SB 1430, the "Tax Corrections Act of 2026," amends Arizona's retail tax code to clarify and correct exemptions from the sales tax. It adds 25 specific exemptions, including sales of medical equipment (like prosthetics, hearing aids, and durable medical devices), prescription drugs, food, textbooks, and nonprofit sales. This directly affects businesses selling these items by ensuring they are exempt from the tax, resolving prior ambiguities in the code. The bill is a technical correction to the tax code, not a change in tax rates or policy.
This bill proposes amending Arizona's constitution to establish separate permanent funds for money derived from specific land grants, ensuring these funds are managed independently and invested according to strict rules. It mandates that funds be invested in safe securities (with limits on stock holdings), sets annual distribution rates (2.5% or 6.9% based on fiscal years), and requires any excess funds above 2.5% to support basic state aid for education. If fund values decline significantly, the legislature can temporarily reduce distributions to protect the principal, with reductions not affecting future calculations. The bill directly affects Arizona's state budgeting for education and land-related revenue, ensuring long-term fund stability while directing surplus funds to public education funding.
HB 2950 establishes a framework for Arizona municipalities and counties to create "tourism improvement areas" (TIAs) to fund tourism promotion. It requires a petition signed by lodging business owners representing at least 67% of rooms in the proposed area, including specific boundaries, assessment rates (based on property size or room count), and a detailed plan for how funds will be used. Lodging businesses within a TIA must pay an assessment on room rentals, which can be a fixed fee per night or a percentage of sales, with funds strictly limited to advertising, promotion, and business recruitment directly benefiting lodging businesses. The bill prohibits using these funds for physical infrastructure and sets a 30-day deadline to legally challenge the assessment. This directly affects hotels and resorts in designated areas by requiring them to pay a new, locally determined fee.
SB 1633 amends Arizona's tax code to update the deduction for adoption-related expenses under Section 43-1022. It sets new annual limits: $3,000 for single filers or married couples filing separately before 2026, increasing to $5,000 for single filers/head of household and $10,000 for married couples filing jointly starting in 2026. This deduction directly affects Arizona taxpayers who incurred adoption costs (including medical, legal, and agency fees) in prior years, allowing them to subtract these expenses when filing taxes. The bill does not address primary residence deductions, as the title suggests; instead, it modifies existing adoption expense rules with updated dollar limits. The bill is currently in early legislative stages (Senate First and Second Readings in 2026).
HB 2892 allocates $665,500 from Arizona's state general fund for fiscal year 2026-2027 to the Department of Transportation. The funds are specifically designated for Apache County to enhance and stabilize rural school bus routes through soil stabilization work. This bill directly affects Apache County's rural school transportation infrastructure by funding projects to prevent road damage from soil erosion. It is a straightforward funding measure with no policy changes beyond the allocation, as the bill was recently introduced (first/second readings in January 2026).
HB 2120 amends Arizona's property tax law to expand exemptions for specific groups: widows/widowers, people with total permanent disabilities, and veterans with disabilities. It provides full tax exemption for veterans with 100% service-connected disability (and surviving spouses using the home as primary residence), and a partial exemption of $4,188 for others based on their disability rating percentage. To qualify, applicants must meet income limits ($34,901-$41,870 depending on children) and file annual affidavits with county assessors. The exemption amounts and income thresholds will adjust annually based on GDP and housing index changes. This directly affects eligible Arizona residents seeking relief on their primary residence property taxes.
SB 1101 establishes a pilot program providing paid summer internships and professional development for STEM and vocational teachers in specific Arizona high school districts. Eligible districts must serve grades 9-12 with at least 25,000 students (75% qualifying for free/reduced lunch, 80% Hispanic), operate 24+ sites in high-population counties, and offer bioscience/coding programs. Participating schools must partner with nonprofits to provide teachers with $6,000 summer stipends, industry internships, and professional development over three years. The program requires districts to submit quarterly and annual reports tracking teacher retention, student performance in STEM courses, business partnerships, and budget usage.
HB 2888 creates the Tribal Drinking Water Access and Infrastructure Fund in Arizona, allocating $10 million from the water conservation grant fund for fiscal year 2026-2027. The fund provides grants directly to federally recognized Indian tribes and their designated authorities to improve water access and infrastructure. These grants can be used for emergency water access projects (like planning and construction) or developing permanent infrastructure (such as wells, treatment facilities, and pipelines). The appropriation is exempt from standard budget lapse rules, ensuring the funds remain available for tribal water projects.
HB 2644 creates a new tax credit for Arizona taxpayers investing in affordable housing projects that qualify for federal low-income housing tax credits. It allows investors to claim credits against their insurance premium tax liability (not income tax), with a $10 million annual cap for projects meeting federal standards, administered by the Arizona Department of Housing. The credit is allocated based on project eligibility statements, can be shared among investors regardless of ownership stake, and expires after 2031. Taxpayers must submit documentation with their tax returns, and unused credits may be carried forward for up to five years. The bill requires annual reporting on housing impacts but does not change income tax rates or directly affect renters.
Arizona's HB 2804 creates a new tax credit to support rural affordable housing development. It allows taxpayers (primarily developers or investors in qualifying projects) to claim a credit against their state insurance premium tax for projects in counties with under 800,000 residents that also qualify for federal low-income housing tax credits. The credit amount matches the state's allocation for each project, capped at $2 million annually through 2036, and requires an eligibility statement from the Arizona Department of Housing. Taxpayers can offset the credit against premium tax liability, carry forward unused portions for up to five years, and the program includes annual reporting requirements for the department.
