AZ HB2354

Amends Arizona income tax code by renumbering and modifying capital gains subtraction provisions, reducing the percentage of net long-term capital gains eligible for subtraction from 25% to remove prior language related to qualified small business investments.

Eliminates the subtraction for net capital gains derived from investment in qualified small businesses as determined by the Arizona Commerce Authority, effective for taxable years beginning after December 31, 2013.

Updates cross-references throughout sections 43-1022 and 43-1024 to reflect the removal of the qualified small business capital gains subtraction by renumbering subsequent paragraphs.

Maintains existing subtraction provisions for long-term capital gains from assets acquired after December 31, 2011 at rates of 10-25% depending on the tax year.

Requires passage by at least two-thirds vote of both houses of the legislature and takes effect immediately upon the governor's signature or upon a three-fourths vote of both houses if vetoed.