Budget & Taxes (Business Taxes)

SB 1745 limits transaction privilege taxes (like local sales taxes on specific services) in Arizona cities and towns with over 550,000 residents to a maximum of 2.5% per tax category. It requires voter approval for any tax increase above this cap, with elections held on even-year consolidated dates. Existing voter-approved taxes remain exempt from the cap, but cities violating the law face state revenue withholding until corrected. The bill directly affects large municipalities' ability to raise local tax rates without public consent.

HB 2939 creates a state income tax credit for businesses expanding or locating qualified facilities in Arizona. It directly affects businesses that make new capital investments, create qualifying jobs paying at least 125% of the median wage (100% in rural areas), and provide 65% employer-paid health insurance. The credit equals 10% of qualifying investments, capped at $200,000-$300,000 per new job, with a $125 million annual cap and $30 million per business limit. Businesses must retain operations at the facility for five years and claim credits in five equal installments over time.

HB 2288 adds a new tax deduction for Arizona corporations receiving dividends from foreign companies. Specifically, it allows corporations to subtract foreign dividend income from their Arizona taxable income, including certain types of foreign earnings like global intangible low-taxed income and "subpart F" income under federal tax rules. This change directly affects Arizona-based corporations that earn income from foreign subsidiaries or investments. The deduction lowers their state taxable income, potentially reducing their Arizona tax liability, but applies only to corporations (not individuals).

SB 1033 amends Arizona's tax code to add new exemptions from local transaction privilege taxes (TPT). It exempts specific services including internet access providers (defined as enabling users to access the internet), nonprofit events tied to major sports teams (with restrictions), machinery maintenance contracts, and leasing between affiliated businesses. The bill directly affects businesses providing these services by removing local TPT liability on qualifying transactions. It does not address residential property exemptions, as suggested in the title, and focuses solely on expanding existing tax exemption categories for commercial activities. The changes are purely procedural within Arizona's tax framework, with no new funding or regulatory impacts.