SB 1390 Summary

• Imposes an additional 0.6% transaction privilege tax (TPT) and excise tax rate from July 1, 2021 through June 30, 2041 on retail sales and use of tangible personal property.

• Distributes revenues from the new tax rate to education funding including $64.1 million annually to the classroom site fund, technology and research initiatives at universities (12%), workforce development programs at community colleges (3%), and other education accounts.

• Establishes a new income tax credit under section 43-1072.02 for low-income Arizona residents ($25,000 or less for couples/heads of household; $12,500 for single filers) to mitigate the increased tax burden from the new TPT rate.

• Allocates classroom site fund revenues with 40% for teacher performance compensation, 20% for teacher base salary increases, and 40% for maintenance and operations.

• Requires two-thirds affirmative vote in both houses of the legislature and governor's signature (or three-fourths override of veto) for enactment under Arizona Constitution article IX, section 22.