# Arizona HB 4168: taxation; omnibus; 2026-2027

Arizona HB 4168, taxation; omnibus; 2026-2027, is a Fifty-seventh Legislature - Second Regular Session House bill sponsored by no sponsor on record; status signed, last action 2026-06-13 (Signed by Governor); PRIA reads it as touching household money (as of 2026-11-04).

- Canonical: https://policyrisk.com/state-bill/AZ-HB4168-57th-2nd-regular
- As of: 2026-11-04
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Bill: Arizona HB 4168
- State: Arizona
- Session: Fifty-seventh Legislature - Second Regular Session
- Title: taxation; omnibus; 2026-2027
- Status: signed
- Chamber: House
- Introduced: 2026-06-09
- Last action: 2026-06-13, Signed by Governor
- Sponsors: no sponsor on record
- Cosponsors: 5
- Subjects: 2026-2027, aca (see also: arizona commerce authority), applicability, arizona commerce authority (aca), computer data center tax relief, department of revenue (dor), dor (see also: department of revenue), insurance - title 20, internal revenue code, omnibus, pinal county, public infrastructure distribution, retroactivity, saving clause, state board of tax appeals, state government - title 41, taxation, taxation - title 42, taxation of income - title 43, unemployment insurance operating fund
- Touches household money: yes
- Roll calls: 3 (46 yes, 6 no in all)
- Economic provisions PRIA read: 28

## Summary

No summary available.

## Bill overview: provisions PRIA read

- Bigger standard deduction for taxpayers: benefit, high. If you choose the Arizona standard deduction, it is $15,750 for single or married-separately filers, $23,625 for heads of household, and $31,500 for joint filers. For tax years beginning after December 31, 2025, you can also add eligible charitable gifts, up to $1,000 for single or married-separate…
- Families deduct extra care costs: benefit, high. For tax years beginning after December 31, 2025, you can subtract qualifying child or dependent care costs from Arizona income. Only costs above your federal care credit count. You cannot claim costs already excluded from Arizona income.
- Families deduct more adoption costs: benefit, high. For tax years beginning after December 31, 2025, you can subtract eligible adoption costs from Arizona income. The limit is $5,000 for single or head-of-household filers and $10,000 for joint filers. Spouses filing separately can share up to $10,000. Claim the costs in the year the final adoption o…
- Families get a larger dependent credit: benefit, high. Arizona’s credit rises from $100 to $125 for each dependent under age 17. The credit is $25 for each qualifying dependent age 17 or older. Above $200,000 in income for single, married-separately, or head-of-household filers, or $400,000 for joint filers, it falls by 5% per $1,000 or part of $1,000…
- Itemizers can deduct state taxes: benefit, high. For tax years beginning after December 31, 2025, you can deduct up to $10,000 of a qualifying federal state and local tax deduction from Arizona income. You must itemize, and the amount cannot exceed your qualifying federal deduction.
- Workers pay less tax on overtime: benefit, high. For tax years beginning after December 31, 2024, you can subtract qualifying overtime pay from Arizona income. The pay must qualify for the federal deduction and cannot already be excluded from Arizona income. The law states no separate dollar cap.
- Workers pay less tax on tips: benefit, high. For tax years beginning after December 31, 2024, you can subtract qualifying tips from Arizona income. The tips must qualify for the federal deduction and cannot already be excluded from Arizona income. The law sets no separate dollar cap.
- Veterans' disability pay excluded from income: benefit, medium. When deciding eligibility for the subsection E property tax exemption, the law excludes certain veterans’ disability payments from income. This applies to payments based on a disability rating or total disability status based on individual unemployability. It does not guarantee that a claimant qual…
- Tax break for account distributions: benefit, medium. For tax years beginning after December 31, 2025, you can subtract distributions from accounts established under the cited federal rule from Arizona income. You cannot subtract amounts already excluded from Arizona income. The law states no separate dollar limit.
- Tax break for qualified individuals: benefit, medium. For tax years beginning after December 31, 2024, you can subtract the amount deducted for a qualified individual under the cited federal rule. You cannot subtract an amount already excluded from Arizona income. The law states no separate dollar cap.
- Tax break for vehicle loan interest: benefit, medium. For tax years beginning after December 31, 2024, through December 31, 2025, you can subtract qualifying passenger vehicle loan interest from Arizona income. The amount must qualify for the federal deduction and cannot already be excluded from Arizona income.
- Lower unemployment contributions for employers: benefit, medium. In 2027, employers with an experience rating account receive a 3.15% reduction in quarterly contributions, or another adjustment set by law. No more than $8 million goes to the unemployment insurance operating fund that year. Any excess goes to the unemployment compensation fund.
- Corporations deduct more foreign income: benefit, medium. Corporations can subtract specified foreign-company income when calculating Arizona taxable income. This includes certain dividend income, related gross-up income, and subpart F income. The available summary gives no dollar limit or start date.
- Some taxpayers lose an income credit: cost, medium. The law ends the Arizona income tax credit formerly allowed under A.R.S. § 43-1074. People who qualified for it can no longer claim it. The available summary does not state the credit amount or when the repeal takes effect.
- Businesses lose some tax credit benefits: cost, medium. Businesses with fewer than 150 employees can no longer get a cash refund of excess Arizona research credit for tax years beginning after December 31, 2025. Unused research credit can still be carried forward. Businesses claiming the qualified-facility credit lose $4,000 for each covered full-time p…
- Corporations face depreciation addbacks: cost, medium. For tax years beginning after December 31, 2025, corporations must add certain federal depreciation for qualified production property to Arizona income. Arizona also applies specified depreciation, amortization, and asset-sale calculations to pollution-control equipment that received a credit befor…
- Insurers lose a premium tax credit: cost, medium. The law ends a tax credit for certain insurance-related companies. Eligible entities can still claim other credits under Arizona law. The text does not say whether this changes household insurance costs.
- School tax credit cap falls: cost, medium. The combined yearly cap for these school tuition organization tax credits drops from $135 million to $110 million in fiscal year 2026–2027 and each year after. Contributions need Department of Revenue preapproval, and credits go out first-come, first-served.
- Homeowners must file exemption transfers: cost, low. To transfer an exemption under A.R.S. § 42-11111 after moving, you must file a completed form with the assessor for your new home. You have 60 days after the new home becomes your primary residence. Missing the deadline may affect your exemption.
- Pinal County tax funds remain on hold: cost, low. Pinal County transportation tax money left after refunds must remain in escrow or with the state revenue department until lawmakers approve its use. This includes certain undistributed or unrefunded revenue and its interest. The hold applies after April 9, 2026.
- New data centers lose tax relief access: cost, low. From July 1, 2026, through June 30, 2029, the Arizona Commerce Authority cannot accept applications for new data centers seeking this tax relief. New centers cannot qualify under the program during that period.
- Property tax relief for veteran families: mixed, high. A veteran with a 100% service-connected disability rating, or total disability status based on individual unemployability, gets a full property tax exemption on their primary home. An eligible surviving spouse can get a full exemption, or an exemption up to $4,188 multiplied by the veteran’s disabi…
- Manufacturing projects face new funding rules: mixed, high. Manufacturing facilities must agree to invest at least $3 billion in counties with 800,000 or more people, or $100 million in smaller counties, to qualify for the infrastructure program. More types of wastewater facilities can qualify when needed to support manufacturing. The Department of Revenue…
- Higher manufacturing aid, smaller cost share: mixed, medium. The statewide cap for manufacturing infrastructure payments rises to $250 million through June 30, 2027, then $300 million through June 30, 2028, and $350 million after that. The program runs through September 30, 2033. For new agreements, state payments are limited to the lesser of specified state…
- Arizona adopts updated federal tax rules: mixed, medium. For tax years beginning after December 31, 2025, Arizona uses the federal tax code as amended and in effect on January 1, 2026, subject to the law’s stated exceptions. Arizona also applies certain federal changes to tax years 2022 through 2025. These updates can change state tax calculations for in…
- District grants favor tax-generating projects: mixed, low. A covered district must direct at least 80% of its yearly grants and other financial support to projects that generate transaction privilege tax revenue. The share is measured after operating expenses and debt service. The law gives no total funding amount.
- Earlier certifications keep old thresholds: mixed, low. Certifications filed before the law’s effective date remain valid under the thresholds that applied when they were filed. Updated thresholds apply to certifications filed on or after that date. The available summary does not identify the program or threshold values.
- Local governments face project rules: mixed, low. The Department of Revenue must post covered manufacturing infrastructure agreements online. A facility gets 30 days to identify specific business information for possible redaction. A city, town, or county with a qualifying agreement must provide at least 5% of the stated non-state construction fun…

## Sponsors and cosponsors

- Cosponsor: David Livingston (Republican), House
- Cosponsor: Julie Willoughby (Republican), House
- Cosponsor: Michael Carbone (Republican), House
- Cosponsor: Neal Carter (Republican), House
- Cosponsor: Steve Montenegro (Republican), House

## Roll call votes

| Date | Chamber | Motion | Result | Yes | No | Other |
| --- | --- | --- | --- | --- | --- | --- |
| 2026-06-11 | Senate | Third Reading: Passed | pass | 23 | 5 |   |
| 2026-06-10 | House | Appropriations: DP | pass | 15 | 1 | 2 |
| 2026-06-10 | House | Rules: C&P | pass | 8 | 0 |   |

## Actions (10)

- 2026-06-13: Signed by Governor (Governor)
- 2026-06-11: Senate First Reading (Senate)
- 2026-06-11: Third Reading: Passed (Senate)
- 2026-06-11: Miscellaneous Motion: Passed (Senate)
- 2026-06-11: Third Reading: Passed (House)
- 2026-06-11: Committee of the Whole: do pass (House)
- 2026-06-10: House Second Reading (House)
- 2026-06-10: Rules: C&P (House)
- 2026-06-10: Appropriations: DP (House)
- 2026-06-09: House First Reading (House)

## Bill text

- Chaptered Version: [HTML](https://www.azleg.gov/legtext/57leg/2R/laws/0140.htm), [PDF](https://apps.azleg.gov/BillStatus/GetDocumentPdf/543921)
- House Engrossed Version (06/11/2026): [HTML](https://www.azleg.gov/legtext/57leg/2R/bills/HB4168H.htm), [PDF](https://apps.azleg.gov/BillStatus/GetDocumentPdf/543721)
- Introduced Version: [HTML](https://www.azleg.gov/legtext/57leg/2R/bills/HB4168P.htm), [PDF](https://apps.azleg.gov/BillStatus/GetDocumentPdf/543544)

## Related bills

- HB 2786: TPT; exemption; textbook rental (signed)
- HB 2780: judicial foreclosure; excess proceeds sale (signed)
- HB 2477: Arizona's education savings plan; revisions (signed)
- HB 2406: department of veterans' services; study (signed)
- HB 2397: homeowners' associations; property covenants; disclosures (signed)
- HB 2104: agricultural property; classification; inspection (signed)

## Sources
- [Chaptered Version (HTML)](https://www.azleg.gov/legtext/57leg/2R/laws/0140.htm)
- [Chaptered Version (PDF)](https://apps.azleg.gov/BillStatus/GetDocumentPdf/543921)
- [House Engrossed Version (06/11/2026) (HTML)](https://www.azleg.gov/legtext/57leg/2R/bills/HB4168H.htm)
- [House Engrossed Version (06/11/2026) (PDF)](https://apps.azleg.gov/BillStatus/GetDocumentPdf/543721)
- [Introduced Version (HTML)](https://www.azleg.gov/legtext/57leg/2R/bills/HB4168P.htm)
- [Introduced Version (PDF)](https://apps.azleg.gov/BillStatus/GetDocumentPdf/543544)

## Related
- [HB 2786: TPT; exemption; textbook rental](https://policyrisk.com/state-bill/AZ-HB2786-57th-2nd-regular)
- [HB 2780: judicial foreclosure; excess proceeds sale](https://policyrisk.com/state-bill/AZ-HB2780-57th-2nd-regular)
- [HB 2477: Arizona's education savings plan; revisions](https://policyrisk.com/state-bill/AZ-HB2477-57th-2nd-regular)
- [HB 2406: department of veterans' services; study](https://policyrisk.com/state-bill/AZ-HB2406-57th-2nd-regular)
- [HB 2397: homeowners' associations; property covenants; disclosures](https://policyrisk.com/state-bill/AZ-HB2397-57th-2nd-regular)
- [HB 2104: agricultural property; classification; inspection](https://policyrisk.com/state-bill/AZ-HB2104-57th-2nd-regular)
- [Arizona bills](https://policyrisk.com/states/arizona/bills)
- [Arizona state hub](https://policyrisk.com/states/arizona)
- [All state legislation](https://policyrisk.com/state-bills)

Source: PRIA, https://policyrisk.com/state-bill/AZ-HB4168-57th-2nd-regular (as of 2026-11-04).