HB2128 - 451R - House Bill Summary

House of Representatives

HB 2128

family tax credit; repeal

Sponsors: Representative May

X	Committee on Ways and Means
	Caucus and COW	This bill as introduced contains *a PROP 108 clause.*
	As Passed the House	This bill as introduced contains *a PROP 108 clause.*

HB 2128 repeals the Family tax credit that was enacted in 1995 and amended in 1998.

History

In 1995 the legislature passed an individual income tax reduction. Incorporated in this bill is the establishment of a family income tax credit for low-income families that allows a family of four with an Arizona gross income of $20,000 or less to pay no state income tax. A tax credit of $30 is allowed for each person or dependent, up to a maximum of $120. This amount was later amended in 1998 to $40 for each member in the family and allowing up to six family members to qualify for the credit.

A fiscal note has been requested. According to the DOR 2000 Annual Report, 352,760 filers claimed this credit in tax year 1998 for a total of $32.7 million.

Provisions

· Repeals the current family tax credit of $40 per person. The maximum amount that is allowed is currently $240 for married filling jointly or head of household and $120 for married filling separate or filling single. The family tax credit applies to filers with the following income thresholds:

Filing Status	Income Threshold
Single or married filling separate w/ no dependents	$10,000 or less
Married filling joint w/1 dependent or Head of household w/ 1 dependent	$20,000 or less
Single head of household w/2 Dependents	$20,135 or less
Married filing jointly w/2 Dependents	$23,600 or less
Married filing Jointly w/3 Dependents	$27,300 or less
Single head of household with 5 Dependents	$26,575 or less
Married Filing Jointly w/4 Dependents	$31,000 or less
Single head of household w/3 Dependents	$23,800 or less
Single head of household w/4 Dependents	$25,200 or less

· Contains a proposition 108 clause, which requires a two-thirds vote of each house to enact.

· Provides for conforming and technical changes.

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· 44th Legislature