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Bill

SB 1106

internal revenue code; conformity; deductions

57th Legislature - Second Regular Session Introduced by J.D. Mesnard and 1 co-sponsor

Arizona bill aligns state tax deductions with federal Internal Revenue Code to simplify compliance while potentially surrendering state revenue control to federal tax policy changes.

Vetoed by Governor
0
WeVote Research Nonpartisan
Bill Summary · SB 1106

Legislative bill overview

SB 1106 proposes to align Arizona's tax code with federal Internal Revenue Code provisions regarding allowable deductions. The bill aims to create conformity between state and federal tax treatment of deductions, which could simplify tax filing for Arizona residents and businesses.

Why is this important

Tax code conformity reduces complexity for taxpayers who must navigate both state and federal systems, potentially lowering compliance costs. However, conformity decisions directly affect state revenue collections, as federal deduction changes may increase or decrease Arizona's tax base without explicit state legislative deliberation on those specific policies.

Potential points of contention

  • Revenue impact uncertainty: Without knowing which specific IRC provisions are targeted, the fiscal effect on Arizona's budget remains unclear—conformity could increase or decrease state revenue depending on which deductions are involved
  • Loss of state tax policy independence: Automatic conformity ties Arizona's tax policy to federal changes made by Congress, potentially shifting tax burdens without Arizona lawmakers' direct input on each change
  • Timing of federal changes: The bill's implementation mechanism for tracking federal IRC updates needs clarification—whether Arizona automatically adopts all future federal changes or specific ones chosen by the legislature

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

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