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SB 1844

2026-2027; revenue

57th Legislature - Second Regular Session Introduced by Dave Farnsworth and 1 co-sponsor

Arizona counties, cities, towns, councils of governments, and large regional authorities fund the DOR’s integrated tax system upgrade via annual fees with caps and withholding of s

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Bill Summary · SB 1844

Summary of SB 1844 (2026-2027; revenue) – Arizona

What the bill aims to do

SB 1844 amends Section 42-5041 to continue and modify the assessment of fees from counties, cities, towns, councils of governments, and regional transportation authorities to fund an integrated tax system modernization project at the Arizona Department of Revenue (DOR). The bill also outlines legislative intent for fiscal year 2026-2027 on how these fees should be allocated across jurisdictions, and sets specific transfer and funding limits for that year.

Key provisions and changes

  • Fee assessment window extended: The bill preserves the fee mechanism from 2022 onward, extending through June 30, 2028 (currently proposed as 2029 in the text). These fees fund the DOR’s integrated tax system modernization project.

  • Who pays the fees (Section 42-5041, subsections A–B):

    • Counties, cities, towns that receive state shared revenues.
    • Councils of governments that receive certain state revenues.
    • Regional transportation authorities in counties with population over 800,000 that receive specific transportation funds.

  • Timing and collection (Subsection C):

    • Fees are assessed by October 31 each year and payable immediately.
    • Delinquent payments trigger withholding from state distributions to the affected entities (county/city/town distributions under several sections; councils of governments under sections 42-6105 and 42-6105.01; regional transportation authorities under 42-6106).

  • Funding flexibility (Subsections D–F):

    • Fees may be funded from any designated revenue by counties, cities, or towns.
    • The department must transfer funds from existing revenue streams (42-5010.01, 42-5155; and 42-5452) to cover actual reasonable costs of the modernization upgrades.

  • Administrative fund (Subsection G–H):

    • All monies paid or withheld go into the DOR Integrated Tax System Project Fund, administered by DOR, and available by legislative appropriation.
    • The fund is used solely for administrative, development, and operating costs of the modernization project.

  • Legislative intent and annual caps (Section 2):

    • For FY 2026-2027, cap the total annual fees across all affected entities at $6,286,300.
    • Allocation guidelines (subparagraphs a–g) specify how each category’s share should be determined, based on prior-year distributions to counties, cities, towns, councils of governments, and regional transportation authorities in large counties (pop. > 800,000), using specific statute references and census-based population data.
    • Additional explicit caps for transfers:
    • Not to exceed $762,300 (Subsection E transfer).
    • Not to exceed $169,800 (Subsection F transfer).
    • Provisions tie future-year distributions to amounts from prior fiscal years to determine shares.

Who/what is affected

  • Affected entities: Arizona counties, cities, towns, councils of governments, and regional transportation authorities located in large-population counties.
  • State functions: Arizona Department of Revenue (administration of the integrated tax system modernization fund and project).

Procedural/timeline notes

  • Fees assessed by October 31 annually; due immediately.
  • Delinquent amounts may be withheld from distribution of state shared revenues and other designated funds until fully satisfied.
  • The funding mechanism, including transfers from existing state revenue sources, provides the financial backbone for the DOR’s modernization project.
  • Explicit fiscal year 2026-2027 caps and apportionment rules apply, with linkage to prior-year distributions and census-based population data for apportionment.

Practical impact

  • Streamlines and finances the DOR’s integrated tax system modernization through a dedicated fund funded by annual fees from local governments and regional authorities.
  • Establishes strict annual caps and proportional allocation to prevent overassessment and to reflect historically shared revenue distributions.
  • Uses withholding of state distributions as a collection tool to ensure timely payment.

Compiled from official sources — confirm details with the bill’s official record.

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