SB 1858 outlines how specific state tax revenues collected in Arizona will be distributed for the 2026-2027 fiscal year. The bill directs these funds to various education-related accounts, including basic state aid for schools, technology and research grants for universities, workforce development programs for community colleges, and support for tribal-operated colleges. Additionally, it allocates money for school safety initiatives, failing school tutoring, and reimbursement for income tax credits. The legislation also establishes fees for local governments to help cover the costs of modernizing the state's integrated tax system.
HB 4037 creates a new refundable education tax credit for Arizona taxpayers with qualifying children. The credit (up to 80% of the state's base support level) applies to children not enrolled in public school or scholarship programs for more than 50% of instructional days. Taxpayers can claim this credit starting tax year 2026, with excess credit paid as a refund. The bill also modifies income tax filing procedures to streamline forms for eligible taxpayers and requires electronic filing for tax preparers handling over 10 returns annually.
SB 1800 establishes a new 2.6% income tax rate on earnings exceeding $1 million for high-income earners in Arizona, effective for taxable years beginning after December 31, 2026. Revenue from this tax is deposited into a dedicated K-12 infrastructure fund, specifically for repairing and renewing public school buildings, including systems like HVAC, plumbing, and electrical. The bill requires these funds to supplement - never replace - existing school construction budgets. Its goal is to ensure all public schools have safe, functional facilities meeting state learning standards, with the tax rate adjusted every five years based on median income tax data.
HB 4095 establishes the Classroom Site Fund to provide additional resources for Arizona public schools, using existing state transfers (not an additional tax). It requires school districts and charter schools to use these funds for specific purposes like class size reduction, teacher compensation (with a performance component), and student support services. School districts must adopt a performance-based teacher compensation system that includes metrics such as academic progress, attendance, and graduation rates, and obtain approval from at least 70% of eligible teachers. Annual reporting on fund usage and program outcomes is also mandated for all recipients.
HB 4029 requires Arizona's governor and legislature to annually evaluate whether aligning state income tax laws with federal tax code changes would impact state revenue by $100 million or more. If so, the governor must notify legislative leaders by September 30 on whether a special session is needed to adjust state law. The bill also creates two new simplified tax forms for eligible individual taxpayers (e.g., those using optional tax tables or claiming basic deductions) and mandates electronic filing for tax preparers handling over 10 annual returns, with limited exemptions for those lacking computer or internet access. These changes directly affect Arizona taxpayers, preparers, and the state budget process.
HB 2987 creates a new state income tax credit for owners rehabilitating certified historic structures in Arizona. It establishes a $30 million annual tax credit limit (increasing to $60 million after 2035) for projects meeting federal rehabilitation standards, requiring a cost-benefit analysis proving positive economic impact. The state historic preservation officer certifies projects based on a point system evaluating job growth, economic impact, and community support, with 60% of funds reserved for projects in cities/towns under 150,000 residents. Property owners must grant a restrictive covenant to preserve the structure for 24 months after certification, and larger projects require certified public accountant verification.
HB 4135 creates a new child care tax credit for Arizona taxpayers with children under five who use certified child care providers. The credit provides $2,000 per child for families with federal adjusted gross income of $75,000 or less, and $1,000 for incomes between $75,000 and $150,000 annually. A total of $15 million in credits is available each year on a first-come, first-served basis, with excess credits paid as refunds. The credit applies to tax returns filed for 2026 and later, supporting working families seeking quality early childhood care.
HB 2629 amends Arizona's corporate income tax law to increase the minimum tax for corporations with 50 or more employees from $50 to $1,000. Smaller corporations (fewer than 50 employees) remain subject to the $50 minimum tax. The bill also updates the tax rate schedule for corporate income (e.g., lowering rates from 6.968% to 4.9% over time), but the primary change is the higher minimum tax for larger businesses. This amendment applies to taxable years beginning after December 31, 2026.
HB 2935 amends Arizona's tax code to increase the maximum deduction for adoption-related expenses. It raises the annual deduction limit from $3,000 (for single filers or separate married couples) to $5,000 for single individuals or heads of household, and to $10,000 for married couples filing jointly, effective for tax years beginning after December 31, 2025. This change directly affects Arizona taxpayers who claim adoption costs (including medical, legal, and agency fees) in the year their adoption is finalized. The bill modifies Section 43-1022 of Arizona Revised Statutes, specifically updating paragraph 12 of the tax subtractions list.
HB 2636 proposes to increase Arizona's individual income tax rates for taxable years beginning after December 31, 2021. The bill would amend tax brackets to raise rates across all income levels for both residents and nonresidents earning income within Arizona. Key provisions include adjusting the percentage rates applied to different income ranges, such as increasing the top marginal rate for single filers and married couples filing jointly. This legislation directly affects all Arizona taxpayers subject to individual income tax, with changes applying to future tax years. The bill is currently in early legislative stages (House First/Second Reading in 2026).
