Price tag for a $50 tax cut: $10.9 million
State approves small increase to personal exemption
PHOENIX — Come next April, look to pay the state a little bit less in taxes, or get a little bit more back in refunds.
Gov. Doug Ducey on Wednesday signed legislation which immediately boosts by $50 the amount of money that Arizonans can subtract from their earnings before computing their taxes. That will show up on the 2017 tax forms made available early next year.
Another $50 will be added to the “personal exemption” the following year. And after that, the amount will be adjusted annually to match inflation.
Arizona has five tax brackets, ranging from 2.59 percent for adjusted income for individuals up to $20,000 to 4.54 percent for those earning more than $150,000.
The state uses an individual’s federal adjusted gross income as a starting point. But state law allows a series of subtractions from that figure.
That list, for example, includes donations to college savings plans and military pay. And then there’s that personal exemption at $2,100, a figure that has not been adjusted in decades.
In his State of the State speech, Gov. Doug Ducey called for that exemption to be indexed to inflation.
The version he signed Wednesday, however, includes that $100 boost over two years. That language was inserted to buy votes from some Republican lawmakers for the budget, including the provision allowing universities to borrow up to $1 billion for capital needs.
Legislative budget analysts figure the change during the coming two years will reduce state revenues by $10.9 million.
What individual taxpayers will see, however, is quite a bit smaller.
For someone in that 2.59 percent tax bracket, a $100 decrease in taxable income computes out to just $2.59. And even for taxpayers at the top of the scale, the break is just $4.54.
Other legislation signed by Ducey on Wednesday includes:
Requiring state agencies to determine whether they need as many vehicles as they have, with the goal of an overall 10 percent reduction in the size of the state fleet;
Allowing private companies to lease space on the grounds of the Arizona State Hospital where they could operate their own emergency and long-term psychiatric services, even using empty hospital wards as necessary;
Restricting the ability of Pima County to acquire land inside of an incorporated city without that community’s permission, legislation that stems from a developer’s decision to provide land within Marana to the county to mitigate for the environmental impacts of its planned subdivision in an unincorporated area.
Click Below to: