ARIZONA STATE SENATE
RESEARCH STAFF
TO: MEMBERS OF THE SENATE
MILITARY AFFAIRS, PUBLIC SAFETY &
AND BORDER SECURITY COMMITTEE
DATE: February 13, 2023
SUBJECT: Strike everything amendment to S.B.1375, relating to uniformed services; income
subtraction
Purpose
Effective January 1, 2024, expands Arizona gross income tax subtractions to include
compensation received for active service in the U.S. Uniformed Services, rather than just the U.S.
Armed Forces.
Background
Uniformed services means the Army, Navy, Air Force, Marine Corps, Space Force, Coast
Guard, National Oceanic and Atmospheric Administration, and Public Health Service. Armed
forces means the Army, Navy, Air Force, Marine Corps, Space Force, and Coast Guard (U.S.C.
§ 37-101).
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 the Internal Revenue Code, must be subtracted from Arizona gross income when
computing Arizona adjusted gross income (A.R.S. § 43-1022).
If allowing members of the U.S. Uniformed Services, rather than just the U.S. Armed
Services, to subtract compensation received for active service from Arizona gross income leads to
fewer income tax collections, there may be an impact to the state General Fund.
Provisions
1. Expands Arizona gross income tax subtractions to include compensation received for active
service in the U.S. Uniformed Services, rather than just the U.S. Armed Forces.
2. Becomes effective on January 1, 2024.
KAYTIE SHERMAN
LEGISLATIVE RESEARCH INTERN
ZACK DEAN
LEGISLATIVE RESEARCH ANALYST
MILITARY AFFAIRS, PUBLIC SAFETY &
BORDER SECURITY COMMITTEE
Telephone: (602) 926-3171