HB 2597 Summary

• Establishes sunset requirements for tax policy: all new transaction privilege and use tax deductions/exemptions must include a repeal date of December 31 in the seventh full calendar year following enactment, and all new income tax credits must include both a review year (fifth year after enactment) and repeal date (seventh year after enactment).

• Adds sunset dates to numerous existing tax credits and deductions, making most expire on December 31, 2017 or 2018 (depending on the credit), affecting credits related to defense contractors, military reuse zones, research activities, environmental technology, pollution control, solar energy, charitable giving, and school donations.

• Modifies two versions of the research activity credit (sections 43-1074.01 and 43-1168) to extend their sunset dates to December 31, 2026 and 2027 respectively, with reduced credit percentages.

• Removes specific exemptions from the retail sales tax and use tax for taxable periods beginning after December 31, 2017, affecting numerous categories of tangible personal property currently exempt under sections 42-5061 and 42-5159.

• Requires a two-thirds affirmative vote in both houses of the legislature for enactment pursuant to the Arizona Constitution.