COMMITTEE ON WAYS AND MEANS
(Reference to printed bill)
Page 1, between lines 1 and 2, insert:
"Section 1. Section
43-1021, Arizona Revised Statutes, is amended to read:
43-1021. Additions to Arizona gross income
In
computing Arizona adjusted gross income, the following amounts shall be added
to Arizona gross income:
1. A
beneficiary's share of trust or estate income includible under section 43-1344.
2. A
beneficiary's share of trust or estate deductions allowable under the internal
revenue code.
3. An
amount equal to the "ordinary income portion" of a lump sum
distribution that was excluded from federal adjusted gross income pursuant to
section 402(d) of the internal revenue code.
4. The
amount of interest income received on obligations of any state, territory or
possession of the United States, or any political subdivision thereof, located
outside the state of Arizona, reduced, for tax years beginning from and after
December 31, 1996, by the amount of any interest on indebtedness and other
related expenses that were incurred or continued to purchase or carry those
obligations and that are not otherwise deducted or subtracted in arriving at
Arizona gross income.
5. Annuity
income received during the taxable year to the extent that the sum of the
proceeds received from such annuity in all taxable years prior to and including
the current taxable year exceeds the total consideration and premiums paid by
the taxpayer. This paragraph applies only to those annuities with
respect to which the first payment was received prior to December 31, 1978.
6. The
excess of a partner's share of partnership taxable income required to be
included under chapter 14, article 2 of this title over the income required to
be reported under section 702(a)(8) of the internal revenue code.
7. The
excess of a partner's share of partnership losses determined pursuant to
section 702(a)(8) of the internal revenue code over the losses allowable under
chapter 14, article 2 of this title.
8. The
amount by which the adjusted basis of property described in this paragraph and
computed pursuant to the internal revenue code exceeds the adjusted basis of
such property computed pursuant to this title and the income tax act of 1954,
as amended. This paragraph shall apply to all property which is held
for the production of income and which is sold or otherwise disposed of during
the taxable year, except depreciable property used in a trade or business.
9. The
amount of depreciation or amortization of costs of any capital investment that
is deducted pursuant to section 167 or 179 of the internal revenue code by a
qualified defense contractor with respect to which an election is made to
amortize pursuant to section 43-1024.
10. The
amount of gain from the sale or other disposition of a capital investment which
a qualified defense contractor has elected to amortize pursuant to section
43-1024.
11. The
amount of depreciation or amortization of costs of child care facilities
deducted pursuant to section 167 or 188 of the internal revenue code for which
a credit is taken under section 43-1075, subsection A, paragraph 1.
12. Amounts
withdrawn from the Arizona state retirement system, the corrections officer
retirement plan, the public safety personnel retirement system, the elected
officials' retirement plan or a county or city retirement plan by an employee
upon termination of employment before retirement to the extent they were
deducted in arriving at Arizona taxable income in any year.
13. That
portion of the net operating loss included in federal adjusted gross income
which has already been taken as a net operating loss for Arizona purposes or
which is separately taken as a subtraction under the special net operating loss
transition rule.
14. Any
nonitemized amount deducted pursuant to section 170 of the internal revenue
code representing contributions to an educational institution which denies
admission, enrollment or board and room accommodations on the basis of race,
color or ethnic background except those institutions primarily established for
the education of American Indians.
15. The
amount of depreciation or amortization of costs of recycling equipment deducted
pursuant to the internal revenue code for which an election is made pursuant to
section 43-1076.
16. The
amount paid as taxes on property in this state with respect to which a credit
is claimed under section 43-1078.
17. Amounts
withdrawn from a medical savings account by the individual during the taxable
year computed pursuant to section 220(f) of the internal revenue code and not
included in federal adjusted gross income.
18. Any
amount of agricultural water conservation expenses that were deducted pursuant
to the internal revenue code for which a credit is claimed under section
43-1084.
19. The
amount by which the depreciation or amortization computed under the internal
revenue code with respect to property for which a credit was taken under
section 43-1080 exceeds the amount of depreciation or amortization computed
pursuant to the internal revenue code on the Arizona adjusted basis of the
property.
20. The
amount by which the adjusted basis computed under the internal revenue code
with respect to property for which a credit was claimed under section 43-1080
and which is sold or otherwise disposed of during the taxable year exceeds the
adjusted basis of the property computed under section 43-1080.
21. The
amount by which the depreciation or amortization computed under the internal
revenue code with respect to property for which a credit was taken under either
section 43-1081 or 43-1081.01 exceeds the amount of depreciation or
amortization computed pursuant to the internal revenue code on the Arizona
adjusted basis of the property.
22. The
amount by which the adjusted basis computed under the internal revenue code
with respect to property for which a credit was claimed under either section
43-1081 or 43-1081.01 and which is sold or otherwise disposed of during the
taxable year exceeds the adjusted basis of the property computed under section
43-1081 or 43-1081.01, as applicable.
23. The
deduction referred to in section 1341(a)(4) of the internal revenue code for
restoration of a substantial amount held under a claim of right.
24. The
amount by which a net operating loss carryover or capital loss carryover
allowable pursuant to section 1341(b)(5) of the internal revenue code exceeds
the net operating loss carryover or capital loss carryover allowable pursuant
to section 43-1029, subsection F.
25. Any
amount deducted pursuant to section 170 of the internal revenue code
representing contributions to a school tuition organization or a public school
for which a credit is claimed under section 43-1089 or 43-1089.01.
26. Any
amount deducted in computing Arizona gross income as expenses for installing
solar stub outs or electric vehicle recharge outlets in this state with respect
to which a credit is claimed pursuant to section 43-1090.
27. Any
wage expenses deducted pursuant to the internal revenue code for which a credit
is claimed under section 43-1087 and representing net increases in qualified
employment positions for employment of temporary assistance for needy families
recipients.
28. Any
amount deducted pursuant to section 170 of the internal revenue code
representing the contribution of a motor vehicle for which a credit is claimed
pursuant to section 43-1090.01.
29. any patent costs for which a credit is
claimed under section 43-1088.01."
Renumber
to conform
Page
1, line 6, after "ALLOWED" insert "in lieu of any other deduction or credit"
Lines
9 and 12, after "COUNTY" insert "in this state"
Between
lines 18 and 19, insert:
"3. The business must continue to be operating in the qualified county during the taxable year in which the credit is claimed."
Line 19, after the third "THE" insert "Lesser of one hundred thousand dollars or the"
Line
23, after "FIVE" insert "consecutive"
Between
lines 35 and 36, insert:
"e. in this section, unless the
context otherwise requires:
1. "conducting business" means having
over fifty per cent of a business' payroll and property in a qualified county
under subsection a, paragaraph 1, subdivision (a).
2. "relocate an ongoing business" means
moving over fifty per cent of a business' payroll and property to a qualified
county from a nonqualified county as provided in subsection a,
paragraph 1, subdivision (b).
Sec. 3. Section
43-1121, Arizona Revised Statutes, is amended to read:
43-1121. Additions to Arizona gross income;
corporations
In
computing Arizona taxable income for a corporation, the following amounts shall
be added to Arizona gross income:
1. The
amounts computed pursuant to section 43-1021, paragraphs 4 through 10 and 14.
2. The
amount of dividend income received from corporations and allowed as a deduction
pursuant to sections 243, 244 and 245 of the internal revenue code.
3. Taxes
which are based on income paid to states, local governments or foreign governments
and which were deducted in computing federal taxable income.
4. Expenses
and interest relating to tax-exempt income on indebtedness incurred or
continued to purchase or carry obligations the interest on which is wholly
exempt from the tax imposed by this title. Financial institutions,
as defined in section 6-101, shall be governed by section 43-961, paragraph 2.
5. Commissions,
rentals and other amounts paid or accrued to a domestic international sales
corporation controlled by the payor corporation if the domestic international
sales corporation is not required to report its taxable income to this state
because its income is not derived from or attributable to sources within this
state. If the domestic international sales corporation is subject to
article 4 of this chapter, the department shall prescribe by rule the method of
determining the portion of the commissions, rentals and other amounts which are
paid or accrued to the controlled domestic international sales corporation and
which shall be deducted by the payor. "Control" for
purposes of this paragraph means direct or indirect ownership or control of
fifty per cent or more of the voting stock of the domestic international sales
corporation by the payor corporation.
6. Federal
income tax refunds received during the taxable year to the extent they were
deducted in arriving at Arizona taxable income in a previous year.
7. The
amount of net operating loss taken pursuant to section 172 of the internal
revenue code.
8. The
amount of exploration expenses determined pursuant to section 617 of the
internal revenue code to the extent that they exceed seventy-five thousand
dollars and to the extent that the election is made to defer those expenses not
in excess of seventy-five thousand dollars.
9. Amortization
of costs incurred to install pollution control devices and deducted pursuant to
the internal revenue code or the amount of deduction for depreciation taken
pursuant to the internal revenue code on pollution control devices for which an
election is made pursuant to section 43-1129.
10. The
amount of depreciation or amortization of costs of child care facilities
deducted pursuant to section 167 or 188 of the internal revenue code for which
an election is made to amortize pursuant to section 43-1130.
11. Arizona
state income tax refunds received, to the extent the amount of the refunds is
not already included in Arizona gross income, if a tax benefit was derived by
deduction of this amount in a prior year.
12. The
amount paid as taxes on property in this state by a qualified defense
contractor with respect to which a credit is claimed under section 43-1166.
13. The
loss of an insurance company that is exempt under section 43-1201 to the extent
that it is included in computing Arizona gross income on a consolidated return
pursuant to section 43-947.
14. The
amount by which the depreciation or amortization computed under the internal
revenue code with respect to property for which a credit was taken under
section 43-1169 exceeds the amount of depreciation or amortization computed
pursuant to the internal revenue code on the Arizona adjusted basis of the
property.
15. The
amount by which the adjusted basis computed under the internal revenue code
with respect to property for which a credit was claimed under section 43-1169
and which is sold or otherwise disposed of during the taxable year exceeds the
adjusted basis of the property computed under section 43-1169.
16. The
amount by which the depreciation or amortization computed under the internal
revenue code with respect to property for which a credit was taken under either
section 43-1170 or 43-1170.01 exceeds the amount of depreciation or
amortization computed pursuant to the internal revenue code on the Arizona
adjusted basis of the property.
17. The
amount by which the adjusted basis computed under the internal revenue code
with respect to property for which a credit was claimed under either section
43-1170 or 43-1170.01 and which is sold or otherwise disposed of during the
taxable year exceeds the adjusted basis of the property computed under section
43-1170 or 43-1170.01, as applicable.
18. The
deduction referred to in section 1341(a)(4) of the internal revenue code for
restoration of a substantial amount held under a claim of right.
19. The
amount by which a capital loss carryover allowable pursuant to section
1341(b)(5) of the internal revenue code exceeds the capital loss carryover
allowable pursuant to section 43-1130.01, subsection F.
20. Any
amount deducted in computing Arizona taxable income as expenses for installing
solar stub outs or electric vehicle recharge outlets in this state with respect
to which a credit is claimed pursuant to section 43-1176.
21. Any
wage expenses deducted pursuant to the internal revenue code for which a credit
is claimed under section 43-1175 and representing net increases in qualified
employment positions for employment of temporary assistance for needy families
recipients.
22. Any
amount of expenses that were deducted pursuant to the internal revenue code and
for which a credit is claimed under section 43-1178.
23. Any
amount deducted pursuant to section 170 of the internal revenue code
representing the contribution of a motor vehicle for which a credit is claimed
pursuant to section 43-1177.
24. any patent costs for which a credit is
claimed under section 43-1179."
Renumber
to conform
Page
1, line 40, after "ALLOWED" insert "in lieu of any other deduction or credit"
Line
43, after "COUNTY" insert "in this state"
Page 2, line 1, after "COUNTY" insert
"in this state"
Between lines 7 and 8, insert:
"3. The business must continue to be operating in the qualified county during the taxable year in which the credit is claimed."
Line 8, after the third "THE" insert "lesser of one hundred thousand dollars or the"
Between
lines 23 and 24, insert:
"e. in this section, unless the
context otherwise requires:
1. "conducting business" means having
over fifty per cent of a business' payroll and property in a qualified county
under subsection a, PARAGRAPH 1, subdivision (a).
2. "relocate an ongoing business" means
moving over fifty per cent of a business' payroll and property to a qualified
county from a nonqualified county as provided in subsection a,
paragraph 1, subdivision (b)."
Strike line 25, insert:
"This act applies retroactively to taxable years beginning from and after December 31, 1999."