ARIZONA STATE SENATE
Phoenix, Arizona
board of chiropractic
examiners
(NOW: corporate income tax rate)
Purpose
Gradually decreases the
corporate income tax rate to 5.04 percent by tax year 2005.
Background
Every corporation doing
business in Arizona is required to file a corporate income tax return. According to the Department of Revenue 2000
Annual Report, approximately 52,000 corporations filed returns during FY 1999-2000
with payments of $637.7 million. The
corporate tax rate for that period was a flat rate of eight percent on taxable
income. The current rate for tax year
2001 is a flat rate of 6.968 percent.
There is a $50 minimum tax liability imposed on all corporate
returns.
While states vary on how
they arrive at corporate taxable liability, listed below is a comparison of the
corporate tax rate of other western states:
|
State |
Corporate Tax Rate |
|
California |
Flat rate of 10.84% ($800 minimum) |
|
Colorado |
Flat rate of 4.63% |
|
Idaho |
Flat rate of 8.0% ($20 minimum) |
|
New Mexico |
4.8% - 7.6% |
|
Oregon |
Flat rate of 6.6% ($10 minimum) |
|
Utah |
Flat rate of 5.0% ($100 minimum) |
This measure gradually
reduces the corporate tax rate from the current 6.968 percent to 5.04 percent
over a period of five years.
According to a Joint
Legislative Budget Committee (JLBC) fiscal note, the fiscal impact for FY
2002-2003 and FY 2003-2004 will be an annual reduction in tax revenues of $19.1
million and $60.5 million, respectively.
Additionally, JLBC estimates that when the bill is fully implemented in
FY 2006, the total tax revenue reduction will be $177.8 million.
Provisions
1. Decreases the corporate income tax rate from 6.968 percent to 5.04 percent over a period of five years. See the following table:
Tax Year |
Applicable Tax Rate % |
|
2001 |
6.968 |
|
2002 |
6.500 |
|
2003 |
6.000 |
|
2004 |
5.500 |
|
2005 |
5.040 |
2. Provides for a general effective date.
House Action
HEA 2/8/01 W/D
CED 2/26/01 DPA/SE 8-1-1-0
APPROP 3/6/01 W/D
3rd Read 3/13/01 35-23-2-0
Prepared by Senate Staff
March 20, 2001