INCOME TAX-WITHHOLDING
H2074 (Chapter 48)
Tax Credit; School Tuition Organization
Provides individual tax credits up to $500 for cash contributions made to a qualifying school tuition organization, and up to $200 tax credit for fees paid to a public school for support of extra curricular activities by a taxpayer. Credits may be carried forward for five years. Department of Revenue is required to report the fiscal impact of the tax credit provided to qualifying school tuition organizations by July 1, 1999.
Effective July 21, 1997; for taxable years beginning from and after December 31, 1997.
H2179 (Chapter 232)
Restructuring Incentives; Defense Contractors
Extends period in which Department of Commerce may certify qualified contractors for incentives program for additional three years until June 30, 2001. Also allows retroactive certification of defense contractors who did not request certification but previously met requirements.
Effective July 21, 1997.
H2237 (Chapter 269)
Air Quality Omnibus
Extends the individual and corporate income tax credits for purchase or conversion of alternative fuel vehicles of the purchase of an alternative fuel delivery system for an additional three years to January 1, 2002. Expands the provision to include alternative fuel vehicles that are leased for at least three years. The amount of the credit for taxable years 1997 through 2001 is increased to $1000 per purchase, lease or conversion.
Effective July 21, 1997 for taxable year 1997.
S1038 (Chapter 194)
Group Self-Insurance; Workers' Compensation
Allows employers to establish workers' compensation pools for purposes of self-insurance in case of workers' compensation claims, and provides an exemption from Arizona income tax for such pools.
Effective July 21, 1997.
S1052 (Chapter 238)
Income Tax; Income Adjustments
Effective for taxable years beginning from and after December 31, 1996, reduces income tax liability for individuals by allowing a subtraction for expenses relating to taxable non-Arizona state/muni interest income. Allows subtraction for wages/salaries equal to federal work opportunity, empowerment zone employment, etc. received by taxpayer which are disallowed as deductions for federal purposes.
Effective July 21, 1997; provides limited relief for individual taxpayers who lost existing NOL carryovers due to the 1990 repeal of Arizona NOL provisions.
S1054 (Chapter 62) Emergency Clause
Taxation; Internal Revenue Code Conformity
IRS conformity provisions including estate tax, generation skipping tax, tax year specific (1991 through 1997) IRC applications for computation of Arizona income tax for individuals and corporations; includes provisions of IRC amended in 1996 with applicable taxable years (1991 through 1996), and for taxable years beginning from and after December 31, 1996, through December 31, 1997 (1997 taxable year), the starting point for Arizona income tax computation is the IRC in effect on January 1, 1997.
Effective April 8, 1997.
S1055 (Chapter 171) Emergency Clause
Savings Account; Postsecondary Education
Establishes a family college savings program through a public-private partnership using selected financial institutions for the purpose of paying qualified higher education expenses of a specified beneficiary. Program must be qualified by IRS prior to implementation to take advantage of federal and state tax incentives. Also allows exemption from state income tax for withdrawal for qualified educational expenses.
Effective April 24, 1997.
S1268 (Chapter 121)
Withholding Tax; Nonresident Employees
Except for non-resident athletes and entertainers, exempts from withholding tax, wages or salary paid to nonresident employee of an entity having property, payroll and sales in Arizona, or a related entity having more than 50% direct or indirect common ownership. Nonresident employee is defined as one who is physically present in Arizona less than 60 days for the purpose of performing a service that will benefit the employer, however certain activities are excluded from being counted in the 60 day period. Allows non-resident employees to request withholding.
Effective July 21, 1997.
S1298 (Chapter 282)
Limited Liability Companies; Taxation
Amends the Arizona Limited Liability Act retroactive to December 31, 1996 to allow single member domestic or foreign limited liability companies and specifies the tax treatment of LLCs as either a corporation or a partnership or disregarded as an entity as determined by IRC.
Effective July 21, 1997; with various retroactive dates therein.
S1301 (Chapter 177)
Medical Savings Accounts; Federal Conformity
Replaces Arizona MSA with federal MSA model with exceptions. Provides transition for Arizona participants to new program, and establishes trustee reporting requirements.
Effective July 21, 1997; applies retroactively to taxable years beginning from and after December 31, 1996.
S1357 (Chapter 300)
Welfare Reform; Arizona Works Program
Tax credits for individuals and corporations allowed for net increases in qualified employment of Temporary Assistance for Needy Families (TANF) recipients. Also provides a tax credit for individuals of up to $200 for contributions to qualifying charitable organization [501(c)(3)] spending at least 50% on services to TANF or low income residents.
Effective: July 21, 1997; for taxable years beginning from and after December 31, 1997.
S1399 (Chapter 218)
Energy Conservation Incentives
Provides individual and corporate income tax credits up to $75 for each separate installation of solar hot water heater plumbing stub outs and electric vehicle recharge outlets when constructing new homes. Allows builder to transfer credit to new home buyer.
Effective on July 21, 1997 for taxable years beginning from and after December 31, 1997.
S1410 (Chapter 219)
Child Support; Omnibus
Amends confidentiality provisions of ARS 42-108 to expand the tax information which may be disclosed to the Department of Economic Security (DES) to the type of information which the IRS may disclose under IRC 6103(l)(6). Provides for DES access to department records for purposes of enforcing child support to the extent allowed by ARS 42-108. Also amends the debt setoff provisions with respect to joint income tax refunds claimed for overdue child support, by requiring DES to allocate such refunds between the obligated spouse (the only portion DES is entitled to retain), and the nonobligated spouse when a claim for such allocation is made.
Effective July 21, 1997.