AZ SB1633

Allows Arizona taxpayers to subtract from their state income tax any net capital gain from selling their primary residence, effective for tax years beginning after December 31, 2026

Requires the property to have been the taxpayer's primary residence for at least five of the preceding tax years to qualify for the subtraction

Amends Arizona Revised Statutes section 43-1022, which governs subtractions from Arizona gross income

The subtraction applies to gains already included in federal adjusted gross income, providing state-level tax relief beyond existing federal exclusions