Assigned to FIN FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
FACT SHEET FOR S.B. 1049
nonresident real estate sales; notice
Purpose
Adds and modifies reporting requirements for the Arizona Department of Revenue
(ADOR) relating to capital gains tax paid on and revenue collected from nonresident real estate
sales in Arizona.
Background
Statute requires a licensed escrow agent to file an information return with ADOR using the
same form and format of the return filed with the Internal Revenue Service (IRS) by March 31 on
sales closed in the preceding calendar year. An information return must be prepared by every
person doing business as a broker to report the sale of real estate. The return must list the name
and address of each customer and contain details regarding gross proceeds. By June 30 of each
year, ADOR must estimate and report to the Joint Legislative Budget Committee (JLBC) and the
Governor's Office of Strategic Planning and Budgeting (OSPB) on the amount of revenue collected
from the sale of real estate by nonresidents that is attributed to the information return in the prior
tax year (A.R.S. § 43-312; I.R.C. § 6045(e)).
In 2019, the Legislature required ADOR to report to JLBC and OSPB by June 30, 2020,
on the estimated amount of capital gains tax paid by nonresidents on real estate transactions for
the year prior to TY 2019 based on available data from the IRS (A.R.S. § 43-312).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires ADOR, by June 30 annually, to notify JLBC and OSPB when the amount of revenue
collected from the sale of real estate by nonresidents in Arizona for the prior fiscal year reaches
$3,000,000.
2. Requires ADOR, by June 30, 2027, to report to JLBC and OSPB on the estimated amount of
capital gains tax paid by nonresidents on real estate transactions in Arizona from the most
recent year before TY 2026 based on available data from the IRS.
3. Adds the President of the Senate and Speaker of the House of Representatives as recipients of
ADOR's report on the amount of revenue collected from the sale of real estate by nonresidents
that is attributed to the information return in the prior tax year.
4. Makes technical and conforming changes.
5. Becomes effective on the general effective date.
Prepared by Senate Research
January 23, 2025
MG/AL/ci