Tax expenditures; review; sunset
If enacted, HB 2775 aims to create a structured framework for the assessment of tax credits and expenditures, ensuring that they are regularly reviewed to evaluate their economic impact on the state. By setting a review schedule, the bill intends to provide a systematic approach to monitoring tax incentives, likely to increase transparency and accountability in how tax benefits are administered. This would also afford lawmakers clearer insights regarding the effectiveness of various tax provisions, potentially leading to a more favorable budgetary outcome.
House Bill 2775 introduces amendments to various sections of the Arizona Revised Statutes related to tax expenditures, particularly focusing on the review and potential sunsetting of income tax credits and other tax exemptions. The bill establishes the Joint Legislative Tax Expenditure Review Committee, which is tasked with evaluating existing tax credits and expenditures to determine their efficacy and impact on the state budget. The committee will be responsible for reporting its findings and recommendations on whether particular tax expenditures should be retained, amended, or repealed.
However, the bill has generated some points of contention. Critics argue that the periodic review process could create uncertainties for businesses and entities relying on these tax incentives, as they may face abrupt changes or elimination of financial benefits. Moreover, opponents may express concerns regarding the potential overreach of the legislative committee in evaluating tax credits, which could disproportionately impact certain sectors. Proponents of the bill counter that such measures are necessary for ensuring that tax policies evolve in alignment with the state's fiscal needs.