AZ SB1241

Establishes a 50% tax credit for purchasing and installing residential gray water treatment systems, capped at $5,000 per system, for taxable years beginning January 1, 2025 through December 31, 2035.

Applies credit to both individual income tax (section 43-1080) and corporate income tax (section 43-1169) under Arizona tax code.

Limits credits to $5,000,000 per taxpayer annually and $25,000,000 aggregate statewide per calendar year, distributed on a first-come, first-served basis.

Requires taxpayers to submit certification forms with proof of purchase, installation, and compliance with NSF/ANSI Standard 350 for residential gray water recycling systems.

Allows unused credits to carry forward for up to two consecutive taxable years if they exceed current year tax liability.