revenue; FY2026

HB 2972 requires Arizona counties, cities, towns, councils of governments, and regional transportation authorities to pay annual fees from 2022 through 2028 to fund the Department of Revenue's tax system modernization project. Fees are calculated based on prior revenue distributions, capped at $6.5 million for fiscal year 2025-2026, and collected through direct payments or withheld from state funds if unpaid. The collected fees and transfers from existing tax revenues create a dedicated "integrated tax system project fund" administered by the department. This fund covers actual costs for modernizing tax collection systems related to specific state taxes, such as those under sections 42-5010.01 and 42-5155.