# Arizona SB 1274: tax corrections act of 2025

Arizona SB 1274, tax corrections act of 2025, is a Fifty-seventh Legislature - First Regular Session Senate bill sponsored by J.D. Mesnard (Republican); status signed, last action 2025-05-07 (Final Reading: Passed); PRIA reads it as touching household money (as of 2026-10-27).

- Canonical: https://policyrisk.com/state-bill/AZ-SB1274-57th-1st-regular
- As of: 2026-10-27
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Bill: Arizona SB 1274
- State: Arizona
- Session: Fifty-seventh Legislature - First Regular Session
- Title: tax corrections act of 2025
- Status: signed
- Chamber: Senate
- Introduced: 2025-02-03
- Last action: 2025-05-07, Final Reading: Passed
- Sponsor: J.D. Mesnard (Republican)
- Cosponsors: 0
- Subjects: agent, appeal, claim application, compensation, contractor, definitions, delayed repeal, department of revenue (dor), dor (see also: department of revenue), eligibility, employee, employment, entity-level tax election, excluded from withholding, extension of withholding, federal assessment, gambling winnings, imputed underpayment, individual income tax general welfare rebate, legislative findings, partnerships, preparation of tax returns, prohibited, report, retail classification, retroactivity, rules, s corporations, subtraction from arizona gross income, tax corrections act of 2025, taxation, taxation - title 42, taxation of income - title 43
- Touches household money: yes
- Roll calls: 3 (21 yes, 0 no in all)
- Economic provisions PRIA read: 13

## Summary

No summary available.

## Bill overview: provisions PRIA read

- Lower vehicle tax for some visitors: benefit, low. A nonresident buying a vehicle in Arizona can pay less Arizona transaction tax when their home state allows a matching use-tax exemption and has a lower tax rate or no excise tax. The buyer must get the special 90-day nonresident vehicle registration permit.
- Seasonal farmworkers can choose withholding: benefit, low. Seasonal farmworkers whose duties are only planting, cultivating, harvesting, or field packing crops can choose Arizona tax withholding. Employers must withhold tax when a worker makes this choice. It changes when workers pay, not how much tax they owe.
- Less audit filing for health nonprofits: benefit, low. Qualifying health nonprofits no longer need to file their annual independent audit with Arizona’s tax department to meet the sales tax exemption definition. They must still be recognized as nonprofits under federal law and use, save, or invest at least 80% of annual receipts for health or medical e…
- Lottery ticket tax treatment clarified: benefit, low. Arizona’s retail tax exclusion covers lottery tickets or shares issued under the specified state lottery law. The change clarifies which lottery products receive this tax treatment.
- Lower taxes on qualifying business purchases: benefit, low. Arizona reduces transaction tax on qualifying business sales and purchases, including property for manufacturing, mining, farming, transportation, research, and certain technology facilities. Heavy truck and trailer sales exclude amounts tied to the federal excise tax; certain other direct federal-…
- Pass-through firms can elect entity tax: benefit, low. For taxable years beginning after December 31, 2021, eligible partnerships and S corporations make Arizona’s entity-level tax election by filing their Arizona return. The election covers income tied to resident owners and Arizona-source income tied to nonresident owners.
- Tax rules for telecom and energy firms: benefit, low. Arizona excludes certain retailer pay tied to wireless equipment transfers from the transaction tax base. Gas used for specified pipeline or liquefied natural gas equipment is not treated as a sale. Coal sent for refining is also not a sale when title or possession returns to the power plant owner…
- Higher withholding on gambling prizes: cost, low. Arizona lottery, racing, fantasy sports, and event wagering operators must withhold state tax from prizes subject to federal withholding. The amount is based on Arizona’s highest individual tax rate, replacing the former amount tied to 20% of federal withholding.
- No interest on family tax rebates: cost, low. Arizona families tax rebates do not earn interest. This rule applies retroactively to rebates issued from after October 29, 2023. The law does not state an interest rate or rebate amount.
- Tax on prepaid calling cards: cost, low. Retailers must apply Arizona’s transaction tax to prepaid calling cards and related authorization numbers, including reauthorization sales. The tax may raise the price buyers pay. The law does not state the rate.
- Revenue staff face tax-preparation limits: cost, low. Arizona Department of Revenue employees, agents, contractors, and their managers or supervisors cannot prepare or help prepare tax returns for pay. The rule covers returns required by federal, state, or local governments. Violations are grounds for immediate dismissal or removal from department dut…
- Buyers may owe satellite tax penalties: cost, low. Arizona’s tax department can ask a purchaser to prove that a seller met the rules for a satellite television or data transmission equipment deduction. If the purchaser cannot prove this, the purchaser owes the tax, penalty, and interest the seller would have owed. Paying clears related tax liabilit…
- Partnerships must report federal tax changes: cost, low. When a partnership amends its federal return under section 6227, it must file an Arizona return showing related changes. Any required payment or partner statements are due within 90 days after the IRS makes its final decision.

## Sponsors and cosponsors

- Sponsor: J.D. Mesnard (Republican), Senate

## Roll call votes

| Date | Chamber | Motion | Result | Yes | No | Other |
| --- | --- | --- | --- | --- | --- | --- |
| 2025-03-17 | Senate | C&P | pass | 8 | 0 |   |
| 2025-03-12 | Senate | DP | pass | 7 | 0 |   |
| 2025-02-03 | Senate | DP | pass | 6 | 0 |   |

## Actions (10)

- 2025-05-07: Final Reading: Passed (Senate)
- 2025-04-17: Conference Committee: No Action (Senate)
- 2025-03-25: Third Reading: Passed (Senate)
- 2025-03-24: Committee of the Whole: do pass amended (Senate)
- 2025-03-17: undefined: C&P (Senate)
- 2025-03-12: undefined: DP (Senate)
- 2025-02-27: Third Reading: Passed (Senate)
- 2025-02-10: undefined: PFC (Senate)
- 2025-02-03: undefined: DP (Senate)
- undated: Conference Committee: No Action (Senate)

## Bill text

- Chaptered Version: [HTML](https://www.azleg.gov/legtext/57leg/1R/laws/0182.htm), [PDF](https://apps.azleg.gov/BillStatus/GetDocumentPdf/530418)
- Conference Engrossed Version: [HTML](https://www.azleg.gov/legtext/57leg/1R/bills/SB1274c.htm), [PDF](https://apps.azleg.gov/BillStatus/GetDocumentPdf/529793)
- House Engrossed Version: [HTML](https://www.azleg.gov/legtext/57leg/1R/bills/SB1274H.htm), [PDF](https://apps.azleg.gov/BillStatus/GetDocumentPdf/528227)
- Introduced Version: [HTML](https://www.azleg.gov/legtext/57leg/1R/bills/SB1274P.htm), [PDF](https://apps.azleg.gov/BillStatus/GetDocumentPdf/521789)
- Senate Engrossed Version: [HTML](https://www.azleg.gov/legtext/57leg/1R/bills/SB1274S.htm), [PDF](https://apps.azleg.gov/BillStatus/GetDocumentPdf/524510)

## Related bills

- SB 1281: adjutant general; duties (signed)
- HB 2015: EORP; CORP; funded ratio (signed)
- HB 2077: ASRS; long-term disability (signed)
- HB 2034: ASRS; supplemental employee deferral plan (signed)
- HB 2036: ASRS; temporary personnel service (signed)
- HB 2035: ASRS; termination incentive programs (signed)

## Sources
- [Chaptered Version (HTML)](https://www.azleg.gov/legtext/57leg/1R/laws/0182.htm)
- [Chaptered Version (PDF)](https://apps.azleg.gov/BillStatus/GetDocumentPdf/530418)
- [Conference Engrossed Version (HTML)](https://www.azleg.gov/legtext/57leg/1R/bills/SB1274c.htm)
- [Conference Engrossed Version (PDF)](https://apps.azleg.gov/BillStatus/GetDocumentPdf/529793)
- [House Engrossed Version (HTML)](https://www.azleg.gov/legtext/57leg/1R/bills/SB1274H.htm)
- [House Engrossed Version (PDF)](https://apps.azleg.gov/BillStatus/GetDocumentPdf/528227)
- [Introduced Version (HTML)](https://www.azleg.gov/legtext/57leg/1R/bills/SB1274P.htm)
- [Introduced Version (PDF)](https://apps.azleg.gov/BillStatus/GetDocumentPdf/521789)
- [Senate Engrossed Version (HTML)](https://www.azleg.gov/legtext/57leg/1R/bills/SB1274S.htm)
- [Senate Engrossed Version (PDF)](https://apps.azleg.gov/BillStatus/GetDocumentPdf/524510)

## Related
- [SB 1281: adjutant general; duties](https://policyrisk.com/state-bill/AZ-SB1281-57th-1st-regular)
- [HB 2015: EORP; CORP; funded ratio](https://policyrisk.com/state-bill/AZ-HB2015-57th-1st-regular)
- [HB 2077: ASRS; long-term disability](https://policyrisk.com/state-bill/AZ-HB2077-57th-1st-regular)
- [HB 2034: ASRS; supplemental employee deferral plan](https://policyrisk.com/state-bill/AZ-HB2034-57th-1st-regular)
- [HB 2036: ASRS; temporary personnel service](https://policyrisk.com/state-bill/AZ-HB2036-57th-1st-regular)
- [HB 2035: ASRS; termination incentive programs](https://policyrisk.com/state-bill/AZ-HB2035-57th-1st-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-SB1274-57th-1st-regular (as of 2026-10-27).