SB 1346 Summary

• Repeals existing Arizona individual income tax provisions in title 43, chapter 10, articles 1, 2, and 3, and section 43-1043.

• Establishes a flat tax of 4 percent on taxable income above $10,000 for single persons and married persons filing separately, and above $20,000 for married couples filing jointly and heads of household.

• Defines taxable income as federal gross income with limited adjustments, allowing taxpayers to subtract no more than two deductions (or one deduction plus business losses for sole proprietors).

• Restricts tax credits to no more than two per individual, with total deductions and credits capped at reducing tax liability by no more than 20 percent.

• Effective for taxable years beginning after December 31, 2012; directs legislative council staff to prepare conforming legislation for the 2013 session.