HB2590 Summary

• Establishes a new services classification under transaction privilege tax (TPT) effective January 1, 2017, covering professional services, health care, administrative services, personal care, education, financial services, and other service businesses.

• Increases TPT rates across business classifications: raises the general rate to 5.7%, transient lodging to 6.3%, mining to 6%, and commercial lease to 6%, effective January 1, 2017.

• Repeals Arizona's individual and corporate income taxes (Title 43, chapters 10 and 11) effective December 31, 2016, replacing them with expanded TPT revenue.

• Creates a transaction privilege tax rate task force to recommend a revenue-neutral TPT rate by December 31, 2015, with the Joint Legislative Budget Committee approving the final rate by December 31, 2016.

• Repeals the food classification under TPT (Title 42, chapter 5, article 3) effective December 31, 2016, integrating food sales into the retail classification and establishing an urban revenue sharing fund of $424.4 million annually for cities and towns beginning fiscal year 2018-2019.