Income tax; credits; subtractions
The bill is expected to simplify the income tax framework in Arizona by amending existing statutes and introducing new regulations around tax credits and subtractions from gross income. Specifically, it seeks to enhance the clarity of the financial relationships and obligations of taxpayers toward the state. By disallowing the sale or transfer of tax credits and prohibiting refunds for new credits, HB2115 aims to streamline the process while potentially increasing state revenue through stricter compliance and regulation.
House Bill 2115 proposes significant amendments to Title 43 of the Arizona Revised Statutes, particularly focusing on income tax regulations. The bill introduces provisions regarding tax credits, explicitly prohibiting taxpayers from selling or transferring them. Additionally, it establishes that any income tax credit enacted after December 31, 2023, will not be refundable. This marks a significant shift in how tax credits are handled within the state, aiming to clarify and strengthen the regulations surrounding them.
Notable points of contention surrounding HB2115 relate to the implications of the non-refundable stance on new tax credits. Critics may argue that this could disproportionately impact lower-income taxpayers who rely on refunds to manage their finances, thereby raising concerns about equity in taxation. Additionally, the prohibition of transferring credits may limit the flexibility that taxpayers, particularly businesses, had previously enjoyed, potentially stifling economic activity in certain sectors.