House of Representatives

SB 1128

county equalization assistance; education

Sponsors: Senator Bundgaard

 

DPA

Committee on Education

x

Committee on Ways and Means

 

 

Caucus and COW

 

 

As Passed the House

 

SB 1128 sets the county equalization assistance for education tax rate for tax year 2001 and 2002 at 49.74 cents per $100 of assessed valuation and clarifies that that tax rate is determined each year pursuant to the truth-in-taxation statutes. The proposed strike-everything amendment will increase the standard deduction for individual income tax filers.

 

History

Arizona imposes a progressive income tax rate on individuals with taxable income in this state and upon nonresidents who derive their income from sources within Arizona. In Arizona, annual individual income tax accounts for approximately one-third of all state general fund revenues.  For FY 99-00 the state revenues for individual income tax is approximately 2 billion.  The current rate structure ranges from 2.8% to 5.04%.

 

For those filers who do not itemize their deductions, Arizona provides a standard deduction as follows:

            Single/Married Filing Separate                $3,600

            Married Filing Joint/Head of Household  $7,200

 

The proposed strike everything amendment will increase the standard deduction.  The proposed increases will reduce income tax revenues by approximately $39.5 million per year for an impact of $78.1 million during the 2001-2003 biennial budget cycle.  According to DOR, this will have the effect of reducing the tax liability for those with a federal adjusted gross income (FAGI) of $10,000 or less by approximately 60.1%.  For filers with a FAGI between $10,000 and $20,000 the reduction in liability is approximately 15.9%, for filers with a FAGI between $20,000 and $25,000 the effect will result in a 12.6% reduction.  Anyone with a FAGI between $25,000 and $30,000 will have an estimated 9.2% reduction in tax liability.  Filers between $30,000 and $40,000 FAGI will see approximately a 6.1% reduction and all other filers will see either small decreases or no decreases, depending on whether they itemize or use the new standard deduction.

 

Provisions for the proposed strike-everything amendment

·                      Beginning in tax year 2001, increases the standard deduction for single and married filing separate from $3,600 to $4,750.

·                      Beginning in tax year 2001, increases the standard deduction for married filing joint and head of household from $7,200 to $9,500.

 

 

 

 

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45th Legislature                       

First Regular Session    3          April 2, 2001

 

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