SB 1579
Initials VP/ES Page 1 Ways & Means
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-fifth Legislature
Second Regular Session
Senate: FIN DPA 9-1-0-0 | 3rd Read 28-0-2-0
SB 1579: tax corrections act of 2022
Sponsor: Senator Livingston, LD 22
Committee on Ways & Means
Overview
Corrects errors and obsolete language, addresses blending problems and provides clarifying
changes to the tax statutes.
History
The Department of Revenue (DOR) annually reviews the statutes related to taxation and makes
recommendations to correct errors, remove obsolete language and address clarity. These
recommendations are then compiled into an annual tax corrections bill.
Provisions
ADOR
1. Includes a taxpayer's Arizona small business tax return in the tax information the DOR may
disclose to a designee upon the taxpayer's written authorization. (Sec. 2)
2. Allows confidential information to be shared with the department of agriculture for the purpose
of confirming compliance with licensing provisions within statute. (Sec. 2)
Tax Credits
3. Repeals the following income tax credits:
a) Credit for Employment by a Healthy Forest Enterprise (individual income tax);
b) Credit for Pollution Control Equipment (individual income tax); and
c) Credit for Construction Costs of Qualified Environmental Technology Facility. (Sec. 14)
4. Removes the repealed income tax credits from the income tax credit review schedule. (Sec.
18)
Income Tax
5. Establishes that an individual who elects to file an Arizona small business income tax return
may not include the correctly made additions or subtractions on the small business income
tax return on their personal income tax return as well. (Sec. 12)
6. Establishes that for the purpose of determining a taxpayers adjusted gross income for the
Family Income Tax Credit, the amount subtracted from a taxpayer's Arizona small business
gross income is added back to the taxpayer's Arizona gross income. (Sec. 13)
7. Changes the date when DOR must adjust the dollar amounts for each rate bracket for the tax
imposed on estates and trusts retroactively from January 1, 2021, to January 1, 2022. (Sec.
20)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note SB 1579
Initials VP/ES Page 2 Ways & Means
Entity Level Income Tax
8. Specifies that the taxable income for an S corporation that has elected to pay entity-level
income tax is comprised of the total of all distributive income passed through to shareholders.
(Sec. 9)
9. States that entity-level income tax election is applicable to partners or shareholders who are
individuals, estates or trusts that waive their right to opt out of the election. (Sec. 9)
10. Creates a credit for entity-level income tax, allowed against corporate income tax for a
taxpayer who is in a partnership or shareholder of an S corporation who elects to pay the
entity-level income tax. (Sec. 21)
11. Establishes that the amount of the credit for entity-level income tax is the portion of the tax
paid by the partnership or S corporation that is attributable to the partner's or shareholder's
share of Arizona taxable income. (Sec. 21)
12. Requires that the estate or trust and it's noncorporate beneficiaries must distribute the credit
for entity-level income tax in the same proportion as their respective shares of the federal
distributable net income of the estate or trust from the partnership or S corporation. (Sec. 21)
13. Prohibits the amount of the claim not used to offset income taxes from being carried forward
for more that five consecutive taxable years. (Sec. 21)
Miscellaneous
14. Specifies that an electronic transmission or distribution system or an energy storage system
shall be centrally valued by DOR. (Sec. 6)
15. States that prize winnings paid by a fantasy sport contest operator and an event wagering
operator are subject to federal withholding and are to be treated as payments of wages from
an employer to an employee for a payroll period. (Sec. 8)
16. Prohibits partners in a partnership that is not a corporation from claiming a share of the Credit
for Pollution Control Equipment. (Sec. 19)
17. States that the repeal of a tax credit does not affect the validity or value of the repealed credit
that is carried forward from previous taxable years for application against tax liabilities in
subsequent taxable years. (Sec. 24)
18. Contains a retroactivity clause. (Sec. 23)
19. Contains technical and conforming changes. (Sec. 1, 2, 3, 4, 5, 6, 7, 10, 11, 14, 15, 16, 17,
18, 19)