HB 2909
Initials VP Page 1 House Engrossed
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
Second Regular Session
House: APPROP 9-7-1-0-0
HB 2909: taxation; 2024 - 2025
Sponsor: Representative Livingston, LD 28
House Engrossed
Overview
Contains provisions relating to taxation needed to implement the FY 2025 budget.
History
The Arizona Legislature adopts a budget for each fiscal year (FY) that contains general
appropriations. Article IV, Section 20, Part 2 of the Constitution of Arizona requires the
General Appropriations Act (feed bill) to contain only appropriations for the different state
departments, state institutions, public schools and interest on public debt. Statutory changes
necessary to reconcile the appropriations made in the feed bill and other changes are drafted
into separate budget bills. These bills are prepared according to subject area.
Provisions
Department of Revenue
1. Changes the implementation date of Laws 2024, Chapter 142 (HB2382), from January 1,
2026 to January 1, 2028, which required the Department of Revenue to establish a
process by which a third-party provider that offers sourcing services to taxpayers for
transactions involving tangible personal property to become certified. (Sec. 1)
2. Extends the transaction privilege and use tax exemption for qualifying equipment
purchased by businesses certified as healthy forest enterprises from June 30, 2024 to
December 31, 2026. (Sec. 2, 3)
3. Caps the aggregate dollar level of the Corporate Low Income Student Tuition Tax Credit
at $135 million annually, beginning in FY25. (Sec. 4)
4. Expands the eligibility for scholarships from the "Switcher" Individual Income Tax Credit
and Corporate Low-Income Student Tuition Tax Credit programs to include foster care
children that meet certain requirements and that if a court rules these provisions
unenforceable these provisions would not become effective. (Sec. 5, 6)
5. Requires, as session law, county supervisors to reduce property tax levies in FY25 in
elementary districts without a high school that are non-state districts and that were
required to levy the minimum qualifying tax rate (MQTR) in FY24 and beginning in
FY25, Type 03 county levies will be deducted from the MQTR on an ongoing basis
pursuant to Laws 2024, Chapter 134 (HB2173). (Sec. 7)
6. Stipulates, as session law, legislative intent that the amount to be charged to all counties,
cities, towns, Council of Governments and regional transportation authorities with a
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note HB 2909
Initials VP Page 2 House Engrossed
population greater than 800,000 for the Integrated Tax System Project shall not exceed
$6,626,900 for FY25 and provides the mechanism to apportion the amount. (Sec 10)
7. Stipulates, as session law, legislative intent that the amounts charged to 16% recreational
marijuana excise tax and the 0.6% education sales tax for the Integrated Tax System
Project shall not exceed $179,000 and $803,600, respectively in FY25. (Sec. 10)
Qasimyar v. Maricopa County Tax Litigation
8. Stipulates, as session law, that taxing jurisdictions, including school districts, that are
liable for tax refunds in the Qasimyar v. Maricopa County litigation and that estimate
the judgement would result in a property tax increase of 4% or more may issue tax
anticipation notes that mature four years following the issuance of the notes or request
that the state loan commissioners issue bonds to redeem or refund the tax anticipation
notes and repeals this provision December 31, 2030. (Sec. 8)
9. Authorizes, as session law, the AZ Department of Education (ADE) to re-calculate basic
state aid for districts liable for Qasimyar v. Maricopa County tax refunds without the
adoption of a resolution by a school district governing board and requires ADE to submit
proposed re-calculations to JLBC for review. (Sec. 9)
10. Requires, as session law, school districts to reduce their levies to cover property tax
refunds ordered in the Qasimyar v. Maricopa County litigation to account for estimated
revenues from basic state aid re-calculations authorized by A.R.S. 15-915.B. Requires
ADE to estimate the A.R.S. 15-915.B recalculations by district by August 1, 2024 and
provide its estimate to the Property Tax Oversight Commission, JLBC and OSPB. (Sec.
9)
11. Authorizes, as session law, school districts liable for Qasimyar v. Maricopa County tax
refunds to use any unbudgeted cash balances from FY23 from their Maintenance and
Operations Fund or Unrestricted Capital Fund that were not included in the school
district's adopted FY24 budget to cover the cost of the refunds. (Sec. 9)
12. Clarifies, as session law, that any limitations on school district tax levies for Qasimyar v.
Maricopa County tax refunds shall not be construed to prevent school districts from
levying sufficient property taxes to pay required debt service on general obligation bonds.
(Sec. 9)
13. Requires, as session law, the Maricopa County Treasurer to include a statement on the
TY24 property tax bills stating, "Your tax rate includes an increase to cover the cost of
tax refunds ordered in class action litigation." (Sec. 9)
14. Contains an emergency clause. (Sec. 11)