department's website. D. A student may participate in the program if the student meets all of the following requirements: 1. Is enrolled in high school at a public school in this state. 2. Applies for the program by submitting an application in a form prescribed by the department to the public school at which the student is enrolled. 3. Submits proof with the student's application that the student is projected to complete the high school graduation requirements pursuant to section 15-701.01 by the end of grade twelve. If participation in the program will interfere with a student's ability to complete the high school graduation requirements pursuant to section 15-701.01 by the end of grade twelve, the public school shall deny the student's application. 4. Submits proof that the student has received an offer of employment from an employer on the list prepared pursuant to subsection C of this section. E. On being hired, a participant employee shall designate a percentage of at least ten percent of the participant employee's wages to be deposited in the account opened by the employer on behalf of the participant employee pursuant to subsection B, paragraph 3 of this section. F. for the first taxable year in which an employer that participates in the program employs a participant employee who successfully completes the program, the employer is allowed an income tax subtraction as prescribed by section 43-1022 or 43-1122 for each participant employee who SUCCESSFULLY completes the program. The department of education shall issue a certificate to the employer to provide to the department of revenue to verify the employer's participation in the program and any participant employees' completion of the program. G. For the purposes of this section: 1. "Department" means the department of education. 2. "Participant employee" means an employee who participates in the program. 3. "Program" means the Arizona student apprenticeship program established by this section. END_STATUTE Sec. 2. Delayed repeal Section 15-249.17, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2030. Sec. 3. Section 43-1022, Arizona Revised Statutes, is amended to read: START_STATUTE43-1022. Subtractions from Arizona gross income In computing Arizona adjusted gross income, the following amounts shall be subtracted from Arizona gross income: 1. The amount of exemptions allowed by section 43-1023. 2. Benefits, annuities and pensions in an amount totaling not more than $2,500 received from one or more of the following: (a) The United States government service retirement and disability fund, the United States foreign service retirement and disability system and any other retirement system or plan established by federal law, except retired or retainer pay of the uniformed services of the United States that qualifies for a subtraction under paragraph 26 of this section. (b) The Arizona state retirement system, the corrections officer retirement plan, the public safety personnel retirement system, the elected officials' retirement plan, an optional retirement program established by the Arizona board of regents under section 15-1628, an optional retirement program established by a community college district board under section 15-1451 or a retirement plan established for employees of a county, city or town in this state. 3. A beneficiary's share of the fiduciary adjustment to the extent that the amount determined by section 43-1333 decreases the beneficiary's Arizona gross income. 4. Interest income received on obligations of the United States, minus any interest on indebtedness, or other related expenses, and deducted in arriving at Arizona gross income, that were incurred or continued to purchase or carry such obligations. 5. The excess of a partner's share of income required to be included under section 702(a)(8) of the internal revenue code over the income required to be included under chapter 14, article 2 of this title. 6. The excess of a partner's share of partnership losses determined pursuant to chapter 14, article 2 of this title over the losses allowable under section 702(a)(8) of the internal revenue code. 7. The amount allowed by section 43-1025 for contributions during the taxable year of agricultural crops to charitable organizations. 8. The portion of any wages or salaries paid or incurred by the taxpayer for the taxable year that is equal to the amount of the federal work opportunity credit, the empowerment zone employment credit, the credit for employer paid social security taxes on employee cash tips and the Indian employment credit that the taxpayer received under sections 45A, 45B, 51(a) and 1396 of the internal revenue code. 9. The amount of exploration expenses that is determined pursuant to section 617 of the internal revenue code, that has been deferred in a taxable year ending before January 1, 1990 and for which a subtraction has not previously been made. The subtraction shall be made on a ratable basis as the units of produced ores or minerals discovered or explored as a result of this exploration are sold. 10. The amount included in federal adjusted gross income pursuant to section 86 of the internal revenue code, relating to taxation of social security and railroad retirement benefits. 11. To the extent not already excluded from Arizona gross income under the internal revenue code, compensation received for active service as a member of the reserves, the national guard or the armed forces of the United States, including compensation for service in a combat zone as determined under section 112 of the internal revenue code. 12. The amount of unreimbursed medical and hospital costs, adoption counseling, legal and agency fees and other nonrecurring costs of adoption not to exceed $3,000. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $3,000. The subtraction under this paragraph may be taken for the costs that are described in this paragraph and that are incurred in prior years, but the subtraction may be taken only in the year during which the final adoption order is granted. 13. The amount authorized by section 43-1027 for the taxable year relating to qualified wood stoves, wood fireplaces or gas fired fireplaces. 14. The amount by which a net operating loss carryover or capital loss carryover allowable pursuant to section 43-1029, subsection F exceeds the net operating loss carryover or capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code. 15. Any amount of qualified educational expenses that is distributed from a qualified state tuition program determined pursuant to section 529 of the internal revenue code and that is included in income in computing federal adjusted gross income. 16. Any item of income resulting from an installment sale that has been properly subjected to income tax in another state in a previous taxable year and that is included in Arizona gross income in the current taxable year. 17. For property placed in service: (a) In taxable years beginning before December 31, 2012, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year computed as if the election described in section 168(k) of the internal revenue code had been made for each applicable class of property in the year the property was placed in service. (b) In taxable years beginning from and after December 31, 2012 through December 31, 2013, an amount determined in the year the asset was placed in service based on the calculation in subdivision (a) of this paragraph. In the first taxable year beginning from and after December 31, 2013, the taxpayer may elect to subtract the amount necessary to make the depreciation claimed to date for the purposes of this title the same as it would have been if subdivision (c) of this paragraph had applied for the entire time the asset was in service. Subdivision (c) of this paragraph applies for the remainder of the asset's life. If the taxpayer does not make the election under this subdivision, subdivision (a) of this paragraph applies for the remainder of the asset's life. (c) In taxable years beginning from and after December 31, 2013 through December 31, 2015, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been ten percent of the amount allowed pursuant to section 168(k) of the internal revenue code. (d) In taxable years beginning from and after December 31, 2015 through December 31, 2016, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been fifty-five percent of the amount allowed pursuant to section 168(k) of the internal revenue code. (e) In taxable years beginning from and after December 31, 2016, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been the full amount allowed pursuant to section 168(k) of the internal revenue code. 18. With respect to property that is sold or otherwise disposed of during the taxable year by a taxpayer that complied with section 43-1021, paragraph 11 with respect to that property, the amount of depreciation that has been allowed pursuant to section 167(a) of the internal revenue code to the extent that the amount has not already reduced Arizona taxable income in the current or prior taxable years. 19. The amount contributed during the taxable year to college savings plans established pursuant to section 529 of the internal revenue code on behalf of the designated beneficiary to the extent that the contributions were not deducted in computing federal adjusted gross income. The amount subtracted may not exceed: (a) $2,000 per beneficiary for a single individual or a head of household. (b) $4,000 per beneficiary for a married couple filing a joint return. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $4,000 per beneficiary. 20. The portion of the net operating loss carryforward that would have been allowed as a deduction in the current year pursuant to section 172 of the internal revenue code if the election described in section 172(b)(1)(H) of the internal revenue code had not been made in the year of the loss that exceeds the actual net operating loss carryforward that was deducted in arriving at federal adjusted gross income. This subtraction only applies to taxpayers who made an election under section 172(b)(1)(H) of the internal revenue code as amended by section 1211 of the American recovery and reinvestment act of 2009 (P.L. 111-5) or as amended by section 13 of the worker, homeownership, and business assistance act of 2009 (P.L. 111-92). 21. For taxable years beginning from and after December 31, 2013, the amount of any net capital gain included in federal adjusted gross income for the taxable year derived from investment in a qualified small business as determined by the Arizona commerce authority pursuant to section 41-1518. 22. An amount of any net long-term capital gain included in federal adjusted gross income for the taxable year that is derived from an investment in an asset acquired after December 31, 2011, as follows: (a) For taxable years beginning from and after December 31, 2012 through December 31, 2013, ten percent of the net long-term capital gain included in federal adjusted gross income. (b) For taxable years beginning from and after December 31, 2013 through December 31, 2014, twenty percent of the net long-term capital gain included in federal adjusted gross income. (c) For taxable years beginning from and after December 31, 2014, twenty-five percent of the net long-term capital gain included in federal adjusted gross income. For the purposes of this paragraph, a transferee that receives an asset by gift or at the death of a transferor is considered to have acquired the asset when the asset was acquired by the transferor. If the date an asset is acquired cannot be verified, a subtraction under this paragraph is not allowed. 23. If an individual is not claiming itemized deductions pursuant to section 43-1042, the amount of premium costs for long-term care insurance, as defined in section 20-1691. 24. The amount of eligible access expenditures paid or incurred during the taxable year to comply with the requirements of the Americans with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, article 8 as provided by section 43-1024. 25. For taxable years beginning from and after December 31, 2017, the amount of any net capital gain included in Arizona gross income for the taxable year that is derived from the exchange of one kind of legal tender for another kind of legal tender. For the purposes of this paragraph: (a) "Legal tender" means a medium of exchange, including specie, that is authorized by the United States Constitution or Congress to pay debts, public charges, taxes and dues. (b) "Specie" means coins having precious metal content. 26. Benefits, annuities and pensions received as retired or retainer pay of the uniformed services of the United States in amounts as follows: (a) For taxable years through December 31, 2018, an amount totaling not more than $2,500. (b) For taxable years beginning from and after December 31, 2018 through December 31, 2020, an amount totaling not more than $3,500. (c) For taxable years beginning from and after December 31, 2020, the full amount received. 27. For taxable years beginning from and after December 31, 2020, the amount contributed during the taxable year to an achieving a better life experience account established pursuant to section 529A of the internal revenue code on behalf of the designated beneficiary to the extent that the contributions were not deducted in computing federal adjusted gross income. The amount subtracted may not exceed: (a) $2,000 per beneficiary for a single individual or a head of household. (b) $4,000 per beneficiary for a married couple filing a joint return. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $4,000 per beneficiary. 28. For taxable years beginning from and after December 31, 2020, Arizona small business adjusted gross income, but only if an individual taxpayer has elected to separately report and pay tax on the taxpayer's Arizona small business adjusted gross income on the Arizona small business income tax return. 29. For taxable years beginning from and after December 31, 2022 through December 31, 2030, the amount that the employer deposits pursuant to section 15-249.17, subsection B, paragraph 5 and disburses to participant employees pursuant to section 15-249.17, subsection B, paragraph 6 during the first taxable year that the taxpayer employs participant employees who successfully complete the student apprenticeship program established by section 15-249.17. END_STATUTE Sec. 4. Section 43-1122, Arizona Revised Statutes, is amended to read: START_STATUTE43-1122. Subtractions from Arizona gross income; corporations In computing Arizona taxable income for a corporation, the following amounts shall be subtracted from Arizona gross income: 1. The excess of a partner's share of income required to be included under section 702(a)(8) of the internal revenue code over the income required to be included under chapter 14, article 2 of this title. 2. The excess of a partner's share of partnership losses determined pursuant to chapter 14, article 2 of this title over the losses allowable under section 702(a)(8) of the internal revenue code. 3. The amount allowed by section 43-1025 for contributions during the taxable year of agricultural crops to charitable organizations. 4. The portion of any wages or salaries paid or incurred by the taxpayer for the taxable year that is equal to the amount of the federal work opportunity credit, the empowerment zone employment credit, the credit for employer paid social security taxes on employee cash tips and the Indian employment credit that the taxpayer received under sections 45A, 45B, 51(a) and 1396 of the internal revenue code. 5. With respect to property that is sold or otherwise disposed of during the taxable year by a taxpayer that complied with section 43-1121, paragraph 4 with respect to that property, the amount of depreciation that has been allowed pursuant to section 167(a) of the internal revenue code to the extent that the amount has not already reduced Arizona taxable income in the current taxable year or prior taxable years. 6. With respect to a financial institution as defined in section 6-101, expenses and interest relating to tax-exempt income disallowed pursuant to section 265 of the internal revenue code. 7. Dividends received from another corporation owned or controlled directly or indirectly by a recipient corporation. For the purposes of this paragraph, "control" means direct or indirect ownership or control of fifty percent or more of the voting stock of the payor corporation by the recipient corporation. Dividends shall have the meaning provided in section 316 of the internal revenue code. This subtraction shall apply without regard to section 43-961, paragraph 2 and article 4 of this chapter. 8. Interest income received on obligations of the United States. 9. The amount of dividend income from foreign corporations. For the purposes of this paragraph, gross up income as described in section 78 of the internal revenue code, global intangible low-taxed income as defined in section 951A of the internal revenue code and subpart F income as defined in section 952 of the internal revenue code shall be considered foreign dividends. 10. The amount of net operating loss allowed by section 43-1123. 11. The amount of any state income tax refunds received that were included as income in computing federal taxable income. 12. The amount of expense recapture included in income pursuant to section 617 of the internal revenue code for mine exploration expenses. 13. The amount of deferred exploration expenses allowed by section 43-1127. 14. The amount of exploration expenses related to the exploration of oil, gas or geothermal resources, computed in the same manner and on the same basis as a deduction for mine exploration pursuant to section 617 of the internal revenue code. This computation is subject to the adjustments contained in section 43-1121, paragraph 10 and paragraphs 12 and 13 of this section relating to exploration expenses. 15. The amortization of pollution control devices allowed by section 43-1129. 16. The amount of amortization of the cost of child care facilities pursuant to section 43-1130. 17. The amount of income from a domestic international sales corporation required to be included in the income of its shareholders pursuant to section 995 of the internal revenue code. 18. The income of an insurance company that is exempt under section 43-1201 to the extent that it is included in computing Arizona gross income on a consolidated return pursuant to section 43-947. 19. The amount by which a capital loss carryover allowable pursuant to section 43-1130.01, subsection F exceeds the capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code. 20. An amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year computed as if the election described in section 168(k)(7) of the internal revenue code had been made for each applicable class of property in the year the property was placed in service. 21. The amount of eligible access expenditures paid or incurred during the taxable year to comply with the requirements of the Americans with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, article 8 as provided by section 43-1124. 22. For taxable years beginning from and after December 31, 2017, the amount of any net capital gain included in Arizona gross income for the taxable year that is derived from the exchange of one kind of legal tender for another kind of legal tender. For the purposes of this paragraph: (a) "Legal tender" means a medium of exchange, including specie, that is authorized by the United States Constitution or Congress to pay debts, public charges, taxes and dues. (b) "Specie" means coins having precious metal content. 23. With respect to a public service corporation operating a water system or sewage disposal facility, the amount of monies or property received as a contribution in aid of construction. For the purposes of this paragraph: (a) "Contribution in aid of construction" means any amount of monies or other property contributed to a public service corporation that provides water or sewage disposal services to the extent that the purpose of the contribution is to provide for expanding, improving or replacing the public service corporation's water system or sewage disposal facilities, including any amount of monies or other property contributed to a public service corporation for a water system or sewage disposal facility subject to a contingent obligation to repay the amount, in whole or in part, to the contributor. (b) "Public service corporation" means a public service corporation as defined in article XV, section 2, Constitution of Arizona, that is regulated by the corporation commission. 24. For taxable years beginning from and after December 31, 2022 through December 31, 2030, the amount that the employer deposits pursuant to section 15-249.17, subsection B, paragraph 5 and disburses to participant employees pursuant to section 15-249.17, subsection B, paragraph 6 during the first taxable year that the taxpayer employs participant employees who successfully complete the student apprenticeship program established by section 15-249.17. END_STATUTE |
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| 63 | + | Be it enacted by the Legislature of the State of Arizona: Section 1. Title 15, chapter 2, article 2, Arizona Revised Statutes, is amended by adding section 15-249.17, to read: START_STATUTE15-249.17. Arizona student apprenticeship program; definitions A. The Arizona student apprenticeship program is established within the department of education to provide job training and economic opportunity to high school students in this state. The department shall develop application procedures, selection criteria and completion requirements. the Arizona student apprenticeship program is separate and apart from the United States department of labor-approved apprenticeship program. B. Any employer in this state may apply to participate in the program by submitting an application to the department. An employer that participates in the program shall do all of the following: 1. Provide each participant employee with job training. 2. Provide flexible scheduling to each participant employee so that the participant employee may attend classes. 3. Open a separate interest-bearing account on behalf of each participant employee. 4. Deposit the portion of each participant employee's wages selected by the participant employee pursuant to subsection E of this section in the account opened pursuant to paragraph 3 of this subsection. 5. Each time the employer deposits a portion of a participant employee's wages pursuant to paragraph 4 of this subsection, deposit an equivalent amount of monies in the account opened pursuant to paragraph 3 of this subsection. 6. If a participant employee successfully completes the program requirements prescribed by the department pursuant to subsection A of this section, disburse to the participant employee the entire amount of monies in the account opened pursuant to paragraph 3 of this subsection. 7. If a participant employee does not successfully complete the program requirements prescribed by the department pursuant to subsection A of this section, disburse to the participant employee from the account opened pursuant to paragraph 3 of this subsection an amount of monies that is equivalent to the sum of the monies deposited pursuant to paragraph 4 of this subsection. The employer may retain the monies deposited pursuant to paragraph 5 of this subsection and shall transmit any interest on those monies to the state treasurer for deposit in the state general fund. C. The department shall prepare a list that includes all employers that have been accepted to participate in the program and post this list on the department's website. D. A student may participate in the program if the student meets all of the following requirements: 1. Is enrolled in high school at a public school in this state. 2. Applies for the program by submitting an application in a form prescribed by the department to the public school at which the student is enrolled. 3. Submits proof with the student's application that the student is projected to complete the high school graduation requirements pursuant to section 15-701.01 by the end of grade twelve. If participation in the program will interfere with a student's ability to complete the high school graduation requirements pursuant to section 15-701.01 by the end of grade twelve, the public school shall deny the student's application. 4. Submits proof that the student has received an offer of employment from an employer on the list prepared pursuant to subsection C of this section. E. On being hired, a participant employee shall designate a percentage of at least ten percent of the participant employee's wages to be deposited in the account opened by the employer on behalf of the participant employee pursuant to subsection B, paragraph 3 of this section. F. for the first taxable year in which an employer that participates in the program employs a participant employee who successfully completes the program, the employer is allowed an income tax subtraction as prescribed by section 43-1022 or 43-1122 for each participant employee who SUCCESSFULLY completes the program. The department of education shall issue a certificate to the employer to provide to the department of revenue to verify the employer's participation in the program and any participant employees' completion of the program. G. For the purposes of this section: 1. "Department" means the department of education. 2. "Participant employee" means an employee who participates in the program. 3. "Program" means the Arizona student apprenticeship program established by this section. END_STATUTE Sec. 2. Section 43-1022, Arizona Revised Statutes, is amended to read: START_STATUTE43-1022. Subtractions from Arizona gross income In computing Arizona adjusted gross income, the following amounts shall be subtracted from Arizona gross income: 1. The amount of exemptions allowed by section 43-1023. 2. Benefits, annuities and pensions in an amount totaling not more than $2,500 received from one or more of the following: (a) The United States government service retirement and disability fund, the United States foreign service retirement and disability system and any other retirement system or plan established by federal law, except retired or retainer pay of the uniformed services of the United States that qualifies for a subtraction under paragraph 26 of this section. (b) The Arizona state retirement system, the corrections officer retirement plan, the public safety personnel retirement system, the elected officials' retirement plan, an optional retirement program established by the Arizona board of regents under section 15-1628, an optional retirement program established by a community college district board under section 15-1451 or a retirement plan established for employees of a county, city or town in this state. 3. A beneficiary's share of the fiduciary adjustment to the extent that the amount determined by section 43-1333 decreases the beneficiary's Arizona gross income. 4. Interest income received on obligations of the United States, minus any interest on indebtedness, or other related expenses, and deducted in arriving at Arizona gross income, that were incurred or continued to purchase or carry such obligations. 5. The excess of a partner's share of income required to be included under section 702(a)(8) of the internal revenue code over the income required to be included under chapter 14, article 2 of this title. 6. The excess of a partner's share of partnership losses determined pursuant to chapter 14, article 2 of this title over the losses allowable under section 702(a)(8) of the internal revenue code. 7. The amount allowed by section 43-1025 for contributions during the taxable year of agricultural crops to charitable organizations. 8. The portion of any wages or salaries paid or incurred by the taxpayer for the taxable year that is equal to the amount of the federal work opportunity credit, the empowerment zone employment credit, the credit for employer paid social security taxes on employee cash tips and the Indian employment credit that the taxpayer received under sections 45A, 45B, 51(a) and 1396 of the internal revenue code. 9. The amount of exploration expenses that is determined pursuant to section 617 of the internal revenue code, that has been deferred in a taxable year ending before January 1, 1990 and for which a subtraction has not previously been made. The subtraction shall be made on a ratable basis as the units of produced ores or minerals discovered or explored as a result of this exploration are sold. 10. The amount included in federal adjusted gross income pursuant to section 86 of the internal revenue code, relating to taxation of social security and railroad retirement benefits. 11. To the extent not already excluded from Arizona gross income under the internal revenue code, compensation received for active service as a member of the reserves, the national guard or the armed forces of the United States, including compensation for service in a combat zone as determined under section 112 of the internal revenue code. 12. The amount of unreimbursed medical and hospital costs, adoption counseling, legal and agency fees and other nonrecurring costs of adoption not to exceed $3,000. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $3,000. The subtraction under this paragraph may be taken for the costs that are described in this paragraph and that are incurred in prior years, but the subtraction may be taken only in the year during which the final adoption order is granted. 13. The amount authorized by section 43-1027 for the taxable year relating to qualified wood stoves, wood fireplaces or gas fired fireplaces. 14. The amount by which a net operating loss carryover or capital loss carryover allowable pursuant to section 43-1029, subsection F exceeds the net operating loss carryover or capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code. 15. Any amount of qualified educational expenses that is distributed from a qualified state tuition program determined pursuant to section 529 of the internal revenue code and that is included in income in computing federal adjusted gross income. 16. Any item of income resulting from an installment sale that has been properly subjected to income tax in another state in a previous taxable year and that is included in Arizona gross income in the current taxable year. 17. For property placed in service: (a) In taxable years beginning before December 31, 2012, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year computed as if the election described in section 168(k) of the internal revenue code had been made for each applicable class of property in the year the property was placed in service. (b) In taxable years beginning from and after December 31, 2012 through December 31, 2013, an amount determined in the year the asset was placed in service based on the calculation in subdivision (a) of this paragraph. In the first taxable year beginning from and after December 31, 2013, the taxpayer may elect to subtract the amount necessary to make the depreciation claimed to date for the purposes of this title the same as it would have been if subdivision (c) of this paragraph had applied for the entire time the asset was in service. Subdivision (c) of this paragraph applies for the remainder of the asset's life. If the taxpayer does not make the election under this subdivision, subdivision (a) of this paragraph applies for the remainder of the asset's life. (c) In taxable years beginning from and after December 31, 2013 through December 31, 2015, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been ten percent of the amount allowed pursuant to section 168(k) of the internal revenue code. (d) In taxable years beginning from and after December 31, 2015 through December 31, 2016, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been fifty-five percent of the amount allowed pursuant to section 168(k) of the internal revenue code. (e) In taxable years beginning from and after December 31, 2016, an amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year as computed as if the additional allowance for depreciation had been the full amount allowed pursuant to section 168(k) of the internal revenue code. 18. With respect to property that is sold or otherwise disposed of during the taxable year by a taxpayer that complied with section 43-1021, paragraph 11 with respect to that property, the amount of depreciation that has been allowed pursuant to section 167(a) of the internal revenue code to the extent that the amount has not already reduced Arizona taxable income in the current or prior taxable years. 19. The amount contributed during the taxable year to college savings plans established pursuant to section 529 of the internal revenue code on behalf of the designated beneficiary to the extent that the contributions were not deducted in computing federal adjusted gross income. The amount subtracted may not exceed: (a) $2,000 per beneficiary for a single individual or a head of household. (b) $4,000 per beneficiary for a married couple filing a joint return. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $4,000 per beneficiary. 20. The portion of the net operating loss carryforward that would have been allowed as a deduction in the current year pursuant to section 172 of the internal revenue code if the election described in section 172(b)(1)(H) of the internal revenue code had not been made in the year of the loss that exceeds the actual net operating loss carryforward that was deducted in arriving at federal adjusted gross income. This subtraction only applies to taxpayers who made an election under section 172(b)(1)(H) of the internal revenue code as amended by section 1211 of the American recovery and reinvestment act of 2009 (P.L. 111-5) or as amended by section 13 of the worker, homeownership, and business assistance act of 2009 (P.L. 111-92). 21. For taxable years beginning from and after December 31, 2013, the amount of any net capital gain included in federal adjusted gross income for the taxable year derived from investment in a qualified small business as determined by the Arizona commerce authority pursuant to section 41-1518. 22. An amount of any net long-term capital gain included in federal adjusted gross income for the taxable year that is derived from an investment in an asset acquired after December 31, 2011, as follows: (a) For taxable years beginning from and after December 31, 2012 through December 31, 2013, ten percent of the net long-term capital gain included in federal adjusted gross income. (b) For taxable years beginning from and after December 31, 2013 through December 31, 2014, twenty percent of the net long-term capital gain included in federal adjusted gross income. (c) For taxable years beginning from and after December 31, 2014, twenty-five percent of the net long-term capital gain included in federal adjusted gross income. For the purposes of this paragraph, a transferee that receives an asset by gift or at the death of a transferor is considered to have acquired the asset when the asset was acquired by the transferor. If the date an asset is acquired cannot be verified, a subtraction under this paragraph is not allowed. 23. If an individual is not claiming itemized deductions pursuant to section 43-1042, the amount of premium costs for long-term care insurance, as defined in section 20-1691. 24. The amount of eligible access expenditures paid or incurred during the taxable year to comply with the requirements of the Americans with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, article 8 as provided by section 43-1024. 25. For taxable years beginning from and after December 31, 2017, the amount of any net capital gain included in Arizona gross income for the taxable year that is derived from the exchange of one kind of legal tender for another kind of legal tender. For the purposes of this paragraph: (a) "Legal tender" means a medium of exchange, including specie, that is authorized by the United States Constitution or Congress to pay debts, public charges, taxes and dues. (b) "Specie" means coins having precious metal content. 26. Benefits, annuities and pensions received as retired or retainer pay of the uniformed services of the United States in amounts as follows: (a) For taxable years through December 31, 2018, an amount totaling not more than $2,500. (b) For taxable years beginning from and after December 31, 2018 through December 31, 2020, an amount totaling not more than $3,500. (c) For taxable years beginning from and after December 31, 2020, the full amount received. 27. For taxable years beginning from and after December 31, 2020, the amount contributed during the taxable year to an achieving a better life experience account established pursuant to section 529A of the internal revenue code on behalf of the designated beneficiary to the extent that the contributions were not deducted in computing federal adjusted gross income. The amount subtracted may not exceed: (a) $2,000 per beneficiary for a single individual or a head of household. (b) $4,000 per beneficiary for a married couple filing a joint return. In the case of a husband and wife who file separate returns, the subtraction may be taken by either taxpayer or may be divided between them, but the total subtractions allowed both husband and wife may not exceed $4,000 per beneficiary. 28. For taxable years beginning from and after December 31, 2020, Arizona small business adjusted gross income, but only if an individual taxpayer has elected to separately report and pay tax on the taxpayer's Arizona small business adjusted gross income on the Arizona small business income tax return. 29. The amount that the employer deposits pursuant to section 15-249.17, subsection B, paragraph 5 and disburses to participant employees pursuant to section 15-249.17, subsection B, paragraph 6 during the first taxable year that the taxpayer employs participant employees who successfully complete the student apprenticeship program established by section 15-249.17. END_STATUTE Sec. 3. Section 43-1122, Arizona Revised Statutes, is amended to read: START_STATUTE43-1122. Subtractions from Arizona gross income; corporations In computing Arizona taxable income for a corporation, the following amounts shall be subtracted from Arizona gross income: 1. The excess of a partner's share of income required to be included under section 702(a)(8) of the internal revenue code over the income required to be included under chapter 14, article 2 of this title. 2. The excess of a partner's share of partnership losses determined pursuant to chapter 14, article 2 of this title over the losses allowable under section 702(a)(8) of the internal revenue code. 3. The amount allowed by section 43-1025 for contributions during the taxable year of agricultural crops to charitable organizations. 4. The portion of any wages or salaries paid or incurred by the taxpayer for the taxable year that is equal to the amount of the federal work opportunity credit, the empowerment zone employment credit, the credit for employer paid social security taxes on employee cash tips and the Indian employment credit that the taxpayer received under sections 45A, 45B, 51(a) and 1396 of the internal revenue code. 5. With respect to property that is sold or otherwise disposed of during the taxable year by a taxpayer that complied with section 43-1121, paragraph 4 with respect to that property, the amount of depreciation that has been allowed pursuant to section 167(a) of the internal revenue code to the extent that the amount has not already reduced Arizona taxable income in the current taxable year or prior taxable years. 6. With respect to a financial institution as defined in section 6-101, expenses and interest relating to tax-exempt income disallowed pursuant to section 265 of the internal revenue code. 7. Dividends received from another corporation owned or controlled directly or indirectly by a recipient corporation. For the purposes of this paragraph, "control" means direct or indirect ownership or control of fifty percent or more of the voting stock of the payor corporation by the recipient corporation. Dividends shall have the meaning provided in section 316 of the internal revenue code. This subtraction shall apply without regard to section 43-961, paragraph 2 and article 4 of this chapter. 8. Interest income received on obligations of the United States. 9. The amount of dividend income from foreign corporations. For the purposes of this paragraph, gross up income as described in section 78 of the internal revenue code, global intangible low-taxed income as defined in section 951A of the internal revenue code and subpart F income as defined in section 952 of the internal revenue code shall be considered foreign dividends. 10. The amount of net operating loss allowed by section 43-1123. 11. The amount of any state income tax refunds received that were included as income in computing federal taxable income. 12. The amount of expense recapture included in income pursuant to section 617 of the internal revenue code for mine exploration expenses. 13. The amount of deferred exploration expenses allowed by section 43-1127. 14. The amount of exploration expenses related to the exploration of oil, gas or geothermal resources, computed in the same manner and on the same basis as a deduction for mine exploration pursuant to section 617 of the internal revenue code. This computation is subject to the adjustments contained in section 43-1121, paragraph 10 and paragraphs 12 and 13 of this section relating to exploration expenses. 15. The amortization of pollution control devices allowed by section 43-1129. 16. The amount of amortization of the cost of child care facilities pursuant to section 43-1130. 17. The amount of income from a domestic international sales corporation required to be included in the income of its shareholders pursuant to section 995 of the internal revenue code. 18. The income of an insurance company that is exempt under section 43-1201 to the extent that it is included in computing Arizona gross income on a consolidated return pursuant to section 43-947. 19. The amount by which a capital loss carryover allowable pursuant to section 43-1130.01, subsection F exceeds the capital loss carryover allowable pursuant to section 1341(b)(5) of the internal revenue code. 20. An amount equal to the depreciation allowable pursuant to section 167(a) of the internal revenue code for the taxable year computed as if the election described in section 168(k)(7) of the internal revenue code had been made for each applicable class of property in the year the property was placed in service. 21. The amount of eligible access expenditures paid or incurred during the taxable year to comply with the requirements of the Americans with disabilities act of 1990 (P.L. 101-336) or title 41, chapter 9, article 8 as provided by section 43-1124. 22. For taxable years beginning from and after December 31, 2017, the amount of any net capital gain included in Arizona gross income for the taxable year that is derived from the exchange of one kind of legal tender for another kind of legal tender. For the purposes of this paragraph: (a) "Legal tender" means a medium of exchange, including specie, that is authorized by the United States Constitution or Congress to pay debts, public charges, taxes and dues. (b) "Specie" means coins having precious metal content. 23. With respect to a public service corporation operating a water system or sewage disposal facility, the amount of monies or property received as a contribution in aid of construction. For the purposes of this paragraph: (a) "Contribution in aid of construction" means any amount of monies or other property contributed to a public service corporation that provides water or sewage disposal services to the extent that the purpose of the contribution is to provide for expanding, improving or replacing the public service corporation's water system or sewage disposal facilities, including any amount of monies or other property contributed to a public service corporation for a water system or sewage disposal facility subject to a contingent obligation to repay the amount, in whole or in part, to the contributor. (b) "Public service corporation" means a public service corporation as defined in article XV, section 2, Constitution of Arizona, that is regulated by the corporation commission. 24. The amount that the employer deposits pursuant to section 15-249.17, subsection B, paragraph 5 and disburses to participant employees pursuant to section 15-249.17, subsection B, paragraph 6 during the first taxable year that the taxpayer employs participant employees who successfully complete the student apprenticeship program established by section 15-249.17. END_STATUTE |
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