If enacted, HB 2282 would significantly enhance the legislative body's capacity to scrutinize tax-related provisions. It introduces a structure that requires a scheduled review of both transaction privilege taxes and income tax credits every ten years, thereby ensuring that outdated or ineffective tax benefits can be reassessed and potentially eliminated. This change aims to foster a more transparent and efficient tax system while aiming to optimize the economic benefits that tax expenditures create for Arizona.
Summary
House Bill 2282 seeks to amend multiple provisions in the Arizona Revised Statutes, specifically concerning the review and recommendations of tax expenditures. It establishes a framework for the joint legislative tax expenditure review committee to evaluate existing tax provisions and determine their effectiveness. This includes assessing whether each tax expenditure should be amended, retained, or repealed based on specific standards, including revenue impact and economic benefits to the state. The committee is mandated to report its findings to legislative leaders annually, promoting accountability in fiscal policy regarding tax expenditures.
Contention
While the bill has the intent to strengthen financial accountability, it may raise concerns among certain stakeholders about the implications of tax credit reductions or eliminations on local businesses and specific sectors reliant on these incentives for growth. Critics could argue that such stringent reviews might discourage investment and limit the resources available for economic development initiatives. Balancing fiscal prudence with the need for economic stimulation is likely to be a point of debate as the bill progresses through the legislative process.