HB2153 - Internal revenue code; conformity; deductions.

House Engrossed internal revenue code; conformity; deductions. State of Arizona House of Representatives Fifty-seventh Legislature Second Regular Session 2026 HOUSE BILL 2153 AN ACT amending sections 42-1001, 43-105, 43-301, 43-323 and 43-1022, arizona revised statutes; amending title 43, chapter 10, article 3, Arizona Revised Statutes, by adding section 43-1030; amending sections 43-1041, 43-1042 and 43-1073.01, Arizona Revised Statutes; amending title 43, Arizona Revised Statutes, by adding chapter 18; relating to taxation. (TEXT OF BILL BEGINS ON NEXT PAGE) Be it enacted by the Legislature of the State of Arizona: Section 1. Section 42-1001, Arizona Revised Statutes, is amended to read: START_STATUTE 42-1001. Definitions In this title, unless the context otherwise requires: 1. "Board" or "state board" means either the state board of tax appeals or the state board of equalization, as applicable. 2. "Court" means the tax court or superior court, whichever is applicable. 3. "Department" means the department of revenue. 4. "Director" means the director of the department. 5. "Electronically send" or "send electronically" means to send by either email or the use of an electronic portal. 6. "Electronic portal" means a secure location on a website established by the department that requires the receiver to enter a password to access. 7. "Email" means: (a) An electronic transmission of a message to an email address. (b) If the message contains confidential information, the electronic transmission of a message to an email address using encryption software that requires the receiver to enter a password before the message can be retrieved and viewed. 8. "Internal revenue code" means the United States internal revenue code of 1986, as amended and in effect as of January 1, 2025 2026 , including those provisions that became effective during 2024 2025 with the specific adoption of their retroactive effective dates but excluding all changes to the code enacted after January 1, 2025 2026 . END_STATUTE Sec. 2. Section 43-105, Arizona Revised Statutes, is amended to read: START_STATUTE 43-105. Internal revenue code; definition; application A. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2025, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2026, including those provisions that became effective during 2025 with the specific adoption of all retroactive effective dates, but excluding any changes to the code enacted after January 1, 2026. A. B. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2024 through December 31, 2025 , "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2025, including those provisions that became effective during 2024 with the specific adoption of all retroactive effective dates, but excluding any changes to the code enacted after January 1, 2025 and including those provisions that are retroactively effective during taxable years beginning from and after December 31, 2024 through December 31, 2025 . B. C. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2023 through December 31, 2024, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2024, including those provisions that became effective during 2023 with the specific adoption of all retroactive effective dates, and including those provisions that are retroactively effective during taxable years beginning from and after December 31, 2023 through December 31, 2024. C. D. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2022 through December 31, 2023, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2023, including those provisions that became effective during 2022 with the specific adoption of all retroactive effective dates, and including those provisions that are retroactively effective during taxable years beginning from and after December 31, 2022 through December 31, 2023. D. E. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2021 through December 31, 2022, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2022, including those provisions that became effective during 2021 with the specific adoption of all retroactive effective dates, and including those provisions of the chips and science act of 2022 (P.L. 117-167), the inflation reduction act of 2022 (P.L. 117-169) and the consolidated appropriations act, 2023 (P.L. 117-328) that are retroactively effective during taxable years beginning from and after December 31, 2021 through December 31, 2022. E. F. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2020 through December 31, 2021, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on March 11, 2021, including those provisions that became effective during 2020 with the specific adoption of all retroactive effective dates and including those provisions of the PPP extension act of 2021 (P.L. 117-6) and the infrastructure investment and jobs act (P.L. 117-58) that are retroactively effective during taxable years beginning from and after December 31, 2020 through December 31, 2021. F. G. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2019 through December 31, 2020, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2020, including those provisions that became effective during 2019 with the specific adoption of all retroactive effective dates, and including those provisions of the families first coronavirus response act (P.L. 116-127), the coronavirus aid, relief, and economic security act (P.L. 116-136), the paycheck protection program flexibility act of 2020 (P.L. 116-142), the consolidated appropriations act, 2021 (P.L. 116-260) and the American rescue plan act of 2021 (P.L. 117-2) that are retroactively effective during taxable years beginning from and after December 31, 2019 through December 31, 2020. G. H. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2018 through December 31, 2019, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2019, including those provisions that became effective during 2018 with the specific adoption of all retroactive effective dates, and including those provisions of the taxpayer first act (P.L. 116-25), the further consolidated appropriations act, 2020 (P.L. 116-94), the coronavirus aid, relief, and economic security act (P.L. 116-136) and the consolidated appropriations act, 2021 (P.L. 116-260) that are retroactively effective during taxable years beginning from and after December 31, 2018 through December 31, 2019. H. I. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2017 through December 31, 2018, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2018, including those provisions that became effective during 2017 with the specific adoption of all retroactive effective dates, and including those provisions of the bipartisan budget act of 2018 (P.L. 115-123), the consolidated appropriations act, 2018 (P.L. 115-141), the further consolidated appropriations act, 2020 (P.L. 116-94), the coronavirus aid, relief, and economic security act (P.L. 116-136) and the consolidated appropriations act, 2021 (P.L. 116-260) that are retroactively effective during taxable years beginning from and after December 31, 2017 through December 31, 2018. I. J. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2016 through December 31, 2017, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2017, including those provisions that became effective during 2016 with the specific adoption of all federal retroactive effective dates, and including those provisions of the disaster tax relief and airport and airway extension act of 2017 (P.L. 115-63), the tax cuts and jobs act (P.L. 115-97), the bipartisan budget act of 2018 (P.L. 115-123), the consolidated appropriations act, 2018 (P.L. 115-141), the further consolidated appropriations act, 2020 (P.L. 116-94) and the coronavirus aid, relief, and economic security act (P.L. 116-136) that are retroactively effective during taxable years beginning from and after December 31, 2016 through December 31, 2017. J. K. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2015 through December 31, 2016, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2016, including those provisions that became effective during 2015 with the specific adoption of all federal retroactive effective dates, and including those provisions of the United States appreciation for olympians and paralympians act of 2016 (P.L. 114-239), the tax cuts and jobs act (P.L. 115-97), the consolidated appropriations act, 2018 (P.L. 115-141), the further consolidated appropriations act, 2020 (P.L. 116-94) and the coronavirus aid, relief, and economic security act (P.L. 116-136) that are retroactively effective during taxable years beginning from and after December 31, 2015 through December 31, 2016. K. For the purposes of computing income tax pursuant to this title, for taxable years beginning from and after December 31, 2014 through December 31, 2015, "internal revenue code" means the United States internal revenue code of 1986, as amended, in effect on January 1, 2015, including those provisions that became effective during 2014 with the specific adoption of all federal retroactive effective dates, and including those provisions of the slain officer family support act of 2015 (P.L. 114-7), the don't tax our fallen public safety heroes act (P.L. 114-14), the surface transportation and veterans health care choice improvement act of 2015 (P.L. 114-41), the consolidated appropriations act, 2016 (P.L. 114-113), the consolidated appropriations act, 2018 (P.L. 115-141) and the coronavirus aid, relief, and economic security act (P.L. 116-136) that are retroactively effective during taxable years beginning from and after December 31, 2014 through December 31, 2015. END_STATUTE Sec. 3. Section 43-301, Arizona Revised Statutes, is amended to read: START_STATUTE 43-301. Individual returns; definition A. A full-year or part-year resident individual shall file a return with the department if, for the taxable year, the individual's gross income was greater than the amount of the standard deduction allowed under subsection section 43-1041, subsection A as adjusted for inflation pursuant to section 43-1041, subsection H . B. A nonresident individual shall file a return with the department if, for the taxable year, the individual's gross income was greater than the amount under subsection A of this section determined for a full-year or part-year resident individual multiplied by the percentage that the individual's Arizona gross income is of the individual's federal adjusted gross income. C. In the case of a husband and wife, the spouse who controls the disposition of or who receives or spends community income as well as the spouse who is taxable on such income is liable for the payment of taxes imposed by this title on such income. If a joint return is filed, the liability for the tax on the aggregate income is joint and several. D. This section applies regardless of whether an individual is required to file a return under the internal revenue code or whether the individual has any federal adjusted gross income for the taxable year. E. For the purposes of this section, "gross income" means gross income as defined in the internal revenue code minus income included in gross income but excluded from taxation under this title. END_STATUTE Sec. 4. Section 43-323, Arizona Revised Statutes, is amended to read: START_STATUTE 43-323. Place and form of filing returns A. All returns required by this title shall be in such a form as the department may from time to time prescribe and shall be filed with the department. B. The department shall prescribe a short form return for individual taxpayers who: 1. Are eligible and elect to pay tax based on the optional tax tables pursuant to section 43-1012. 2. Elect to claim the optional standard deduction pursuant to section 43-1041, subsection A, but not the increased amount for charitable deductions under section 43-1041, subsection I H . 3. Elect not to file for credits against income tax liability other than those contained in sections 43-1072, 43-1072.01, 43-1072.02, 43-1073 and 43-1073.01. 4. Are not required to add any income under section 43-1021 and do not elect any subtractions under section 43-1022, except for the exemptions allowed under section 43-1023. C. The department may provide a simplified return form for individual taxpayers who: 1. Are eligible and elect to pay tax based on the optional tax tables pursuant to section 43-1012. 2. Are residents for the full taxable year. 3. File as single individuals or married couples filing joint returns under section 43-309. 4. Are not sixty-five years of age or older or blind at the end of the taxable year. 5. Claim no exemptions under section 43-1023 for the taxable year. 6. Elect to claim the optional standard deduction under section 43-1041, subsection A, but not the increased amount for charitable deductions under section 43-1041, subsection I H . 7. Are not required to add any income under section 43-1021 and do not elect to claim any subtractions under section 43-1022 or file for any credits under chapter 10, article 5 of this title, except the credits provided by sections 43-1072.01, 43-1072.02 and 43-1073. 8. Do not elect to contribute a portion of any tax refund as provided by any provision of chapter 6, article 1 of this title. Notwithstanding any provision of chapter 6, article 1 [Text truncated for display. Full text available on LegiScan.]